Coffee’s new world order: Part one

Climate change, soaring demand, emerging markets and radical new technologies are sending shockwaves through the global coffee industry. As coffee businesses across the supply chain confront new trading realities and disruptive market forces, a new world order is emerging that will fundamentally reshape the business of coffee and hospitality. In the first of a two-part series, Tobias Pearce explores the causes behind record-high coffee prices, how major shifts in global trade are sweeping away long-held industry norms, and why tough decisions and new approaches are required across the global supply chain

Ask the global coffee industry to sum up 2025 so far and you’ll hear the word ‘uncertainty.’ Coffee businesses across the global supply chain are navigating a new era of complexity shaped by supply chain constraints, higher prices and market volatility that are testing the resolve of farmers, traders, roasters, operators and consumers alike. 

Heatwaves and erratic rainfall in Brazil, the world’s largest coffee producer, pushed the arabica C price to a record $4.41/lb in February 2025, and it has remained stubbornly high ever since. Even Vietnam’s hardier robusta crop has been hit by prolonged droughts, with the key ingredient for instant coffee and commodity blends reaching a 45-year high in mid-2024. 

Like many commodities that rely on specific growing conditions and highly interconnected supply chains, volatility has been part of the coffee industry for years. But with global demand for coffee showing no signs of slowing, the coffee industry is facing a sustained supply shortfall that is shaking the foundations of business models everywhere. 

Spot the difference 

For decades, coffee businesses worked on the assumption that futures prices are higher than spot prices, a dynamic that encouraged traders to maintain healthy inventories and enabled buyers to hedge against price volatility.