Written by: Hudson Lehew, Kate Salinas
With lifted coffee tariffs prices lingering and unroasted coffee beans, also known as green coffee, prices increasing drastically, local shops are getting creative to maintain business without drastically raising prices.
Amanda Stewart, a 15-year industry veteran, currently works as a coffee educator at Dawson Taylor in the Lusk District. Stewart said coffee tariffs have had an “insane” impact on small businesses like Dawson Taylor in comparison to large corporations like Starbucks or Pete’s. Larger companies can afford to purchase coffee beans in bulk while they are still inexpensive.
“When the tariffs happen, [large coffee businesses] can just use up the coffee they bought a long time ago and hope the tariffs will go away,” said Stewart. “Whereas, if you’re a small roaster, you [can’t] buy as much coffee in advance.”
When smaller shops like Dawson Taylor inevitably run out of coffee beans, they cannot afford to wait out tariffs. Matt Bishop, CEO of Iron Mule, a major roastery for coffee shops in the Treasure Valley, echoed this sentiment.
“They [larger companies] can use financial tools, like buying futures and doing things to try to smooth out their cost of coffee, so they have an advantage over us when coffee prices are erratic,” said Bishop.
Stewart stated it’s not just coffee bean tariffs that affect their shop, but also tariffs on supplies such as aluminum, coffee pots and filters.
“We truly thought, ‘this can’t happen, or we’ll go out of business,’” Stewart said regarding the tariffs.
Stewart explained that Dawson Taylor sources coffee beans from all over the world, including Myanmar, Ethiopia, Central America, Guatemala, Costa Rica, Brazil and South America.
Steward noted several coffee shops faced similar situations of ordering items and tariffs being announced afterwards, resulting in an inability to avoid additional charges.
“Things have been really unpredictable,” said Stewart, who explained that tariffs were put on China after they had already ordered coffee and supplies.
While Dawson Taylor has been forced to raise prices, its general manager has worked hard to minimize how much prices increase. Steward noted the biggest blow to Dawson Taylor is having to consider changing their espresso recipe. While there is an option to switch to a Brazilian coffee with a lower tariff, Stewart said customers expect the coffee to taste a certain way and switching providers could change that.
“It’s kind of what built this company … thinking of making changes to classic things is a big deal.”
“We specifically are having to raise prices for coffee because most of our coffee beans are a lot more expensive,” added Java manager Alyssa Grinwas. “We do our best. Usually 90% of people understand, 10% of people are upset.”
Prices are also increasing at Common Ground Coffee on items like coffee bags and Americanos, stated co-owner Laurie Pearman.
“Our goal is to be a neighborhood coffee shop that’s affordable, and we already feel that with the cost of all of our ingredients, our menu pricing is about as high as we want it to be for our customer base,” Pearman said.
Pearman and her partner, Sarah Keck, have been keeping a close eye on the coffee tariffs since they first increased in April. Pearman said to save money, her business is trying to reduce waste.
“[We’re] trying to be really mindful of what we order and making sure things don’t expire,” said Pearman. “We have very little waste, [we’re] making sure our team is aware of how much every little bit matters.”
Pearman noted that Iron Mule currently acts as a “buffer” for Common Ground Coffee, helping minimize the damage caused by coffee tariffs and green coffee prices by taking financial risks, such as buying green coffee in bulk.
Though the Trump Administration lifted coffee tariffs on November 14, Bishop explained there are still lingering concerns for the future.
“We’re going to still see a lagging effect of that issue, just because those importers that purchase coffee under tariffs are going to want to recoup that cost,” said Bishop. “’I’m hopeful, but I think it’s still going to be months before we see the impact of [the lift] hit us.”
Alongside lowered tariffs not lowering prices, the price of green coffee has also gone up drastically in the past year. Green coffee prices have increased worldwide due to extreme weather conditions affecting major producers, including Brazil and Vietnam.
“Green coffee in 2019 was about $1 a pound. Now it’s over $4 a pound. So there’s been a huge increase in that,” Stewart said.
Bishop said Iron Mule salaries have had to be “significantly” reduced as a result. Despite rising prices for green coffee, Bishop’s company is actively trying to avoid continually raising their prices.
“These stores really are margin-driven,” said Bishop. “If we raise our price considerably, they’re simply going to just cut us from the shelf and put in more Starbucks.”
