Why Is Coffee So Expensive? (Explained)

For coffee drinkers who are serious about their caffeinated concoctions, paying substantial amounts for a quality Frappuccino may not seem so out there. However, even the most avid coffee enthusiasts have started to wonder why coffee is so expensive nowadays.

Coffee is so expensive because it takes a long time to grow, harvesting it can be difficult, environmental changes affect harvesting, the packaging is expensive, and luxury coffee has become increasingly popular. Coffee is also taxed in many states, which can contribute to a higher price.

From commercial transactions to environmental issues, numerous complexities are involved in coffee growing and production that impact the cost and final pricing. Let’s take a closer look at what makes our coffee so expensive.

Coffee Plants Take A Long Time To Grow

A coffee plant, which is more akin to a tree, may survive for over a century. However, the typical lifetime is closer to twenty years.

Fortunately, producing the fruit that yields the coffee beans does not take nearly as long. From the moment the tree is planted until it bears fruit, it will take three to four years.

Some plants might take up to five years to produce usable fruit. To ensure that each plant produces as many coffee beans as possible, farmers must care for and nourish them.

Harvesting Coffee Is Difficult 

harvesting coffee

The harvesting process involves numerous processes that might significantly impact the price of a bag or cup of coffee. There are two main methods of harvesting that are used by coffee farmers.

Harvesting by hand is known as selective harvesting. Farmers who harvest by hand are able to ensure that the best fruit is obtained (which is ultimately the coffee beans). This method produces superior coffee, but it takes a long time and is thus more expensive.

Strip harvesting occurs when all of the fruit is removed from the trees, regardless of how developed each piece is. Coffee produced via strip harvesting is frequently of lesser quality.

Environmental And Climate Changes

coffee plantation

For coffee producers, the environmental consequences of climate change have altered the harvesting and, therefore, the quality of their coffee.

Farmers are trying to locate new areas to put coffee plants, while multi-generational farming operations have been forced to close down as a result of climate change. 

These environmental concerns have had a significant influence on overall coffee exports, causing coffee prices to rise.

The majority of coffee plants can only be harvested once a year. Coffee plants will be able to produce two harvests in some areas due to the environment. Prices will be lower if the climate where coffee is cultivated allows for two harvests.

Packaging Coffee Can Get Pricey 

packaging coffee

Coffee beans are sensitive to moisture damage. If the coffee is not properly packaged and sealed, it may be damaged by rodents or insects.

The packaging used to ship coffee must enable air to move freely. Jute is usually used to bundle a lot of coffee that is shipped to other countries for consumption. However, nowadays, many coffee producers opt for plastic packaging to transport their coffee.

Before it reaches its destination, the packaging is important for keeping the coffee fresh and free of rotting or spoiling. Most coffee travels great distances by rail or ship, and the jute or plastic packaging must be of excellent quality to protect the coffee throughout the voyage.

Whatever form of packaging is chosen, this attention to detail raises the cost of coffee.

The Harvesting Process Demands A Lot Of Labor

harvesting coffee beans

From the moment the coffee is planted until the time it reaches your grocery store or restaurant, it is anticipated that more than thirty people will be involved. There are a huge number of phases in the process, from seed to cup.

Unfortunately, many of these folks are not always given a fair salary, but there are still costs associated with the wages of hundreds of people who cultivate and prepare the coffee you consume.

Many individuals have been involved in the process of delivering that warm cup of coffee to your table after the coffee has reached stores, restaurants, and cafés.

Luxury Coffee Has Become Popular

luxury coffee beans

Coffee, like many other goods, has grown to encompass dozens of different sorts and variations. One of the reasons Starbucks has been so successful is because they provide specialty coffee.

It’s apparent that the consumer will pay more when well-known coffee chains and shops come out with all types of specialty coffees with all kinds of extra additives.

When a new coffee fad starts to spread, demand can skyrocket almost immediately. The financial implications of coffee trends tend to go unnoticed as long as supply can match demand.

Premium coffee is in high demand, which is why it is sometimes much more costly than the typical bag of coffee. Aside from supply and demand, there are many other elements that influence premium-grade coffee, yet it still has an impact on luxury coffee companies.

Coffee Is Taxed

Taxes are just one more reason you’re paying more for your coffee.

You may have to pay taxes on coffee depending on where you live and whether you purchase a bag at the grocery store or a cup at a high-end café. That means you’ll have to spend a little extra each time you go to the supermarket to get your favorite type of coffee.

This may seem perplexing, but the point is that the taxation of coffee varies from state to state and from grocery shop to restaurant. When state and municipal taxes are added together, the total tax rate in the United States is over 9%, which some individuals pay for coffee.

This comes close to four million dollars just in sales tax for coffee. 

Summary

Coffee prices will continue to rise because of many reasons, ranging from Starbucks coming out with extravagant drinks to places like Haiti suffering extreme environmental destructions that affected their coffee production.

While it may be difficult to adjust to these high prices, I think our current standard of coffee definitely deserves a higher price tag.