Caffeine dreams
Giuseppe Lavazza, chairman of one of the world's leading coffee roasters, expects customers to be able to get their caffeine fix cheaper in the coming months, as consumers begin to benefit from the falling price of wholesale beans. With more than 60% of Americans drinking coffee every single day, you might expect the price of coffee to be headline news.
But, even if coffee wholesale prices do tumble, your morning fix — particularly if bought from a cafe — is unlikely to change much.
A study in the UK from 2019, reveals the breakdown of the costs of a typical cup of coffee, finding that just ~4% of a your morning cup is actually for the coffee itself — which worked out to about £0.10 ($0.13). The figures would undoubtedly be higher today — a £2.50 ($3.20) cup of coffee in the UK is a rare sight these days — but the proportions would be similar. Indeed, if you have a particularly fancy drink order, with lots of sweeteners or alternative milks, then the actual beans will be an even smaller share of the costs.
That means, even if the wholesale cost of coffee were to plunge by 40-50%, the cost savings likely to be passed on to consumers would be unlikely to be more than a few cents, as the price of your daily caffeine fix is much more dependent on shop rent and staff wages.
A bitter brew
Although a few years out of date, and from just one study in the UK, the breakdown gives a good sense of just how complicated the coffee supply chain is. The coffee roaster usually accounts for most of the cost of the actual coffee, while exporters, transporters and processors take their cuts, leaving the actual grower with around just 10% of the coffee revenue. In this study, that worked to be just one penny from a typical £2.50 ($3.20) cup of coffee.
