Lavazza’s vice chairman, Giuseppe Lavazza, said the price of coffee could increase by 25% over the coming year – and he does not see any sign of it letting up soon
UK coffee lovers have been warned by Lavazza that they won’t see a drop in the soaring prices of their favourite brew until at least mid-next year due to “very challenging headwinds” hitting the industry.
Giuseppe Lavazza, vice chairman of the Italian coffee giant, confessed “I was wrong” after his prediction last year that prices would start to fall this year proved incorrect. He cited poor harvests, especially in key production areas like Brazil and Vietnam, geopolitical conflict, and supply chain disruption as factors pushing prices to a 15-year high.
On Monday, prices hit an unprecedented high of $4,300 (£3,356) a tonne, with Mr Lavazza stating: “We have never seen such a spike in price as the trend right now.” Shipping costs alone have quadrupled due to disruption in the Suez Canal.
This has resulted in a 15% increase in the price of a 1kg bag of beans for UK consumers over the past year, a figure which Mr Lavazza warns could rise by another 20% to 25% over the next year. A flat white at Lavazza’s flagship cafe off Regent Street in central London now costs £3.50 to take away or £5.50 to sit in, reflecting the current cost pressures.
Mr Lavazza said: “We have faced very, very strong headwinds. I don’t see any reason why coffee prices will go down.” Despite this, the trend of UK consumers making fresh coffee at home, which started when the pandemic forced cafes to close, shows no signs of slowing down. People love it so much. And we think there’s an environmental element too, of people wanting to move away from using pods.”
The UK retail coffee market is worth £1.3billion, growing by 3.9% year on year, according to Nielsen figures, driven by price inflation of 3.8%. Lavazza has something to celebrate with their sales volumes spiking by 2.9% in 2023 compared to the previous year, which translates to 32 million more cups of Lavazza coffee being enjoyed compared to two years prior.
