Why Are Coffee Prices So High in Canada?

If your day isn’t complete without at least one cup of coffee, you’re far from alone. In July 2023 Canada imported more than 15 million kilograms of green coffee beans and another 5 million kilograms of roasted coffee. According to the Coffee Association of Canada, about 71% of Canadians drink coffee every day. Those figures help explain why coffee remains a staple in households across the country.

But like nearly every grocery item, coffee has been affected by inflation. Store-bought ground and whole-bean coffee rose more than 20% from June 2021 to June 2022, and increased another 9.2% between August 2022 and August 2023, according to Statistics Canada. At cafés, the average price of a latte has climbed past $5 in recent data from Square, although a simple drip coffee can still often be had for under $3.

Coffee’s price reflects a long chain of costs: farming, labour, inputs like fertilizer, harvesting, shipping, roasting, packaging and retail markups, plus the overhead of cafés such as rent, equipment, wages and utilities. Below we break down the main factors that affect coffee prices and share practical tips for finding better value without giving up your daily cup.

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What factors affect the price of coffee?

Coffee is both an agricultural product and a processed food. That combination means its price includes everything from farm inputs and manual harvesting to international shipping, roasting, packaging and retail margins. If you buy coffee at a café, the bill also reflects labour, rent, electricity, equipment, disposable cups and any milk or alternative milks used in your drink.

On the production side, coffee grows only in certain climates, mostly in countries like Brazil, Colombia, Honduras and Guatemala—places that supply a large share of Canada’s imports. Local conditions there affect prices: labour disputes, minimum wage changes or higher harvesting costs directly increase the price of raw beans. Pests and plant diseases are another risk that can reduce yields and raise costs.

Climate change is becoming an especially large factor. Coffee plants need fairly specific temperature and rainfall patterns to thrive. Rising temperatures, shifting precipitation and more frequent extreme weather are reducing the total area suitable for coffee cultivation and damaging crop yields. Some scientific studies estimate that the land suitable for coffee could shrink substantially by mid-century, and many farmers are already experiencing shorter growing seasons and unpredictable harvests.

After harvest, beans must be moved across long distances. Ocean freight, port handling and domestic trucking all add to the supply cost; freight rates remain historically elevated compared with pre-pandemic levels. Once beans reach Canada, roasting, packaging and retail distribution add further expenses. On the retail side, higher wages, rising rent, and increased prices for inputs such as dairy or oat milk (the latter sometimes affected by poor growing seasons and climate impacts) also push café prices higher.

Where can you find a good deal on coffee?

Making coffee at home is almost always less expensive than buying it at a café. When you buy from a shop you’re paying for the labour, overhead and the experience—the seating, atmosphere and convenience—not just the brewed beverage. If you enjoy café visits, they’re worth it as occasional treats, but frequent takeout cups add up: spending $10 a day on coffee becomes roughly $300 a month.

To reduce the cost without giving up coffee, try these practical tips:

• Make coffee at home more often. A good grinder and fresh beans will save money over time and improve taste.
• Avoid waste. Brew only what you’ll drink. Stale or wasted coffee is wasted money.
• Buy in bulk when there are sales or use subscription options for beans you like to lock in better prices.
• Compare brands and roasters. Store brands or lesser-known roasters can deliver good flavour at lower cost.
• At cafés, choose simpler drinks, smaller sizes or shops with lower prices to cut per-visit spending.
• Use loyalty programs, coupons or cashback credit cards to offset part of the cost if you buy out.

Small changes in daily habits can lead to meaningful savings without forcing you to give up coffee entirely. Whether your priority is taste, convenience or cost, being aware of what drives coffee prices helps you make choices that support both your budget and your enjoyment.

More on smart spending:

• Canadian consumer debt: How we’re paying for our credit cards
• How ADHD can affect your finances
• Earning, saving and spending money in Canada: A guide for new immigrants
• Making sense of the Bank of Canada interest rate cut on June 5, 2024