Inflation Pushes Coffee Prices Higher Across UK
Coffee lovers across the UK are paying more for their daily drinks as cafés and major coffee chains increase prices in response to rising costs throughout the industry.
Some London cafés are now charging as much as £6.50 for a flat white, reflecting mounting financial pressures from higher operating expenses and global supply challenges.
Prices Continue to Climb
Italian coffee brand Lavazza has increased the price of a sit-in flat white at its flagship London café from £5.50 to £6.50, while the takeaway version now costs £4.40, up from £4.00.
Other major chains have also raised prices. A takeaway flat white costs around £5.20 at Starbucks in central London and £4.70 at Costa.
Extreme Weather Hits Coffee Supply
The coffee industry is facing significant supply pressures due to adverse weather in the world’s largest coffee-producing countries.
Heavy rainfall in Brazil throughout June disrupted harvesting operations. In the week ending 28 June, rainfall was nearly 2,000% above historical averages, leaving fields too wet for machinery and reducing bean quality.
Meanwhile, Vietnam, the world’s largest producer of robusta coffee, is battling drought conditions. Farmers are also dealing with sharply rising production costs, with fertiliser and fuel prices increasing by around 30% year-on-year, while labour costs have climbed 33%.
Coffee Bean Prices Reach Record Levels
Lavazza says the market has become increasingly volatile. Since 2021, arabica coffee prices have risen by approximately 230%, while robusta prices have increased by about 325%.
Company chairman Giuseppe Lavazza said the coffee market has fundamentally changed, adding that at least two consecutive years of strong harvests in Brazil and Vietnam would be needed to stabilise prices. Current weather patterns, however, make that unlikely.
He also warned that ongoing market uncertainty has encouraged speculative trading, contributing to record-high coffee prices.
Businesses Face Growing Cost Pressures
Beyond coffee beans, cafés are also struggling with rising wages, taxes, energy bills and other operating expenses.
According to Grind founder David Abrahamovitch, a £4.10 flat white generates only 18 pence in profit. Staff wages account for £1.60, cups cost 55 pence, core operating expenses total 96 pence, VAT adds 68 pence, and other costs make up the remainder.
He added that the price of unroasted green coffee beans has more than doubled since 2024.
Higher Prices Likely to Continue
Industry experts believe coffee prices are likely to remain elevated.
Susannah Streeter, chief investment strategist at Wealth Club, said coffee prices have been highly volatile because of climate-related disruptions and rising operating costs. While many consumers are still willing to pay more, she warned that there may be a limit to how much customers will accept before reducing discretionary coffee purchases.
The British Coffee Association also expects volatility in global coffee markets to continue, with domestic factors such as energy, labour and regulatory costs adding further pressure on businesses.
source: the guardian
