Brewing Up Value: Coffee Pricing In 2024

If your morning routine has felt a tad pricier lately, you're not imagining it. Recent data shows that coffee prices have risen modestly across the board, with year-over-year increases averaging between 2-4%. That PSL is going to cost you a bit more this fall. 

But these price shifts aren’t just about inflation, operators are also dealing with supply chain issues and more. They can also reflect exciting trends in the coffee shop industry and how consumer preferences are evolving. 

Toast analyzed transactions at restaurants on the Toast platform from July 1, 2023 to September 30, 2023 and compared them to transactions from July 1, 2024 to September 24, 2024, to determine the price of different café drinks. Let’s dive into the details of what’s brewing (pun intended) in your favorite coffee shop.

Quick insights:

• Cold brew had the most modest price increase out of the coffee drinks we looked at with only a 2.6% increase YOY ($5.19 to $5.33).

• Mocha had the largest price increase out of the coffee drinks we looked at with a 4.7% increase in price YOY ($5.58 to $5.85).

• The least expensive café beverage we analyzed was regular coffee which increased in price by 4.2% YOY from $3.14 to $3.27. 

• The most expensive café beverage we analyzed was frappes which increased in price by 4.5% YOY from $5.85 to $6.12. 

Coffee pricing year over year

A closer look at coffee prices 

According to third-quarter data from 2023 and 2024, almost every type of coffee drink has seen a slight price bump. But the increases are relatively mild, with most beverages showing a year-over-year rise around 4%. For example:

• Latte prices increased about 3.8% from $5.39 to $5.60

• Macchiato prices increase about 4.0% from $4.91 to $5.11

Even specialty drinks like Mocha climbed 4.7%. This showcases a growing demand for specialty, sweet café beverage options. Lattes (+3.8%), macchiatos (+4.0%), and cappuccinos (+3.5%) will likely continue to be popular despite modest price adjustments. Baristas understand the importance of these staples, often opting for smaller price hikes to keep loyal caffeine drinkers satisfied.

Cold brew saw the smallest increase at just 2.6%, which is rather surprising considering the cold brew market is expected to reach a value of $3751.76 million by 2032. In fact, according to SupplySide, since 2019, the number of people who said they drink cold brew on occasion increased by 73%, while those who said they drink cold brew regularly increased by 60%.

Keep it up, cold brew fanatics. You’re paying less than the frappe fans. 

Why the price hikes? 

The steady rise in coffee prices might feel as inevitable as your iced latte melting before you finish it, and inflation is the main culprit behind the surge. However, increasing costs of ingredients (like coffee beans, different types of milk, and sugar), higher wages for baristas, and supply chain challenges have likely all contributed to these shifts.

Still, coffee shops are handling the changes thoughtfully, balancing costs while keeping your favorite drinks within reach. Interestingly, the data suggests that even the simplest drinks, like regular coffee and decaf, have seen price increases of 4.2% and 4.1% respectively. This shows that even staples aren’t exempt from the broader industry changes. 

That's that me espresso  

While no one loves seeing prices go up, the increases we’re seeing in cafés are balanced, reflecting the industry’s resilience and consumer demand for quality. And let's face it: a few extra cents for your morning pick-me-up can be well worth it for that little boost of energy. 

Coffee shops will continue to innovate, not just in their offerings but in how they manage rising costs. With a world of flavors at your fingertips, whether you’re a mocha enthusiast or a “black coffee with nothing in it”, there’s something for everyone, without breaking the bank.

And if you're a coffee shop operator facing the need to raise prices, remember, transparency is key. Let your customers know why their favorite beverages cost a bit more. Open communication about the rising costs your shop faces will help build trust and ensure your customers feel they’re still getting their money’s worth.

In the end, it's about more than just the coffee. It's about the community you create, one cup at a time.

Hungry for more current trends? Check out the Q2 2024 Toast Restaurant Trends Report that examines popular lunch food trends, quick-service restaurant transactions in 20 U.S. cities, restaurant employee wages, and tipping data.

Methodology

Toast analyzed transactions at restaurants on the Toast platform from July 1, 2023 to September 30, 2023 and compared them to transactions from July 1, 2024 to September 24, 2024, to determine the price of drinks labeled “regular coffee”, “cold brew”, “latte”, “frapp”, “cappuccino”, “iced coffee”, “mocha”, “americano”, “macchiato”, and “decaf”. Toast used a cohort of same store restaurants on the platform since Q2 2023.