By Inti Pacheco | Photography and Video by David Robert Elliot for WSJ
Fans of Reverie Roasters' Boneshaker Espresso blend are familiar with the sticker shock that has hit coffee prices nationwide.
For years, a 12-ounce bag of the bestseller cost $15 at its Kansas roastery and two coffee shops. As of last spring, it is $17. And Reverie's owner, Andrew Gough, is raising the price again next month, to $18.
That reflects just a share of the often-hidden factors driving up the cost of doing business for artisanal purveyors like Reverie. Tariffs inflated his expenses, but so have crop failures, higher rents and rising labor costs.
Now, after commodity coffee prices dipped in recent months, concerns about the Iran war and stepped-up trading in coffee futures markets are driving them up again.
To drill down into why retail coffee prices have risen -- and keep going up -- The Wall Street Journal took a deep dive into Reverie Roasters' expenses. Gough says he has absorbed roughly half the cost surge because passing it to consumers is risky, too.
"You always worry that if you raise your prices you are going to lose a customer," Gough said.
Gough founded Reverie Roasters in Wichita, Kan., in 2013. In addition to its shop and online sales, it sells coffee to about 160 wholesale clients like churches, offices, schools and grocery stores. For more than decade, he didn't have to think much about the price of the coffee.
But when it came time to order beans early last year, he got a shock: The unroasted green coffee Reverie buys had jumped to $4.30 a pound from $2.41 just a few months before. That cost includes the price of the beans themselves, plus freight, insurance and any duties.
That alone would have meant a nearly $200,000 cost increase for the roughly 95,000 pounds of coffee Reverie roasts annually. "It kind of freaked us out," Gough said.
Behind the jump: Extreme weather, including droughts in Brazil and Vietnam, had hit coffee crops. And even before any tariff increases, hedge-fund bets anticipating the levies were pushing commodity prices higher.
Then in July, President Trump slapped an additional 40% tariff on goods from Brazil, which produces more than a third of the world's coffee , citing legal action against its former President Jair Bolsonaro and U.S. tech firms as justification. Altogether, Gough says, he paid a little over $14,000 in tariffs in 2025.
Across the country, retail coffee prices soared as many coffee sellers passed on costs to customers. Coffee outpaced other grocery items in the inflation-tracking consumer-price index last year.
In hindsight, Gough said, he didn't raise prices as much or as fast as he should have. He opened an account with the aim of stashing away $50,000 to eventually buy futures contracts and lock in cheaper, longer-term prices, as bigger roasters do. But the account now has $5.02.
As for his cash flow? "It's been spiraling downwards every week," Gough said.
Coffee commodity prices began sliding again in November after Trump pulled back the 40% tariff on Brazilian food items, including coffee, to address affordability issues. But Reverie's green-coffee costs have risen even higher than they were in the early fall.
Small roasters don't have the pricing power to buy coffee in massive volumes like the Starbucks of the world. Gough said he has to buy coffee at the price available to him in the moment, and Reverie isn't big enough to hire a dedicated buyer who can scour for deals.
Another reason commodity prices are surging again? The same speculative trading that contributed to price surges early last year is ramping up again.
Back then, traders piled into coffee contracts -- betting the price would go up -- after an Agriculture Department report warned of a coffee-supply shortage. By February 2025, hedge funds controlled about a third of all coffee contracts -- a $10.4 billion bet that helped fuel a surge in the C-price.
As a result, commodity prices have "just been roller coaster stupid," said Emory University professor Peter Roberts, who developed the Specialty Coffee Retail Price Index. The index tracks prices for roasted coffee sold by about 60 companies in North America, including Starbucks, Stumptown and Peet's. "Hedge funds are just liking the gamed uncertainty."
Hedge funds sold off a big chunk of their positions early in 2026 after Brazilian authorities said they expected a record year in coffee production. Now, surging fuel and freight costs caused by the closure of the Strait of Hormuz have triggered a new round of coffee-contract purchases and rise in commodity coffee prices.
Gough says those fluctuations are too much to keep on top of when he's running every aspect of Reverie's operations.
"There's too many variables for us to follow," he said. "I've got to fix the toilet. I've got to do the broken doorknob."
Write to Inti Pacheco at inti.pacheco@wsj.com
(END) Dow Jones Newswires
March 29, 2026 12:00 ET (16:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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