Prepare to pay more for your flat white as Ireland's coffee producers face a perfect storm

Coffee producers in Ireland are facing a perfect storm, says Rob Horgan of Velo Coffee Roasters, now the country's largest independent producer on supermarket shelves. 

"Demand for premium coffee has been increasing significantly over the last few years, particularly in China, with the likes of Luckin Coffee. That demand coincides with a couple of poor harvests and is leading to this perfect storm for coffee," he said.

Tony Speight runs West Cork Coffee, based in Innishannon in Co Cork, and also has a coffee shop, WCC Brew, in Bandon. 

"I think we've seen our costs go up by more than 60% over the last six months," he said. 

"We had to increase our prices at the start of 2025. We couldn't sustain it any longer. Our business is seven years old and I've never seen an increase like this in the price of green beans in that time. The market is telling everyone there is going to be a shortage for the next 12 months and maybe even 24 months."

"I would say this is definitely the year where we will see shops having to increase their prices. You're probably seeing it already in places like Cork City. Your flat white cost significantly more to make in the last year."

Coffee is traded as a commodity, and it has hit record prices. Arabica coffee, which is the most popular, went up by 70% in 2024. This year it has hit new record prices after increasing a further 20%. Meanwhile Robusta, the next most popular bean and favoured for use in many instant coffees, went up 72% in 2024.

"US traders got into cocoa a couple of years ago, then robusta, and then arabica," said Velo owner Mr Horgan, whose business employs 18 people in Mayfield in Cork City, and sells coffee in Ireland, the UK, and with speciality customers as far away as Dubai. Velo offers both pod and ground coffee.

"The New York-trade prices are for C-grade coffee, which is essentially lower commercial coffee. What we roast is speciality coffee — the top 15% of the harvest. But what is happening now is that farmers, rather than grading coffee, they can effectively dump coffee onto the C market at a premium price.

"There's a feeling with the coffee market that there's still about 60c in the price being played with by US traders. Those traders need to leave the market for prices to improve. They make it a bouncing market. But they are near enough to exhausting it."

Last week, brokerage Marex reported that global coffee supplies are projected to rise slightly in the new season (2025/26), while there are some predictions of a better crop in Brazil, the world's largest producer, in 2026. 

All the while, global consumption is still projected to grow. In Ireland, the increase in production and a sharp decrease in price is badly needed.

"The coffee shops are being hit by high energy prices, minimum wage increases, additional holidays, all factors making it difficult," said Mr Horgan. "Coffee is an affordable luxury, but it's important that it stays affordable."