“But first, coffee.” This simple phrase propels customers across all industries, making coffee a critical product to understand for the success of your business. However, prices remain elevated in the world of coffee. How can you ensure you’re meeting this important demand while maximizing your margins? 

Learning exactly what is impacting coffee costs can help you make informed decisions and strategically manage potential risks associated with coffee cost volatility. 

Read more: GPO coffee program 

What’s impacting coffee costs? 

The coffee industry remains volatile, and its cost outlook is influenced by a variety of complex forces. Chief among these forces are heavy tariffs on key exporters like Brazil and tight supplies due to extreme weather and poor harvests from climate change. Additionally, an overwhelming preference for Arabica in North America is continuing to keep prices elevated, even as the robusta supply expands. 

Understanding how tariffs, supply shortages and climate change are affecting the coffee industry can help you better navigate price fluctuation and make more informed decisions for your business. 

Get informed: Download the report

How to meet the rising demand for sustainability and reduce coffee costs 

Customers are no longer satisfied with a simple cup of joe — increasingly, they want to do good with every dollar, and that means they’re seeking out businesses that demonstrate a strong commitment to sustainability.* Offering products that align with consumers’ social responsibility concerns can make a dramatic impact on the public perception of your business. 

However, not all customers are ready to make the leap from value to premium prices. That’s where the E-G-B-B model comes in. Short for Economy-Good-Better-Best, this tiered model enables businesses to cater to varied customer needs and maximize revenue. This means your business can leverage the growing demand for climate-conscious options while also tailoring your offerings to different customer preferences and budgets. 

According to Chef Lynn Hay, Head of Entegra Culinary Consulting, "We start with an operational review, then recommend product matching/cutting, menu costing and menu-mix analysis, SKU rationalization, time-and-motion studies and waste reduction strategies — all targeted to each client’s pain points.” This in-depth process can help you discover how you can reach your sustainability goals while cutting costs at the same time. 

Read more: Achieve profit and sustainability goals

Managing your coffee costs through informed decision-making 

As you begin planning your coffee purchasing for 2026, it’s helpful to understand the market trends and macroeconomic conditions that impact your costs. In Entegra’s latest Cost Outlook report, our team of supply chain and culinary experts report that elevated, volatile coffee prices are not going away in 2026, but they are predicted to trend slightly downwards later in the year. 

The complex elements affecting coffee costs, including tariffs, climate-related supply limitations and market demand, require careful attention for strategic planning. By partnering with a GPO, you lock in coffee pricing. This can be a major win for your business. Your pricing is secure, regardless of climate-related changes, tariffs or any other coffee issue. 

Learn more about the cost outlook for the coffee industry and other key commodities by reading the latest Entegra Cost Outlook report. 

^{*Source 2024 McKinsey report}