Bay Area Coffee Roasters Fear Tariff Price Spike

A cup of coffee at Bay Area cafés will cost you a little more these days.

Tariffs, a form of tax, are usually imposed to encourage or protect internal production of in-demand goods. But the continental United States does not have any regions where quality coffee can be grown in enough mass to satisfy domestic demand. Just 1% of the coffee consumed in the U.S. is grown domestically, in Hawaii and Puerto Rico, according to the National Coffee Association.

With President Trump’s on-again, off-again tariffs are scheduled to return to higher rates in July after a 90-day pause, San Francisco Chronicle writer Mario Cortez talked to Luigi Di Ruocco bout how Mr. Espresso was addressing rising coffee prices.

“Transparency is very important,” co-owner Luigi Di Ruocco said. Mr. Espresso told its wholesale customers in March it was raising its prices between 9% and 11% to offset the high prices of coffees. “We have to keep customers posted as to what’s going on and how it will affect them. They have to plan accordingly.”

Mr. Espresso had already raised wholesale coffee prices by 40 cents per pound last September as commodity prices began to spike. “Tariffs have been more of a recent story, but they do add an extra degree of uncertainty to a pretty volatile green coffee market,” Di Ruocco said, referring to beans that haven’t yet been roasted.

Di Ruocco said he is working to keep prices approachable at Mr. Espresso’s downtown Oakland coffee bar. The company buys just enough coffee to get through a few months of wholesale and café operations instead of purchasing a long-term contract, which secures a supply for a determined time period, such as six months or a year. The buying strategy is to avoid high market prices and wait for prices to come down. “Nobody wants to lock in prices at the peak,” he said.

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