Do you really need that afternoon iced latte? The rising price of coffee might make you think twice about stopping by the café – and those prices are not expected to get any lower.
Consumers aren’t the only ones feeling the heat brought on by more expensive coffee as Orinda coffee shops are definitely having to deal with the increases. Geppetto’s owner Frank Leou has operated the long-time Orinda favorite cafe for a decade. Earlier this year, he had to raise the price of his coffee drinks.
Thankfully, “very few people comment on increased prices … they understand that prices are going up,” he said.
Geppetto customers may understand, but Leou said business has been unusually slow and he’s “hoping better weather will help bring in more customers.”
Down the street at Cafe Teatro, owner Joe Cho has also felt the impact of increased coffee costs.
“Coffee prices have been up almost every January for the past few years,” said Cho. “Suppliers send notes every year that they’re increasing costs little by little, about 2 to 5% each year.”
Cho said he doesn’t really pay attention to his suppliers’ reasons, assuming it’s the economy, but he does notice the impact on his margins.
“I don’t really read the reasons for the rise in costs,” he said. “Definitely everything’s going up. There’s an impact on the margin. Coffee has bigger margins than food margins.”
Cho, who has owned Cafe Teatro for 20 years, feels he’s “been pretty lucky, other businesses have said they’ve been slow.”
Cami Kutchai, a local teen coffee aficionado, noticed a big jump in coffee prices last year at the local coffee chains.
“I think the rising prices at coffee places is very frustrating,” Kutchai said, “especially for people who need caffeine on the daily and appreciate the experience of a cafe or coffee chain.”
A 5% increase every year for three years raises the price of a 16-ounce iced latte from its current $5.45 to about $6.00. This increase particularly impacts those of us with more restricted budgets, including area teens like Kutchai.
The big names in the business, Starbucks and Peet’s, have steadily raised their coffee drink prices, the most recent increases in 2024.
These price increases are expected to continue since the cost of wholesale Arabica coffee beans, the most commonly used by Orinda’s local cafés, has more than doubled in the past year.
Both Starbucks and Peet’s have cited unpredictable weather, lower arabica coffee bean yields, increasing global coffee demand and geopolitical uncertainty for this continual increase in the price of coffee.
Geppetto’s and Cafe Teatro will have to keep figuring out how to cope with these growing costs, whether through raising their prices or operating with even smaller margins. One thing’s certain — the beans that make that favorite coffee drink will keep getting more expensive.
Contributing Writer Michelle Jun can be reached at michellejun@gmail.com.
