President Trump may have dropped his tariffs on coffee recently, but Boston area coffee sellers and roasters are still dealing with the fallout of higher prices on beans.
Boston already has one of the highest prices in the country for a cup of coffee — and it’s been rising. The median price of a cup of coffee in Boston rose to more than $4 last month, according to data from restaurant software company Toast. That’s more than 45 cents higher than the national median.
Local coffee businesses are trying different things to reduce the sticker shock for coffee lovers. Some have switched up blends with beans from lower cost countries. Others have instead increased the costs of other goods, like muffins and pastries.
Still, the morning staple will likely continue to be more expensive because tariffs already strained the coffee supply chain.
“Prices are about to go through the roof for us, which will then mean we have to raise prices,” said Josh Gerber, owner of 1369 Coffee House in Cambridge, which has been selling coffee in the area for more than 30 years.
That’s because his next batch of coffee was purchased while tariffs were still in place. Gerber said he’s been told by his coffee roasters that prices will go up by more than 30% — or an extra $3 for a pound of beans.
“Unfortunately, if you contract out nine months of coffee when tariffs are there, you’re still paying the tariffs even if a month later, those tariffs are gone,” Gerber said.
Baristas at the 1369 Coffeehouse in Inman Square prepare coffee drinks for a long line of customers in the morning. (Jesse Costa/WBUR)
Ground coffee being prepared to make espresso at the 1369 Coffeehouse in Inman Square. (Jesse Costa/WBUR)
Coffee prices already went up late last year due to severe drought impacting harvests. Tariffs pushed coffee prices even higher.
Gerber is still assessing what his price hikes will be, but said he may have to increase his coffee by roughly 30 cents in the coming weeks. That would push a medium-sized cup of regular brewed coffee to over $4.
“My fear is that there’ll be a breaking point for consumers. And I don’t know where that is, but it’s my biggest anxiety,” Gerber said. “We have to raise prices in order to make the math work, but at some point will people stop coming because they find it too expensive? My hope is that people will understand and coffee will continue to be an important part of people’s daily routine.”
To mitigate some of the cost increases, Gerber changed where he sources some of his beans. He shifted away from Brazilian coffee — which had a 50% tariff at one point — and got coffee from Mexico and Colombia instead, which cost less.
Other local coffee shops have made similar changes.
Bryan Melendez, the co-owner Kaori Cafe in East Boston, chose to go with coffee from Costa Rica instead of Brazil due to costs.
“As much as we want to offer some other origins, it’s just too expensive for our bottom line,” said Melendez, who just opened his coffee shop in November. “But it’s also great because not many places actually offer Costa Rican coffee. And people have been loving it, thank god.”
Some coffee shops are trying to avoid raising prices at all costs, looking at back-end ways to shift the tariff burden.
Erik Modahl, the owner of Beantrust coffee in Beverly, said he has hasn’t changed his coffee prices in order to give his customers some consistency. But Modahl has increased prices on the distribution side of his company, which supplies other businesses with his brand of coffee. He also increased the price of pastries in his coffee shop.
“I think the coffee is one of those things if you just keep increasing pricing, I think it does create resistance,” Modahl said. “I would say people are willing to pay a little bit more for their goodies.”
Ev Fox pours freshly roasted coffee beans to be packaged up into bags at Broadsheet Coffee Roasters in Somerville. (Jesse Costa/WBUR)
Coffee roasters are also feeling the financial strain and have made changes, too. Roasters typically source coffee beans, roast them — turning them from green coffee beans to the brown coffee beans used to brew drinks — and distribute them to retailers.
Marty Souza, the head of wholesale at Broadsheet Coffee Roasters, which supplies coffee to around 80 different businesses, said one fix was installing large storage racks at their Somerville facility.
“This helps us reduce our storage costs and store more of the coffee that we’ve already purchased here in the building rather than have it stored offsite,” Souza said.
Like other coffee businesses, Souza said they’ve also switched up where they source the base coffee for some of their popular blends — buying much more from Mexico and pulling back from places like Guatemala, Peru and Columbia.
But Souza said the company has still taken a hit with tariff costs, so some of their bagged coffee has gone up in price — about 75 cents to a dollar more on store shelves.
And he doesn’t expect to see coffee prices come down anytime soon.
Green Mexican coffee beans being vacuumed into a roaster, front, while freshly roasted beans swirl around in the coffee bean cooler at Broadsheet Coffee Roasters in Somerville. (Jesse Costa/WBUR)
Coffee roaster Michael Nunziato measures green coffee beans preparing for the next batch to be roasted at Broadsheet Coffee Roaster in Somerville. (Jesse Costa/WBUR)
That’s because the market has already adapted to tariffs, experts say. Once you add that volatility to the mix, it’s hard to bring prices back down, said Kate Ashley, who teaches supply chain management at Northeastern University.
“This could be a new equilibrium,” Ashley said. “I certainly don’t see any immediate sign of coffee prices dropping to anywhere near where they were even a year ago.”
And, as coffee shop owners fear, the high coffee prices may change consumer habits, according to Ashley.
“I believe we’ll still have offerings at a lower price point that’s accessible to many consumers,” she said. “But in terms of the specialty coffees or the specialty espresso drinks, that might become more of a special occasion treat for a large segment of Americans.”
Her advice for local coffee houses: lean into being a community space. And that will keep customers coming back for more than just their caffeine boost.