As the year draws to a close and we head into 2025, there comes the opportunity to reflect on the world of coffee over the past 12 months.
The Shifting Coffee Market
With the highest coffee market prices on record making mainstream news in December, it is natural to start with this point. As with the recent market volatility in 2021/2022, it is primarily climate that is driving the changes. While the previous spike was mainly driven by frost in Brazil, the latest price rises represent the combination of weather events in different countries around the world. In reality, the coffee market is always about many countries around the world, but with Brazil being such a big producer, it has a huge impact. Vietnam doesn’t get talked about as much in speciality, as it is the world’s largest robusta producer. The coffee industry is full of conceptual separations, whereby speciality has a narrative and a belief that it is separate from commercial coffee. The reality is, it is all interconnected. The same goes for robusta. The weather events in Vietnam meant that, very quickly, robusta prices were comparable to Brazilian arabica prices. The coffee market pricing essentially works on predicted outlook. There are key times in the year when crops get reported on, and this outlook drives the C market. The current outlook has all the coffee trade houses expecting the current high prices to hold throughout 2025 and possibly through 2026.
The current prices, as of writing this newsletter, are roughly triple what they were throughout the 2010s. Adjusted for inflation, the 2010s prices were all-time lows. I have always thought these prices were unsustainable, and I made a five-year bet with some coffee traders. With all the global macroeconomics and climate at play, I thought the market wouldn’t go back to the one-dollar-per-pound mark following the 2021/2022 price fluctuations, whereas they felt it would return to “normal” pretty quickly. I phoned up the importer recently and asked him if he was going to increase the volume of whisky I get as my prediction was more right than I thought it would be. He said no, and instead he will send me the whisky early as the market clearly isn’t going back to a dollar. I think that with more consistent higher prices, you will start to see these costs come through the market and into coffee companies’ pricing in 2025, as businesses won’t be able to absorb the difference as often happens in short-term spikes.
Speaking of rising prices, I was asked to do a talk on the £5 flat white at the Caffe Culture Show in London. When researching the current pricing in the market, I was surprised to see some data indicating that, in the mainstream market, there has been some movement back to instant for the first time in a decade. With the cost of living rising, this is less surprising. The large processed formats are very compelling when the purchasing decision is solely about the lowest per-cup price. Interestingly, mainstream instant and pods are most often bought on discount and in bulk. It is quite amazing to comprehend that mainstream instant coffee typically works out at 4 pence per cup.
Challenges for Cafés and Consumers
It is true, and I think more well-known than ever, that the biggest costs for cafés are not the coffee, but the staffing costs and rent. Saying this, in a typical speciality café, the cost of coffee and ingredients is much higher than this adage would imply. In fact, for many shops, it’s 25% (after tax) of a drink’s cost. There is a strange phenomenon with pricing in independent cafés. The price of a bag of coffee from the retail shelf always displays a higher ingredient price than the mainstream chains or supermarket bestsellers. However, the price of a cup of coffee is not only comparable but in many cases cheaper in the independent café than it is in a high street branded chain.
An article by United Baristas showed that a £4 flat white today is far less profitable than a £3 flat white in 2016. That article looks at Brexit and COVID’s impact on the labour market, and actually doesn’t show any increase in the raw ingredient cost at all. Cafés are challenging to make profitable, and 2024 has been a struggle for many in the business. With the new government budget and ingredients cost increases, cafés in 2025 will need to either increase their pricing or change their model.
When I was researching this talk, I put a question out on Instagram, trying to gauge at what price people’s habits change. The answer wasn’t clear. A quality-driven café is always trying to focus on quality and charge what that costs, whilst also trying to make the coffee affordable, with a few exceptions, ha.
It’s not all doom and gloom, though. Boutique or specialty coffee is well-positioned to weather the storm, with the biggest impacts being on the commercial coffee market. I firmly believe cafés and coffee companies who focus on both product and experience will succeed in a more challenging and competitive market. More than ever, cafés need to deliver great value.
Emerging Trends in Speciality Coffee
Anyway, enough money talk! 2024 was interesting in many other ways for the coffee industry. The World of Coffee event in Copenhagen was the most well-attended on record. This event is held in different places around the world each year. I think the attendance of this event is both an indication of the continuing growth of the industry and the passion of people to explore it, as well as people’s desire to have a nice time in Copenhagen. Events like this are often used as barometers for trends and zeitgeists in the world of coffee.
I think we continue to see coffee evolve in many directions. The trend is one we have seen for a few years now. On the one hand, there is more automation, efficiency, and a focus on scale, whilst simultaneously there is more exploration of deconstructed artisan processes and micro or nano approaches to speciality coffee. This sounds like a contradiction, but it just demonstrates how varied and segmented the coffee world is. At the boutique end, there is more interest than ever in exploring the minutiae of brewing theory and technique, and more small-lot curated batches of beans.
I think we are starting to see an interesting evolution of what I call “high intervention” coffee. The coffees that started coming out of Colombia in the past few years, which use a number of techniques manipulating bacteria in fermentation as well as the addition of other ingredients, have started to pop up more in other origins. Although I have found myself a detractor of many of these coffees, which I think taste and smell like they’ve been accidentally mixed with soap from Lush, I have started to see more and more examples of more refined cup profiles using similar techniques. And they taste good.
While on the subject of changing my mind on certain approaches to coffee, we recently sent out samples of an instant coffee trial we had done, following having my mind changed on how good instant coffee can taste. Coffee is a very challenging subject, more so than it appears to many. The number of variables that interplay with each other produces many riddles to solve. The instant coffee we tasted was an example of key variables being adjusted to create a result that is greater than each of those parts. With more and more people around the world exploring and digging into the theory of how to approach coffee, there is a community learning. We all benefit from this. But the fact that even with so many clever people trying to solve different coffee problems, we still have so much to improve, is a demonstration of the challenges of the humble coffee bean.
A trend I have seen in 2024 is more and more nano roasters. Utilising roasters like Roest, Aillio Bullet, and Stronghold, there are more and more very high-quality, very small-batch coffee roasters. I am really impressed with the results people are getting off smaller roasters now. The community continues to explore the rabbit hole of brewing variables. This year, the blind shake of a ground coffee dose moved to the forefront of the distribution debate, stealing the spotlight from raking techniques. We saw a scientific paper from my old friend Chris H. Hendon and his collaborators on the impact of spraying water on coffee beans before you grind them. The exact results are debated depending on certain variables, but the spraying, combined with slow feeding of beans into grinders and shaking the grounds, are all techniques born out of the challenges of grinding coffee. The project I am involved in on trying to rethink coffee grinding continues to move along with exciting results.
Myself and Chris weren’t able to get Water for Coffee 2 wrapped up in 2024, but hope to do so in the first half of 2025. Water continues to be a challenging part of the coffee conundrum, both in terms of understanding and practical solutions.
The mission to look at what other coffee species could taste like continues. I tasted more robusta and liberica this year than any year before. I think there’s quite a bit here that is interesting to think about. Robusta and liberica may be more resilient to certain climate and disease factors but are still susceptible to extreme climate swings. Trying to get these species to taste like a fruity fermented arabica is novel and fun, but I think the real opportunity/area of value is to either pursue balanced profiles of these coffees that have wide appeal, or profiles that are unique to that species.
I had heard murmurs about how good the Amazonian robustas from the state of Rondonia in Brazil are, and had the opportunity to taste some at a tasting in London hosted by Notes. They were certainly interesting. The profiles were boozy, whisky-like, spicy, and aromatic. I always think robusta performs better at higher strengths and less well on the cupping table. The coffee blended with arabica in milk was really impressive. Radical idea I know: blend robusta into espresso. I do think you may see a return to robusta espresso blends with premium robustas in them. Robusta has its own genetic spectrum, and I think we will see more exploration of robusta in 2025 and beyond.
Concluding Remarks on a Year in Coffee
Our Bath café turned 15 years old last month, whilst our London café turned one year old. Crazy really to think it’s been 15 years. Here’s to another 15 years in both Bath and London. One of the themes I focused on in 2024 was the idea of maintenance. Specifically, a focus on valuing maintenance in reaction to the glamour of innovation and newness. A lot of what we do in industries like coffee isn’t about rethinking and redesigning things, but it is instead about crafting something over time with focus and intention on quality. I think I appreciate more than ever the idea of making something repeatedly to a high standard. Sure, there can be refinement and every now and then a rethink if the experience and evidence justify it. But maintenance is a huge, often-overlooked part of what we do in speciality coffee. I like wearing these two hats and expect to wear them both in 2025 and for the next 15 years.Lastly, I want to thank you for reading my thoughts on coffee, and for supporting what we do at Colonna. I also want to thank our amazing team, who I am very proud of. I raise a caffeinated ceramic cup in celebration of the year that has been and the year that is to come.
Best,
Maxwell