For many people, coffee is more than just a beverage. It represents a daily ritual, a way to connect with others, and for some, a necessary fuel for work. However, for those who feel the impact of rising living costs around the world, it serves as a daily reminder of the economic pressures as they purchase their morning cup.
The price of coffee resembles a captivating dance, constantly shifting and influenced by global economics, intricate supply chains, and evolving consumer trends. Delving into historical coffee pricing data reveals remarkable fluctuations that have unfolded over the years.
From surges in the 1970s to dips in the early 2000s, it has been a mesmerizing rollercoaster ride. Yet, this rollercoaster extends beyond mere lines on a graph; its real-world implications touch the lives of everyone, from small-scale farmers to beloved local coffee shops. The chart below tracks the prices of Robusta and Arabica beans ($ per kg) since 1960.
When it comes to coffee, the true battle lies in flavor and origin. Robusta beans bravely offer twice the caffeine kick, while Arabica beans seduce with their mild, aromatic charm. It’s a showdown of boldness versus subtlety, where taste buds crave the bolder, more distinct notes. Choose wisely, caffeine enthusiasts!
And here’s the thing – their prices? They’re actually moving in opposite directions lately. Check out the downward trend in Arabica, and the upward trend in the Robusta prices in the chart below which zooms in on the prices between 2021 and 2024. Pretty interesting, right?
Examining the relationship between price movement and total production is fascinating. However, we were unable to find a detailed breakdown of global production between Robusta and Arabica so it is difficult to tell how supply has affected the price.
Production growth has remained relatively consistent since the 1970s. When analyzing the relationship between pricing and production trends, a visual examination of the chart below reveals several intriguing price spikes that don’t seem to be directly influenced by changes in production.
Vietnam, the emerging powerhouse in coffee production, has quickly become a major player in the industry. Remarkably, 93% of Vietnam’s coffee production is Robusta. This remarkable rise is shown in the accompanying YouTube video and chart below.
So what does this mean for your the price of your morning latte? Less than you might think. Â You have to factor in milk, barista costs and business expenses. Â Consider also that a shot of espresso is only, say, 10 grams. Â By my calculation, the cost of the coffee bean (where I live) accounts for only 7% of the total cost of my brew.
Anything surprising in that analysis for you?
Shoutout to these awesome sources for providing the data for this post: World Bank, International Monetary Fund and Our World in Data. And a big thank you to Canva and Flourish for the awesome visuals!
And now some AI-generated (through Canva) coffee cups just to make you thirsty. Â
