The best way to plan for the future is to look to the past to glean emerging patterns. This article provides a summary of the top trends shaping the coffee industry through 2024, to help you strategize for 2025.
In the past, the specialty coffee industry – particularly roasters, importers and exporters – was thriving thanks to low coffee prices, low interest rates and a motivated workforce . But now, it faces a more challenging environment.
Relying on passion alone in management and simple strategies in purchasing is no longer enough, as the market faces new pressures.
Specialty Coffee Crisis
Henry Wilson , founder of the Producers and Roasters Forum and Coffee Intelligence, says:
“The specialty coffee sector is experiencing a crisis of sorts, which is no longer limited to producers only, but is also affecting roasters and exporters.”
The past decade has seen major changes that have reshaped the industry, including:
- Coffee prices have risen dramatically, with Arabica now selling for around $3.50 per pound .
- Interest rates have increased, leading to higher operating costs.
- There is a glut of roasters , making competition more fierce.
Employees are no longer willing to work for modest salaries simply because they are passionate about the industry, but are demanding higher salaries and clear career paths . Investors who once accepted slow returns are now demanding profits, forcing business owners to focus on operational efficiency rather than idealism and commercial romance .
Roasters' behavior has changed.
With this change, specialty roasters began buying cheaper types of coffee, diversifying blends, and looking to sources from less expensive countries .
But this trend has had a negative impact on exporters, especially in high-cost regions such as Colombia , where they face increasing challenges with buyers focused on cutting costs.
The division between roasters and exporters
In the past, exporters relied on selling high-quality coffee to small, specialized roasters . As these roasters grew, exporters also expanded their operations, investing in infrastructure, sales teams, and increased market penetration .
But there is a recurring pattern that is causing problems for exporters :
- As roasters grow, they shift from a focus on quality to a focus on maximizing economic value .
- Roasters begin to demand cheaper prices, financial services, and less interest in long-term partnerships .
- Exporters find themselves stuck with high operating costs and inflexible structures, while gradually losing business .
Moreover, competition among exporters has increased, with new players entering the market, offering similar services at more competitive prices . As a result, exporters have started targeting less saturated markets such as Eastern Europe and the GCC, rather than highly competitive markets such as the US and Australia .
Henry says:
“Some exporters try to retain customers by lowering margins or entering the commercial coffee market, but these strategies often negatively impact their profitability.”
Roasters Transformation in 2025
2025 will continue to bring new challenges for roasters, as the sector becomes more mature and economically stable .
Henry says:
“Many roasters are abandoning models based on long-term relationships in favor of purchasing strategies focused on economic efficiency.”
This means:
- Reduce focus on luxury microlots .
- Increased use of less expensive mixes .
- Look for sources from cheaper countries like Brazil and Vietnam .
Roasters are no longer content with breaking even ; they are now focused on achieving sustainable profits and long-term growth .
Impact of change on recruitment and management
- Labor costs have risen, as employees demand higher salaries and financial incentives.
- It is no longer possible to rely on hiring entry-level employees with a passion for the industry , but rather the need for experienced account managers who can deliver quick results .
- Employees who are unable to obtain competitive salaries leave the coffee sector for other, more profitable industries .
Leadership style has also changed, with passionate, inspirational business owners being replaced by more pragmatic, business-focused managers .
The result?
The market has become more competitive , with roasters having to find a balance between cost and quality , which directly impacts exporters who depend on their orders.
How can exporters stay in the market in 2025?
Specialized exporters face significant challenges, but they can survive and adapt to changes by adopting new strategies, such as:
- Avoid over-expansion.
- Instead of growing fast, stay small, flexible, and profitable .
- Targeting niche markets and customers who value quality and expertise.
- Understanding the Customer Lifecycle
- Exporters must anticipate when roasters will grow and change their purchasing strategies .
- Building relationships with emerging roasters , while continuing to provide limited services to larger clients.
- Adopt more aggressive sales strategies.
- Looking for new markets such as Eastern Europe and the Gulf where competition is less and opportunities are greater.
- Diversify your customer base to reduce the risk of losing key accounts.
- Investing in innovation
- Develop digital tools to track coffee and enhance transparency .
- Providing value added services such as roasting or retail.
- Diversify income sources carefully to avoid resource depletion.
A look at the future of the coffee industry
By 2025, the coffee industry will reflect a decade of change , as specialty coffee transforms from a passion-driven industry to a more mature and competitive sector .
This is not the first time the industry has faced challenges such as inflation, rising prices, and changing consumer demand .
But future success depends on:
- Balancing quality and cost.
- Maintaining business relationships while diversifying customer base.
- Innovate sustainably without losing core identity.
Conclusion
Who will thrive in 2025?
Those who can adapt to change, embrace new realities, and find innovative solutions .
Henry says:
“The coffee industry in 2025 will not be a reflection of a golden past, but will be shaped by our ability to adapt to change.”