Coffee Hit $4.41/lb

On October 17, 2025, coffee futures hit $396.90/lb—up 55.2% year-over-year.

Most roasters saw this headline, panicked for twelve seconds, then went back to their spreadsheets trying to figure out if they should raise prices this quarter or next.

Wrong question. Wrong focus. Wrong everything.

The C price isn't your problem. Your complete misunderstanding of what the C price actually represents? That's your problem.

And it's about to cost you your business.

The Number Everyone Quotes But Nobody Understands

Let me test your coffee education.

Quick: where does the $396.90/lb price come from?

If you said "the market," you're technically correct and practically useless.

The C price is determined by the Intercontinental Exchange (ICE) futures market. It's a bet. A financial instrument. A prediction of what arabica coffee will cost in the future based on supply and demand signals.

But here's what they don't teach you: the C price has almost nothing to do with the price you actually pay for coffee.

Let me prove it.

Three roasters, three continents, all bought Ethiopian Guji washed last month:

• Roaster A (Seattle): $6.80/lb

• Roaster B (Berlin): $7.20/lb

• Roaster C (Melbourne): $6.95/lb

Same origin. Same processing. Same quality score (86 points). Bought the same week. C price was $3.91/lb for all three.

So where did that extra $2.89-$3.29/lb come from?

Welcome to the part of the coffee trade nobody wants to explain because it makes them look bad.

The Great Coffee Price Lie

The C price is the baseline for commodity arabica. Brazilian naturals. Colombian washed. The stuff that goes into grocery store cans and mainstream blends.

It's not the price of specialty. It never was. It never will be.

But everyone—importers, exporters, traders, roasters—pretends the C price matters because it gives them cover to raise prices when they want and blame "the market."

Last month I consulted for a roaster in Lisbon who paid €6.80/kg for Colombian in January and €7.90/kg for the exact same lot in April.

"Matteo, the C price went up," his importer explained.

I pulled the contracts. The C price had increased $0.42/lb. That's €0.92/kg at prevailing exchange rates.

His price increased €1.10/kg.

I asked his importer to explain the difference. He couldn't. Not because he's dishonest. Because the entire pricing structure is built on opacity, fear, and the hope you won't do the math.

What Actually Determines What You Pay

Let me show you the real formula.

Your actual price per pound =
C price
+ Quality differential
+ Relationship premium/discount
+ Logistics markup
+ Trader margin
+ Importer margin
+ Currency fluctuation risk premium
+ Working capital cost
+ Insurance
+ Certification fees
+ Market panic surcharge (unofficial but very real)

That quality differential alone can be $0.50 to $4.00/lb depending on:

• Origin reputation

• Processing method

• Cup score

• Lot size

• Harvest timing

• Competition for that specific coffee

But here's where it gets fun: that differential isn't fixed. It floats. Based on how badly you want it, how many other buyers want it, and how good your relationship is with the seller.

Same coffee. Different prices. Every. Single. Time.

The Asia Factor Nobody's Discussing

While European roasters were complaining about C price increases, this happened:

Luckin Coffee locked in $1.38 billion worth of Brazilian beans over five years. China approved 183 Brazilian exporters under a new trade deal. Japanese chains signed multi-year contracts. South Korea's café boom absorbed premium arabica faster than supply could grow.

They're not watching the C price. They're securing supply. For years. At prices most European roasters would consider "expensive."

Because they understand something you don't: in a structural supply shortage, the C price is irrelevant. Access is everything.

The Vietnam Disaster That's Actually Much Worse

Everyone's focused on Brazil's 6.8% production drop.

Nobody's talking about Vietnam.

Vietnam's Robusta production fell 20% in the 2023/24 season. Exports dropped 10% for the second consecutive year. Prices surged 74% in Q1 2025.

"But Matteo, I don't buy Robusta. I'm specialty."

Yeah. About that.

Your espresso blend uses 20-30% Robusta, even if you call it "Brazilian pulped natural" on your menu. Your "house blend" that pays the rent? 40% Robusta.

When Robusta crashes, your margin crashes. When Robusta prices surge 74%, your cost structure explodes.

But you're watching arabica futures because that's what everyone talks about.

The Three Pricing Mistakes Killing Your Business

Mistake #1: Reactive Pricing

The C price hits $4/lb. You panic. You raise prices 15% across the board. Three months later, C price drops to $3.60. You...do nothing. Because dropping prices feels like losing.

Meanwhile, your competitor kept prices stable through the spike and is now stealing your customers while you look greedy.

Reactive pricing is losing pricing. Always.

Mistake #2: Uniform Pricing

You charge the same margin on every coffee. Whether it's a $6/lb commodity Colombian or a $12/lb Geisha.

Customers don't value coffees equally. They'll pay 3x for the right story. They'll pay 30% more for convenience. They'll pay 50% more for exclusivity.

But you charge the same margin because it's "fair" and "consistent."

Meanwhile, you're leaving €50,000 a year on the table.

Mistake #3: Cost-Plus Pricing

You calculate your costs. Add your target margin. Call it a day.

Except the market doesn't care about your costs. The market cares about your value.

If your coffee is worth €45/kg to your customers, charge €45/kg. Even if your cost is €25/kg.

If your coffee is only worth €30/kg to your customers, you can't charge €35/kg just because that's your cost plus margin.

The market determines price. You determine whether you can afford to play.

The Pricing Strategy That Actually Works

Forget the C Price. Lock in Your Supply.

This is the Asia playbook. And it's why they're winning.

Contact your three best suppliers. The ones you've worked with for years. The ones who actually care about maintaining relationships.

Offer them this: "I'll commit to X containers over the next 18 months at today's differential, regardless of where the C price goes."

They'll say yes. Because certainty is worth more than speculation in volatile markets.

You just locked in your cost structure for 18 months. While everyone else is panicking at every C price move, you're running a business based on predictability.

Segment Your Coffees. Price Your Value.

Create three tiers:

Tier 1: Your Bread and Butter (60% of volume)

• Solid quality, consistent supply

• Price: Market rate + 10%

• Strategy: Reliability beats heroics

Tier 2: Your Specialty Selection (30% of volume)

• Higher quality, compelling stories

• Price: Market rate + 40-60%

• Strategy: Story and experience justify premium

Tier 3: Your Cult Coffees (10% of volume)

• Ultra-premium, limited availability

• Price: Whatever the market will bear (often 2-3x Tier 1)

• Strategy: Scarcity and exclusivity drive demand

Your margin shouldn't be uniform. It should reflect value. Tier 3 might be 60% margin. Tier 1 might be 25%. Total blended margin? 40%.

That's how you build a sustainable business.

Communicate Like Your Customers Are Adults

When prices increase, tell them why. With specifics.

Bad: "Due to market conditions, we're raising prices 12%."

Good: "Brazil's drought reduced production 6.8%. Asian buyers locked in multi-year contracts. Our import costs increased 18%. We've absorbed what we can, but we need to pass 12% to you to maintain quality and supply security."

Your customers aren't idiots. They're reading the same headlines about coffee prices you are.

Treat them like partners in navigating volatility, not ATMs to extract more money from.

The Real Question You Should Be Asking

Not "What's the C price today?"

The question is: "If the C price goes to $6/lb next year, can my business survive?"

Run that scenario. Right now.

• Your costs increase 40%

• You raise prices 25% (because you can't pass through all of it)

• Volume drops 15% (because some customers can't absorb it)

Can you survive? Do you have enough margin? Enough cash reserves? Enough customer loyalty?

If the answer is no, you don't have a pricing problem. You have a business model problem.

What I'd Do If I Were You

This Week:

• Map out your actual landed costs for every coffee you buy

• Calculate your real margins (not your imaginary ones)

• Identify which coffees make money and which don't

This Month:

• Contact your top three suppliers

• Negotiate fixed-differential contracts for 18 months

• Lock in 60% of your anticipated volume

This Quarter:

• Restructure your pricing into tiers

• Kill the coffees that don't make money

• Launch one ultra-premium tier priced at 2-3x your standard offerings

This Year:

• Build 6 months of cash reserves

• Diversify your supply across 5+ origins

• Create a quarterly pricing review process

The Brutal Truth About Coffee Prices

The C price hit $4.41/lb. It might hit $6. It might hit $8.

And it doesn't matter.

Because the C price is just a number. A reference point. A financial instrument that has almost nothing to do with the actual transaction between you and your supplier.

What matters is:

• Your relationships with suppliers

• Your pricing strategy

• Your communication with customers

• Your business model resilience

The roasters going out of business aren't failing because the C price went up.

They're failing because they never understood what the C price actually represents. They never built real supplier relationships. They never implemented strategic pricing. They never had the margin buffer to absorb volatility.

The C price is just revealing their existing weaknesses. Faster.

So stop watching the C price like it's a stock ticker. And start building a business that can thrive regardless of whether coffee costs $2 or $20/lb.

Because the volatility isn't going away. The consolidation isn't stopping. The Asian buying power isn't decreasing.

The only question is: will you still be in business when the dust settles?

Your C price obsession won't determine that. Your business fundamentals will.

Choose wisely.