Coffee enthusiasts across Canada hoping for a break from steep prices at the checkout will need to brace for a longer wait. Despite a recent reduction in U.S. tariffs, the anticipated price relief has not materialized, according to a leading Italian coffee roaster.
No Quick Fix for Soaring Bean Costs
The core of the issue lies with the cost of unroasted, or green, coffee beans. The price of Arabica coffee beans surged to a record high last month. This peak was driven by a perfect storm of lackluster harvests in key growing regions around the world, which coincided with the imposition of U.S. tariffs on coffee from Brazil, the globe's top exporter.
While prices have eased slightly since U.S. President Donald Trump expanded tariff breaks for Brazilian coffee, they remain stubbornly high by historical standards. Cristina Scocchia, Chief Executive Officer of Illycaffè SpA, expressed the industry's frustration, stating, "We were hoping for a much more dramatic drop."
Another Price Hike Coming for Consumers
In response to these sustained high costs, Illycaffè, the company famous for its premium espresso in silver-and-red cans, has announced it will implement another price increase in January. This will be the company's third price hike this year.
"There is a limit to how much a company can absorb a level of green coffee price, which is so unhealthily high," Scocchia explained in an interview. She indicated that the price rise would be applied across all countries and sales channels. This move by a major industry player is a strong signal for the wider market.
Market Trends and Future Predictions
Illycaffè's decision is likely to be mirrored by other roasters. Carlos Mera, head of agricultural commodity market research at Rabobank, notes that consumer prices often lag behind commodity cost increases by "many months" or even a full year. He anticipates further price gains on grocery store shelves in the coming months.
Looking ahead, Illycaffè forecasts that prices for unroasted beans will only begin to stabilize in the second half of 2026, settling between $2.80 to $3.00 per pound. This predicted range is still above the average seen over the past five years. Scocchia attributed the persistently high prices more to financial speculation than to actual physical supply shortages.
Despite the challenging environment, coffee demand has proven resilient. Illycaffè has managed to boost its sales volumes by absorbing some of the cost increases to limit the impact on consumers. The company expects the overall coffee market to continue growing at a single-digit rate.
