the specialty barrier to entry

Coffee prices, following years of poor harvests, increased demand, and the current geopolitical climate, have experienced a notable spike this year, accompanied by widely fluctuating adjustments in the specialty sector.

What this has lead to is an immediate increase in cost to businesses serving commodity coffee, and a higher percentage premium on specialty coffee, especially when pricing microlots and 87+ pt coffee, with a moderate increase to base prices.

Interestingly, despites these hikes, the perceived value of specialty coffee has not seemed to change in equal measure. While a latte has become more expensive in most places, the average specialty consumer seems generally agreeable to pay more.

But the average commodity consumer does not mirror that mentality, so many commodity coffee serving businesses (think your local diners) just eat the decreased margin and keep filling and re-filling those mugs.

I believe the direction we’re moving right now is actually bringing the barrier to entry into specialty coffee lower than ever. I spoke to one of those local diners in Monterey and was shocked to learn that their coffee now cost more than $10/lb.

The difference in price between those sub-80pt commodity lots and 82-84pt value specialty lots is, at the wholesale level, now a matter of only $2-$3/lb. The increase in quality from one to the other may now be worth it to some of those businesses who would never have before considered it.

All that to say, get out there local specialty roasters. Widen the nets you’re casting, seek out new demographics of wholesale partners, and see what sticks. The results may surprise you.

Stay Smooth,

Noah