£4 for an expresso? Leading coffee boss says customers have reached their limit as prices soar
Charging £4 for an espresso is driving coffee drinkers in London to boiling point, the boss of one of the worlds biggest roasters has said.
Charging £4 for an espresso is driving coffee drinkers in London to boiling point, the boss of one of the worlds biggest roasters has said.
Antonio Baravalle, chief executive of Italian brand Lavazza, said speculation about the price of coffee on international markets had pushed the cost of beans and, by extension, the drink itself to the limit.
Its like when you see the New York Stock Exchange market going up, up, up, up and you say sooner or later it will collapse, he added.
Coffee bean prices have soared globally as bad weather in major growing regions such as Brazil and Vietnam disrupted harvests.
The supply squeeze pushed the cost of higher-quality arabica beans to a record high of $4.39 (£3.36) per pound in February.
But prices have recently plunged to around $3.45 (£3.64) amid fears that US tariffs slapped on imports by Donald Trump will curb coffee demand from American drinkers.
Lavazza is among those likely to be hit by the tariffs as it ships its products to the US from the EU. The Italian firm makes around €400million (£347million from sales in America.
The firm did begin roasting and packaging beans in the US in 2022, but Mr Baravalle told the FT it would take two years to expand capacity to offset the impact of tariffs.
Antonio Baravalle, head of one of the worlds biggest roasters, says customers have reached their limit with rising coffee prices (File image)
Coffee costs are expected to rise even further as the climate crisis targets bean harvests (File image)
He also expected sales to fall this year, despite the company reporting a 9.1 per cent increase in 2024, as rising coffee prices caused consumers to cut back on their morning latte.
When I see three, four pounds for an espresso in London, or eight [dollars] for a cappuccino in New York... I see the limit, Mr Baravalle said.
But coffee drinkers seething over the rising cost could be in for even more pain, with climate change expected to keep hitting bean harvests into the future as weather patterns become more extreme.
The UN warned in a report last month that coffee export prices might rise further this year.
Some coffee producers have opted for cheaper types of beans to offset the rising costs, but Mr Baravalle said Lavazza had not followed suit, squeezing its profit margins.
We decided not to change our blends and we decided to partially absorb the cost of raw materials, he added.
Coffee drinkers will find themselves in a similar position to chocolate lovers, who have also been suffering in recent years as bad weather has pushed up the cost of cocoa beans on global markets.