Soaring coffee bean prices may have peaked, says Lavazza
The Italian coffee giant said the sector had faced 'exceptional volatility', with Arabica coffee prices increasing by 70% in 2024 and another 20% in the first two months of 2025 to reach a record high of 4.20 US dollars per pound on February 10.
Between early 2023 and the end of 2024, Arabica prices increased by 190%, while cheaper Robusta beans increased by 263% over the same period.
Lavazza said the price volatility was driven by a 'perfect storm' of droughts in Brazil and Vietnam significantly impacting coffee production and ongoing geopolitical disruption increasing transportation costs and delivery times.
However Lavazza chairman Giuseppe Lavazza said UK consumers may have seen prices peak following a 20% increase in the cost of beans at the supermarket last year.
Meanwhile, a flat white at the firm's flagship cafe off Regent Street in central London is holding steady at an albeit inflated £4 to take away or £5.50 to have in, reflecting current costs.
Mr Lavazza said: 'We think that the market reached a peak at the beginning of this year.
'It is our hope that the price for the consumer has peaked.'
High prices have not dented the 'strong trend' of UK consumers turning to beans to make fresh coffee at home, which began when the pandemic closed cafes but has showed no sign of slowing even now.
The UK retail coffee market, valued at £1.7 billion, has seen at-home consumption rise by 5.7% on the year to date as consumers shift from cafe to kitchen, Lavazza said.
According to its figures, UK households drink 13 million cups of Lavazza coffee each week and use 1.4 million Lavazza capsules, leading to £10 million in sales for the brand's best-selling Qualita Rossa beans over the year to May.
Mr Lavazza said its new Tabli home coffee system, which uses coffee tabs that are individually completely free of packaging, will launch in the UK next year.
Designed to address concerns over the sustainability of aluminium and plastic packaging, Mr Lavazza described the new system as 'the best Lavazza has designed in history'.
'I call it a small miracle,' he added.
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