It Isn't Just Tariffs On Strictly Coffee, Roasters Face Cost Increases From Tariffs On Other Necessities Like Packaging – CoffeeTalk

Local coffee roasters are preparing for increased prices as a result of import tariffs not only on coffee but also on essential products like packaging materials. The impact of tariffs implemented by the Trump administration is being felt at coffee shops throughout the US.

“All of us are dealing with a level of uncertainty that is unprecedented. I’ve never experienced anything like this,” said Mark Overly, president and coffee buyer for Kaladi Coffee Roasters in Denver. He noted that typical specialty coffee prices have surged, with costs rising from $3.50 to $5 per pound to between $7 and $8 before roasting.

In addition to coffee itself, Overly emphasized the increased costs associated with packaging and labor. “Now we’re seeing this significant amount of increase,” he remarked.

Many coffee roasters, including Kaladi, find themselves wrestling with a combination of factors contributing to unpredictable pricing, such as supply chain disruptions, climate change impacts on coffee-growing regions, and fluctuating tariffs. The administration’s tariffs affecting countries like China, Mexico, Colombia, and Canada have disrupted imports, elevating consumer prices and straining trade relations.

Despite pausing tariffs for several countries, the administration increased tariffs on Chinese goods to an unprecedented 145%, sparking denunciations from China as “economic bullying” and prompting potential countermeasures.

Jason Farrar, co-owner and Chief Revenue Officer of Huckleberry Roasters, shared similar concerns. “Our first big hit on tariffs was actually the printing of our bags,” he said. “A manufacturer in China that we use doubled our retail bag price, which is kind of crazy.”

Huckleberry Roasters maintains relationships with suppliers across various coffee-producing countries, managing to source quality beans seasonally. The company has endured significant challenges amidst the ongoing pandemic, including laying off employees and the merging of its cafes.

“The tariffs are a day-by-day conversation with internal staff and importers,” Farrar explained, as they navigate their partnerships with approximately 150 cafes, restaurants, and markets.

Many roasters are simultaneously grappling with the ramifications of climate change, which has led to significant price increases and supply shortages. Overly described the current situation as a “coffee crunch,” emphasizing that coffee prices have doubled in the past year.

Global coffee production is being undermined by extreme heat and droughts affecting major producers like Brazil and Vietnam, creating further supply uncertainty and raising prices.

The International Coffee Organization recently reported that increased uncertainty due to tariffs may also weaken coffee demand as retail prices rise. The ICO Composite Indicator Price (I-CIP) reached approximately $3.55 per pound, reflecting an 80% increase compared to the same time last year.

Overly stated that the tariffs are impacting his operations since half of Kaladi’s revenue is derived from bean sales. He highlighted that due to ongoing negotiations between exporters and importers, they are currently unable to procure beans from Mexico, leaving them in a challenging position.

In the face of these difficulties, both Kaladi and Huckleberry are committed to transparency with their customers and suppliers. Overly believes that prices may eventually stabilize, stating, “We think that the prices of coffee are going to ultimately come down by the end of the year. So many of us are trying to hold off on raising our prices too much.”

As the coffee industry continues to navigate these tumultuous waters, local roasters remain focused on delivering quality products while adapting to an evolving market landscape.

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