Key takeaways

• Roasted coffee prices have increased 18.6% in the past three years, according to the Consumer Price Index (CPI)
• Empower data reveals that Americans spend an average of $30.27 a month on their caffeine fix, visiting one of the nation’s top 3 coffee retailers three times a month
• 6 in 10 Americans are opting for specialty coffee drinks, paying $5.14 for cold brew and $5.46 for lattes, on average
• Millennials aren’t willing to part with their morning pick-me-up: 62% are willing to spend $7 on a daily coffee because of the joy it brings

If that first sip of coffee is what gets you out of bed in the morning, you’ve probably noticed that the cost of your caffeine fix is higher than it used to be. On average, coffee prices across the United States have increased by approximately 19% from 2021 to 2024 – a bitter side effect of inflation.¹

Nowadays, the cost of a simple latte will run you $5.46 on average, and that’s before your favorite syrup, milk of choice, tax, and tip.²

The cost of caffeine cravings

Empower Personal Dashboard^TM data shows coffee-lovers spent $30.27 a month on average in the first six months of 2024, up 9% from 2021. Personal dashboard users spent over $17 per transaction at Starbucks, $10.36 at Dunkin’, and $8.14 at Tim Hortons.

In June, the price of roasted coffee ticked up 0.5% according to the Consumer Price Index – but some states are feeling the pinch more than others.³

The national average for a cup of Joe comes in at $3.08 for a cup of regular coffee, $5.14 for cold brew, and $5.46 for lattes.⁴ Hawaii had the most expensive coffee in the country, with an average price of $4.89 (59% higher than the national average). California was the second-most expensive, at $3.88, (26% higher than the national average). Nebraska is the state with the best bargain to sip, at $2.12 a cup.

Some good news for cold brew lovers — the jumps in coffee prices over the last year seem to mostly affect lattes and black coffees.⁵

Higher prices are brewing

The costly cup of coffee is a culmination of various inflationary pressures, from surging bean prices and supply chain disruptions to higher operating expenses and rising cost of other ingredients.⁶ Consumers hoping for a return to more affordable prices may be disappointed: Some coffee makers say they will have to pass on the extra cost to consumers.⁷

Both the high-end arabica beans and the more budget-friendly robusta variety have spiked in price due to supply chain shortages. Arabica coffee futures are up roughly 22% year to date due to supply chain shortages, while robusta coffee futures, a cheaper alternative, are up 65% over the past 12 months.^8,9

And the shortage will likely keep driving prices higher into 2025, with some roasters paying over $1,000 higher than futures prices for beans grown in Vietnam.¹⁰

The milk is extra

While the cost of coffee beans is a significant driver of price increases, other ingredients, such as milk and sugar have seen price hikes. Over the past three years, milk prices have increased 12.8%, while sugar and sugar alternatives have surged 29.8%.¹¹

Consumer preferences have changed, too. Americans are favoring more artisanal and specialty coffee drinks – think pumpkin spiced lattes, strawberry cold foam iced coffees, and the iced shaken espresso. The National Coffee Association found nearly 6 in 10  Americans indulged in a specialty beverage, a 4% increase from 2023 that was primarily fueled by espresso-based drinks.¹²

Wake up and smell the coffee

With 60% of Americans reaching for a cup of Joe daily and 35% enjoying the drink outside the home at least four times a week, pricing pressures may be felt far and wide.¹³

Will consumers keep paying? For one cohort, it’s likely. Empower research reveals 62% of millennials are willing to spend $7 on a daily coffee because of the joy it brings.

Some people might not give up their caffeine fix, but more could opt to brew at home if buying coffee out gets too expensive. Grocery-store sales volumes of espresso and coffee concentrate have jumped sharply in the US, suggesting some buyers are trying to recreate their favorite coffee treats at home.¹⁴