Plecy
In recent years, the coffee market has experienced a significant surge in prices, driven by various global factors affecting both supply and demand. However, supply alone does not determine market trends—consumer sentiment, purchasing power, and economic perception play a crucial role in shaping coffee consumption patterns.
While the United States is one of the largest coffee-consuming markets, Europe also plays a key role in global coffee demand. In this article, we analyze how rising prices are impacting consumers in both regions and how these shifts could shape the future of the global coffee market. Now we discover the effects of the rise in coffee prices and new US tariffs
Coffee, one of the world’s most beloved commodities, has seen record-breaking price increases in recent months. The reasons behind this surge are complex and have been explored in detail in previous articles on our blog (link). Here, we focus on the consequences of these price changes.
According to a Marketscreener report, the price of Arabica coffee exceeded $3.60 per pound in January 2025, reaching an all-time high. This price spike is being felt across both European and American markets, where consumers are becoming increasingly price-conscious and adjusting their purchasing habits accordingly.
In the United States, rising coffee prices are adding to consumers’ financial concerns, as household debt and economic uncertainty continue to rise. According to the University of Michigan Consumer Sentiment Index, consumer confidence dropped to 67.8 in February 2025, down from 71.1 in January, marking its second consecutive decline and reaching its lowest level since July 2024.
The Rise in Coffee Prices and New US Tariffs: this decline in confidence is exacerbated by rising credit card debt, late payments, and growing economic instability. Additionally, macroeconomic factors such as the trade war with China and recent tariffs on imported coffee have further dampened consumer confidence. As a result, coffee consumption patterns are shifting—many Americans are opting for cheaper alternatives or reducing their purchases of high-end coffee brands.
In Europe, coffee consumption is also affected by increasing economic pressure. Unlike in the US, where coffee spending is closely tied to large coffee shop chains, European consumers have a stronger tradition of preparing coffee at home, favoring ground coffee and coffee capsules.
However, the surge in coffee prices is prompting behavioral changes in Europe as well. In Italy, where coffee culture is deeply rooted, price sensitivity is rising. Economic constraints have led many consumers to opt for more affordable coffee machines and switch to lower-cost coffee varieties instead of premium blends.
According to Ismea, coffee sales in Italian supermarkets and grocery stores dropped by 2.1% in volume in January-February 2025, following a 3.3% decline in 2024.
As coffee prices continue to climb, global demand is showing signs of contraction—even in traditionally high-consumption markets like the US and Europe. Analysts predict that as FIFO (First In, First Out) inventory strategies phase out lower-cost stock, coffee prices will remain elevated. This could lead to new challenges for coffee producers, who will need to strike a balance between competitiveness and profitability.
The interplay between rising coffee prices and changing consumption habits is shaping the future of the coffee market. While US and European consumers are becoming more cautious, the global coffee industry remains dynamic, with emerging markets offering new opportunities.
Consumer spending power, economic policies, and evolving preferences will be crucial factors in determining the future direction of the coffee industry worldwide.