Why Coffee Bean Prices Fell But Starbucks May Still Raise Them

If you’ve noticed coffee prices holding steady or even climbing at your local café, despite news of falling coffee bean costs, you’re not alone. With global Arabica coffee prices down nearly a third this year, many coffee drinkers are left wondering: shouldn’t my cup cost less?

The short answer: no. Even though wholesale Arabica coffee bean prices have dropped 29% in 2023, and futures contracts hit a 17-year low, Starbucks and most other coffee sellers are unlikely to lower retail prices—and may even raise them.

Arabica Coffee Prices Hit a 17-Year Low

According to a report from The Wall Street Journal, ICE Futures U.S. reported that December-delivery Arabica coffee futures fell nearly 2% to $1.1050 per pound. That price marked the lowest closing level for the contract since September 14, 2006. Over the course of 2023, Arabica coffee bean prices have fallen by approximately 29%, driven largely by strong supplies from Colombia and Central American producing countries.

Why Coffee Prices Rarely Go Down

In the coffee industry, price hikes are common—but price cuts are rare. Historically, major coffee chains adjust prices upwards far more frequently than they reduce them. For example, in June 2013, Starbucks raised the price of about one-third of its U.S. drinks by an average of 1%. Back in 2012, the company increased prices for many drinks in its Northeastern and Southern U.S. stores—covering cities like New York, Boston, Atlanta, and Dallas—by around 1%. Even earlier, in 2011, Starbucks bumped up the price of its packaged coffee by 17%.

What Happened In 2023?

Despite the significant drop in wholesale coffee bean costs throughout 2023, Starbucks did not lower prices in its stores. However, in May 2023, the company did announce a price reduction of 10% or more on 12-ounce bags of Starbucks-branded coffee and Seattle’s Best Coffee sold in food retail stores. That discount applied only to packaged coffee on shelves—not to drinks served in cafés.

Will Starbucks Lower Café Prices?

When asked if Starbucks plans to lower prices in its cafes due to falling bean costs, company spokesperson Zack Hudson stated that the company does not discuss future pricing plans for competitive reasons. He also pointed to factors beyond price, such as the overall café experience—including music, ambiance, and free Wi-Fi—that keep customers returning, regardless of small shifts in commodity costs.

Frequently Asked Questions

Did coffee bean prices really fall in 2023?

Yes. According to the ICE Futures U.S. exchange, Arabica coffee bean prices dropped approximately 29% in 2023, with December futures falling to $1.1050 per pound—the lowest since September 14, 2006.

Why haven’t coffee shop prices gone down if bean prices fell?

Retail coffee prices are influenced by more than just the cost of green beans. Factors such as rent, labor, equipment, and brand positioning play major roles. Additionally, coffee companies rarely reduce consumer prices even when input costs drop, as seen with Starbucks historically.

Did Starbucks lower any prices in 2023?

Yes. In May 2023, Starbucks reduced the retail price of 12-ounce bags of its packaged coffee and Seattle’s Best Coffee sold in food stores by 10% or more. This price cut did not apply to drinks in its cafés.

Why might Starbucks still raise prices despite cheaper beans?

Starbucks has a history of raising prices for drinks and packaged coffee based on market conditions, competition, and customer experience factors. The company has not confirmed any upcoming price hikes, but has not ruled them out either, especially given prior increases in 2011, 2012, and 2013.

Does a drop in wholesale prices mean my cup of coffee will be cheaper?

Not necessarily. Wholesale prices are only one part of the cost structure for cafés. Most coffee retailers, including Starbucks, have not passed on falling bean prices to consumers and may maintain or even increase prices for other reasons.

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