Rising Coffee Prices Expected to Hit Canadian Cafes Amid Global Shortage

Have you noticed your coffee getting more expensive lately? You’re not imagining it. Canadian cafés are preparing for even higher prices as the global coffee market faces a serious challenge. 

The causes? Climate change, severe droughts, and supply shortages are all playing a part. So, what’s going on, and what does this mean for your daily coffee run? Let’s take a closer look.

Why Are Coffee Prices Going Up?

It’s not just inflation driving up prices. There’s more to it. The real issue stems from extreme weather in major coffee-producing countries like Brazil and Vietnam. 

Together, these two countries grow more than half of the world’s coffee. Right now, Brazil is facing its worst drought in over 70 years. Vietnam is struggling with poor rainfall too. To make matters worse, wildfires have hit Brazil, damaging crops further.

Coffee is a sensitive plant. It needs just the right amount of sun and rain to grow. Too much or too little can ruin a whole harvest. Because of this, coffee traders are already expecting shortages, and future prices are rising. 

According to experts, coffee futures—the price companies agree to pay for coffee months from now—have shot up by 75% in the past year. That’s a huge jump.

How Is Climate Change Affecting Coffee?

Let’s face it: climate change is making everything more complicated. Over the past few years, we’ve seen unpredictable weather hit crops across the world.

Droughts, wildfires, and erratic rainfall are making it harder for farmers to produce high-quality beans. This means less coffee to go around and higher prices for everyone.

So far, the average retail price hasn’t changed too much. According to Statistics Canada, the price for roasted or ground coffee only went up by 1.6% over the past year. 

But here’s the kicker: over the past four years, prices have climbed by more than 23%. That’s a significant jump, and experts believe it’s just the beginning. If weather conditions don’t improve, prices are likely to keep climbing.

How Are Canadian Cafés Handling This?

Cafés across Canada are feeling the heat. For example, Happy Goat Coffee Co., a popular chain in Ottawa, is dealing with rising costs. Owner Han Langenbahn says it’s a tricky time for the coffee business. 

Cafés like his face tough choices: either they absorb the extra costs, which hurts their bottom line, or they pass those costs on to their customers by raising prices. Neither option is ideal.

“We don’t want to compromise on quality,” Langenbahn says. Happy Goat is committed to using high-quality beans, so switching to cheaper ones isn’t an option. But they also know that customers might not want to pay more for their coffee. People are already watching their spending closely. The café has to find a balance between keeping prices reasonable and maintaining quality.

Many Canadians are also choosing to make coffee at home instead of paying more at cafés. This shift in consumer behavior is something Langenbahn is keeping in mind as he navigates the current market. 

“We know home consumption has increased a lot,” he says. With inflation already making everyday expenses higher, people are being more selective about where they spend their money. And unfortunately, that means fewer trips to local shops.

How Will Rising Coffee Prices Affect You?

Here’s the thing: it’s not just cafés that are feeling the pressure. If you buy beans or ground coffee to brew at home, you’re going to see higher prices soon too. 

Experts say that retail prices are more directly linked to the cost of the raw commodity. So, as the price of beans goes up, so will the price you pay at the grocery store.

Michael von Massow, a food economist at the University of Guelph, says that prices at coffee shops might not rise as sharply as in grocery stores. Why? Because cafés have other costs to consider, like wages, rent, and the price of other ingredients. 

These extra factors can “water down” the impact of rising bean prices. However, that doesn’t mean café prices won’t go up at all. It just means they may increase more gradually than what you see on grocery shelves.

For farmers, this price volatility is even worse. Many farmers rely on consistent yields to make a living. When their crops suffer due to extreme weather, they have fewer beans to sell. 

Some may even be forced out of the business entirely, leading to further shortages. As fewer farmers stick with coffee, the supply of high-quality beans could shrink, and retailers may turn to cheaper, lower-quality options.

Is There Any Relief in Sight?

Unfortunately, climate change isn’t going away anytime soon, and that means the uncertainty in coffee pricing is likely to continue. 

Adam Pesce, president of Reunion Coffee Roasters in Toronto, explains that the industry is facing more unpredictability than ever. It’s harder to plan for future prices when extreme weather can ruin a crop in an instant.

However, Pesce does believe that the market will eventually stabilize—just not in the short term. “Coffee has always been a tradeable commodity, and prices will settle,” he says. But for now, consumers should expect to pay more for their daily cup of coffee, whether at home or at their favorite café.

How Will Canadian Coffee Drinkers Be Affected?

If you’re someone who values quality coffee, prepare for some sticker shock. Cafés like Happy Goat, which refuse to switch to lower-quality beans, may have to raise prices soon. And while Langenbahn hopes customers will understand, he knows it’s a tough sell in today’s economy.

Other roasters and cafés are in the same boat. If one raises prices, others will likely follow. “We won’t be the only ones,” Langenbahn says. He takes some comfort in the fact that everyone in the industry is facing the same challenges. The question is, how much will customers be willing to pay for their favorite brew?

As for home brewers, the impact might be felt even sooner. Grocery store prices are already reflecting the jump in coffee bean costs, and that trend is expected to continue.

What Can You Do?

So, what does this mean for your morning cup of joe? It might cost a little more, but there are still ways to support your local cafés. 

Consider choosing shops that prioritize quality and sustainability, like Happy Goat. They’re committed to keeping their standards high, even in tough times.

While the price of coffee may continue to rise in the short term, the global market will eventually find a balance. For now, be prepared to pay a bit more for your favorite brew, but know that you’re supporting an industry that’s facing some serious challenges. 

The next time you sip your coffee, think about the journey those beans took—and the people who made it possible.