Exclusive | Crisis brews as global drought set to send NYC’s coffee prices soaring

A Brewing Coffee Crisis: Rising Costs Hit New York

A coffee crisis is unfolding, and New Yorkers are bracing for the impact. The cost of their morning coffee is about to become even more expensive, with prices expected to increase by up to $1 per cup. This hike is driven by a prolonged drought in Brazil, the world’s largest producer of Arabica coffee beans, which has sent shockwaves through the global coffee market. For coffee lovers and business owners alike, the situation is grim. Peter Longo, whose family has owned Porto Rico Importing Co. in New York for three generations, describes the situation as “a nightmare.” The crisis is the latest blow to an industry already grappling with inflation and rising operational costs.

The Drought and Its Global Impact

The severe drought that has ravaged South America since 2023 has destroyed coffee crops and depleted global stockpiles. Arabica coffee beans, which are highly prized for their quality and flavor, have been particularly hard hit. The shortage has caused Arabica futures to skyrocket, reaching a historic high of $4 per pound on commodity markets—double the price from just a year ago. This surge has forced coffee roasters and shop owners to adjust their pricing to stay afloat. For example, Peter Longo recently raised the price of his bulk coffee beans from $15.99 to $16.99 per pound, and his coffee bar is set to increase drink prices by 5-10% this month.

Small Businesses Struggle to Cope

The price increases are not unique to Porto Rico Importing Co.; coffee shops across New York are facing the same dilemma. Teodora Tomic, co-owner of Vibrant Coffee in the West Village, expressed frustration over the situation. “It’s disturbing,” she said. “We don’t want to change the prices.” Despite the reluctance, the shop may have no choice but to raise prices by $1 in the coming months. However, Tomic and her team are holding out hope that the situation might stabilize by spring or summer. Her co-owner, Stefan Tomic, highlighted the challenges small businesses face in competing with larger chains, which often secure their coffee contracts for multiple years, shielding them from immediate price fluctuations.

The Uneven Playing Field Between Big and Small Businesses

Large coffee chains like Starbucks have taken steps to mitigate the impact of rising costs. The company has announced that it will pause price hikes through the end of its fiscal year in September. However, independent coffee shops and smaller roasters are not afforded the same luxury. According to independent coffee consultant Steven Colten, no business in the coffee industry will escape 2025 unscathed. “A lot of these high prices haven’t hit the supply chain yet,” he warned. “Roasters are going to have to raise prices.” Colten predicts that retail coffee prices in New York could surge by 10-25% in the next few months.

Consumers Feel the Pinch

For coffee lovers, the price hikes are adding to the financial strain. At trendy coffee shops like Blue Bottle, where a medium latte already costs $7.25, the projected increases could push the price as high as $8.85. Customers are growing increasingly frustrated. “It’s so expensive!” exclaimed Ana Rudnytska while on a coffee run for her coworkers. Another customer, Sam Zingerman, echoed the sentiment, saying, “I think that’s crazy. The prices are already very high.” Many are finding it difficult to afford even a basic cup of coffee, with one customer lamenting that coffee has become “designer coffee almost.”

The Road Ahead

As the coffee crisis deepens, businesses and consumers alike are bracing for the worst. While some shops are holding off on price hikes in hopes of a better future, others are raising prices to stay in business. For now, the outlook remains uncertain, with analysts predicting further disruptions in the supply chain. One thing is clear, however: the coffee landscape in New York—and around the world—is changing, and neither businesses nor consumers will emerge unscathed.