We offer this monthly newsletter as a way to share what we’re learning and help all of us in the FedUp Foods ecosystem stay connected to the factors driving that market.
REMINDER
Coffee prices have three main tiers. In these newsletters we will address all three and how they’re currently and actively affecting coffee pricing.
The Current State
When we sent our April newsletter, the green coffee bean price was at $3.43/lb.
Over the last month that price has risen to $3.70/lb. As of this writing, Trading Economics is expecting coffee to trade at $4.10/lb by the end of 2025.
MARKET DYNAMICS
The market received good news from Brazil, the world’s largest coffee producer and exporter. Earlier forecasts of a dry year leading to a contraction of supply were revised, with an updated forecast showing an expected 2.7% increase in yield compared to 2024.
There is more than meets the eye to that number, however. It represents a combination of arabica + robusta production, with much of the increased total output projected to come from robusta. Arabica is the dominant variety of coffee consumed worldwide, but trades at a significantly higher price than robusta.
RETAIL PRICING CHART
This space in our newsletter will pay specific attention to the retail dynamics of chilled ready to drink multiserve coffee. We will be tracking how the turmoil in the commodity market may be impacting retail prices in this category.
IN SUMMARY
Prices are trending up, but brands are taking individual approaches to navigating the new marketplace. Average SRPs are trending up among the top SKUs in the category, with 10 of the 17 best selling SKUs showing retail prices higher than YAG.
However, this appears to be accompanied by more intensive promotional spending, with TPR pricing consistently down compared to YAG.
What to Watch For
All eyes will be on tariffs and retail prices for the next 30-60 days. The main question is whether the tariffs announced by the U.S. government on April 2, and then postponed for 90 days, will actually go into effect. Many coffee exporting countries are reportedly in talks with the United States to revise trade agreements in an effort to ease tariff rates. We will be following those closely.
Additionally, price increases that brands began exploring in the first part of 2025 would start to really show up in scan data in June and July, so we will be closely monitoring those developments in the Natural and MULO channels.
REMINDER
Coffee Pricing Factors and Tariffs
Importantly, tariffs and geopolitical uncertainty might impact Tier 2 and Tier 3 of the coffee pricing stack even more significantly than they impact the base tier of unroasted green coffee beans. The global trading system is a complicated and nuanced system, and it remains unclear how, for example, disruptions in shipping demand from Asia might impact shipping costs from Central America to the United States. Or, as another example, how the current disruption in coffee pricing will impact the roasting industry, which includes many small local and regional businesses who may not be in a financial position to manage through the current climate.
All of these developments over the next 30-60 days will be critical variables in how FedUp Foods approaches coffee pricing for private label cold brew in the second half of 2025.
