At 9am at Kew Bridge in west London, tourists, runners and dog walkers are queuing at the Dear Coco vintage Italian coffee cart.
The cart serves high-grade arabica coffee brewed in an expensive La Marzocco machine, priced at £4.50 for an iced latte, £4.10 for a 10 oz latte, and £3.90 for a flat white.
A large coffee served with an alternative milk like soy or almond in central London is now closer to the £5 mark, a threshold that has become increasingly common.
Starbucks CEO Brian Niccol recently drew criticism for describing a “$9 experience” at one of his outlets as a “really affordable premium experience.”
Anthony Duckworth, who works the Kew cart, says he is resisting the pressure to push prices higher, though the squeeze is relentless across his supply chain.
“We feel super strongly about keeping the price of a flat white under £4 for as long as possible,” Duckworth says. “But it’s becoming increasingly difficult, because every part of the supply chain has become more expensive.”
“We think there’s a really important psychological threshold around that four pound mark,” he adds, as rowing boats pass on the water behind him.
Coffee, he argues, is not merely a morning ritual but a lens through which the entire modern global economy can be examined, from commodity inflation to climate change to geopolitical strife.
Near the Turin ring road in northern Italy, Giuseppe Lavazza, whose great-grandfather founded the Lavazza brand 131 years ago, speaks to the relentless pressure facing the industry.
“The secret of surviving is having a company ready to modify,” Lavazza says, holding what he hopes will be his next major product innovation, a coffee cookie called a tabli.
Two years ago, a convergence of climatic events pushed the price of both arabica and robusta beans to multi-decade highs, fundamentally reshaping the market.
Vietnam suffered its worst drought in decades in early 2024, with rainfall collapsing by 30%, followed by a typhoon during harvest that further damaged production later that year.
In Brazil, farmers are still struggling to recover from a severe frost in 2021 that caused lasting damage to the arabica crop across the country.
Arabica prices peaked above $4 per pound of green beans last year, up from approximately $1.20 historically, before settling at around $3.08.
Robusta beans reached $2.59 before settling at approximately $1.56, meaning both varieties now cost significantly more than they did before 2020.
Lavazza describes the period as an “unprecedented time in terms of complexity and troubles,” and warns that relief is unlikely to arrive quickly for consumers or producers.
“Unfortunately, we have to wait for at least a couple of years, because we need two big crops from Brazil, Vietnam, arriving on the market that could create a different market condition,” he says.
Donald Trump’s Liberation Day tariffs compounded the disruption considerably, with Vietnam facing a 46% tariff, Indonesia 32%, and Brazil 50% following an escalation from 10%.
Brazilian exports to the US more than halved last summer, while prices for beans from lower-tariffed countries such as Colombia also rose as American suppliers raced to secure alternative supply.
US roasted coffee prices surged by 17% in the year to March, while instant coffee rose a near-record 25%, making it the single fastest-rising item in the entire US inflation basket apart from fuel oil.
A bag of ground roast coffee that cost $4.30 in 2020 had already reached $6.32 by 2024, and has since climbed to $9.61, with prices heading toward $10.
Trump signed an executive order allowing coffee beans to escape his sweeping tariffs after angry American voters faced soaring supermarket prices, though the damage to markets had already been significant.
Ships transporting Vietnamese beans to Europe are now forced to loop around the southern tip of Africa to avoid Houthi militants at the Bab al-Mandab Strait, adding around 4,000 miles to each journey.
Despite everything, consumer demand has proven remarkably resilient, behaving in what economists describe as an inelastic fashion, meaning it does not respond strongly to rising prices.
“We saw that despite the high prices, people love having coffee,” Lavazza says. “We don’t see any significant decrease in terms of volumes in the most important countries.”
Premiumisation is reshaping the market, with businesses engineering fancier products and experiences to justify higher prices among younger customers willing to spend more.
Blank Street, originally founded in New York by former venture capitalists, rebranded last year, dropping the word “coffee” from its name and adopting a green hue as matcha surged in popularity among younger drinkers.
At the other end of the market, Greggs has kept prices low through automation, using bean-to-cup Swiss machines to sell a regular latte for around £2.40, making it Britain’s largest coffee provider with more outlets than Costa.
The commodity price surge matters most in supermarkets, but in cafes, businesses are increasingly selling experiences rather than drinks, which means prices are likely to remain elevated regardless of what happens to raw bean costs.