How Coffee Prices Has Changed Over the Years (1975-2020)

Last week, I wrote a blog post about why coffee is so expensive, and that made me think. How has coffee prices changed over the years? When was coffee the cheapest and when was it most expensive?

I’m finding this really interesting since coffee is something we drink all over the world. We drink it hot, we drink it cold. We drink it when we spend time with our loved ones, we drink it when we are alone. Coffee is a huge part of many cultures, so its price has a huge impact on how much we drink but also on our communities.

The Coffee Prices (1975-2020)

As you can see from the chart below, the coffee prices are clearly unstable. The chart shows the price per pound of raw coffee. Of course, the brands you buy coffee beans and to-go coffee from are much more price stable.

Since 1975, the lowest price seen is in 2002, when you could purchase 1 pound of coffee for a yearly average of $0.5569. This is actually the lowest price seen in 100years and known as the 2001 coffee crisis. The highest yearly average price was in 2011 when one pound of coffee did cost $2.5338.

That is a pretty big price increase. From 2002 to 2011, the price increased by over 350%. A yearly average price increase of 39%!?. Not even oil had the same price increase during the same years.

Chart 1 – Yearly Average Coffee Price (1975-2020)

Data source.

Coffee Prices Adjusted for Inflation

When you look at the chart above, it might seem like coffee prices are pretty much the same as they always have been. It goes up, it goes down, but there is an average somewhere around $1.5/pound.

However, the prices above have not been adjusted for inflation. So, I created a new chart (see below) where I adjusted the numbers for inflation so you can get a clear picture of it.

As you can see, the prices have in reality decreased over the years. The price was on a high In 1977 when you had to pay almost $10 for one pound of coffee (when you adjust for inflation). That is almost 1000% higher than today!

Chart 2 – Yearly Average Coffee Price – Adjusted for Inflation.

When you look at this chart, the 2001-2002 coffee crisis doesn’t look that bad. Of course, the crisis caused a lot of problems for workers and companies relying on coffee for their livelihood. But the prices back then aren’t much lower than right now if you adjust for inflation. The price in 2002, after inflation adjustment, was $0.77/pound and the price at the moment (2020) is $1.1/pound. That is, of course, a significant difference, but if you look at the chart, you can easily see that there have been many bigger jumps.

What About Roasted Beans and To-Go Coffee?

Roasteries and coffee shops don’t fluctuate as much as the raw coffee bean prices, and that is mainly because of two things.

1)    The coffee price is only a small part of a coffee brand’s all expenses. For example, let’s say that the average bag of coffee costs $10 to produce and ship. And let’s say the beans filling that bag costs $1.

The $10 should cover for the coffee beans, but also for roasting, bags, shipping, and labor. So, the coffee itself stands for only 10% of the expenses a coffee brand has. Of course, depending on brad this number might be higher or lower. So, when the raw coffee beans prices increase with 50% (from $1 to $1.5), the total expense increase for one bag of coffee Is only 5%. From $10 to $10.5.

2)    The coffee brands know that coffee prices can fluctuate a lot, and therefore their margins cover that. They know that they can’t lower the price too much, because if the coffee prices increase, they would make a loss selling it. So, when they set the price, they make sure to have margins to allow for a profit even when coffee prices are high.

The prices don’t only fluctuate a lot from year to year, but also during a year. Month to month, or even week to week. Therefore, it is important for brands and coffee shops that they can keep selling their coffee for a profit, even when the coffee price increase a lot.

Here is a chart showing the price-high and price-low for coffee from 1975 to 2020. The red line is the highs, the grey line is the lows. As you can see, some years there are huge differences in price. For example, in 1997, when the high-price almost increased by 200% from the low-price.

Chart 3 – Yearly High and Low Coffee Price (1975-2020)

Not All Coffee Fluctuate

Depending on the coffee plants, the coffee production process and the climate where the coffee is grown, some coffee might not fluctuate in price as much as others. Some plants are more or less resistant to change in weather and therefore, the harvest and price might be more or less affected by it.

Also, lower quality coffee will have a lower fluctuation in price. When coffee I processed, the defected beans are sorted out from the rest. If there has been, for example, a bad harvesting year, the defected coffee beans will probably increase in quantity. The defected beans are sold to lower quality coffee brands, that in this way actually are able to keep their prices low even though the harvest was bad.

Here is a chart over different sorts of coffee beans and their prices from 1998-2018. As you can see, the Robusta coffee does not fluctuate near as much as the Arabica.

Chart 4 – Yearly Average Coffee Price for 3 Different Beans

Data source.

Summary – How Coffee Prices Has Changed Over the Years

The coffee prices have been very fluctuating the last 45 years, at least when it comes to raw (not yet roasted) beans. The price has had an average somewhere around $1.5/pound and there is not much of a difference between the prices today and the prices 30-40 years ago.

However, when we adjust for inflation (see chart.2), we can see that the relative price has been decreasing ever since the 70s. From almost $10/pound in 77 to $1.1/pound in 2020.

The prices don’t only fluctuate from year to year, but also within each year (see chart 3). Sometimes with almost 200%, as in 1997.

That said, the price changes are not the same for all the coffee. Lower quality coffee does for example not fluctuate as much, neither do different sorts of coffee beans (see chart 4).

But overall, coffee is becoming less and less expansive when you adjust for inflation. However, the coffee prices are for sure unstable and might increase or decrease fast.

Thank you for reading. Feel free to share this with any coffee interest friend you have or on social media. You can use the buttons to the left (or at the bottom if you read this on a phone) to share. Thank you!

FAQ – How Coffee Prices Has Changed Over The Years