The chairman of Lavazza has warned that Donald’s Trump’s tariffs could push coffee prices higher - as the US President threatens the world’s biggest producer with a 50% export tax.
Giuseppe Lavazza said the coffee industry had faced “exceptional volatility”, with Arabica coffee prices increasing by 70% in 2024 and another 20% in the first two months of 2025 to reach a record high of 4.20 US dollars per pound on February 10.
Lavazza said the price volatility was driven by a “perfect storm” of droughts in Brazil and Vietnam significantly impacting coffee production and ongoing geopolitical disruption increasing transportation costs and delivery times.
And warned that European Union regulations and tariffs threaten to cause further instability in the market, which could eventually push prices higher.
He said Lavazza was preparing to “accelerate” a new production facility in the United States as the company’s develops its first US roasting plant near Philadelphia.
Mt Lavazza told UK journalists on Wednesday: “Regarding tariffs, 10% is fine, but if we move to the United States, the problem is not to have tariffs between America and Europe. The problem is to have tariffs between the US and Brazil, the US and Vietnam, the US and all the countries where the coffee is produced. If the tariffs, for example, on Brazil is 40%, Vietnam 30%... the final outcome will be a rise in the cost of coffee.”
Trump has said is planning to impose a 50% tariff on goods made in Brazil, accusing the South American nation conducting a “witch hunt” against former far-right president Jair Bolsonaro, who is facing prosecution over his alleged role in a plot to overturn the 2022 election.
Between early 2023 and the end of 2024, Arabica prices increased by 190%, while cheaper Robusta beans increased by 263% over the same period.
However Mr Lavazza said UK consumers may have seen prices peak following a 20% increase in the cost of beans at the supermarket last year.
A flat white at the firm’s flagship cafe off Regent Street in central London is holding steady at an albeit inflated £4 to take away or £5.50 to have in, reflecting current costs.
Mr Lavazza said: “We think that the market reached a peak at the beginning of this year.”
High prices have not dented the “strong trend” of UK consumers turning to beans to make fresh coffee at home, which began when the pandemic closed cafes but has showed no sign of slowing even now.
The UK retail coffee market, valued at £1.7 billion, has seen at-home consumption rise by 5.7% on the year to date as consumers shift from cafe to kitchen, Lavazza said.
According to its figures, UK households drink 13 million cups of Lavazza coffee each week and use 1.4 million Lavazza capsules, leading to £10 million in sales for the brand’s best-selling Qualita Rossa beans over the year to May.
Mr Lavazza said its new Tabli home coffee system, which uses coffee tabs that are individually completely free of packaging, will launch in the UK next year.
Designed to address concerns over the sustainability of aluminium and plastic packaging, Mr Lavazza described the new system as “the best Lavazza has designed in history”.
“I call it a small miracle,” he added.
Lavazza said UK sales were up 5.4% to £123 million compared with the year before.
