Coffee Prices Surge Amid U.S. Tariffs and Premium Demand in August 2025

Vietnam Coffee Prices Rise Due to New VAT and Global Demand

Vietnam’s coffee sector experienced significant price increases in August 2025 following the introduction of a 5% Value Added Tax (VAT) on coffee beans effective July 1. This new tax has raised domestic prices, sparking controversy among exporters who seek exemption to maintain international competitiveness. Despite this, Vietnam’s coffee exports performed strongly in the first half of 2025, reaching $5.4 billion, boosted by record global prices and growing demand in markets like Spain and Algeria. Brazil also reported record export revenues amid production challenges caused by drought and frost, while the U.S. imposed a 50% tariff on Brazilian coffee imports, influencing global market dynamics (ChemAnalyst, 30 Aug 2025).

Keurig Dr Pepper Completes $18 Billion Acquisition of JDE Peet’s

Keurig Dr Pepper finalized an $18 billion acquisition of JDE Peet’s, creating a global coffee company with $16 billion in worldwide sales. The new entity aims for $400 million in annual cost savings and positions itself as a strong competitor to Nestlé. This merger is expected to enhance supply chain negotiations and help manage commodity price volatility, although immediate consumer price relief is unlikely given current global coffee price pressures (Perfect Daily Grind, 29 Aug 2025; MarketWatch, 27 Aug 2025).

Coca-Cola Explores Sale of Costa Coffee Amid Strategic Review

Coca-Cola is actively reviewing options for its Costa Coffee brand, engaging with potential buyers including private equity firms. The sale process is underway with indicative offers expected in early autumn. Costa Coffee operates in around 50 countries and was acquired by Coca-Cola in 2018 for over $5 billion (Perfect Daily Grind, 29 Aug 2025).

Starbucks Seeks Partners for China Unit to Stem Market Share Losses

Starbucks has invited bids for its China business, with shortlisted groups such as Carlyle and Hillhouse invited to submit offers within two weeks. The China unit is valued at approximately $10 billion, and the move aims to find a partner to counteract significant market share declines in the region (Perfect Daily Grind, 29 Aug 2025).

Global Coffee Prices Reach Record Highs Amid Tariffs and Premium Demand

Global coffee prices surged to approximately $393 per pound on August 29, 2025, marking a 59% increase year-over-year and a 34% rise over the past month. The U.S. 50% tariff on Brazilian coffee imports has tightened supply and increased volatility, despite Brazil’s strong harvest progress. Arabica stocks are at a 14.5-month low, while Robusta inventories remain high, exerting downward pressure on Robusta prices. Meanwhile, consumer demand for premium coffee beans peaked in August, driven by seasonal factors and preferences for artisanal products. Sales of electric coffee grinders and combo machines peaked in July but showed some cooling in August due to concerns over grind consistency and cleaning (Trading Economics, 29 Aug 2025; CoffeeBI, 25 Aug 2025).

Tariffs and Inflation Pressure Coffee Supply Chain and Prices

The average retail price of roasted coffee in the U.S. has risen 14.8% since last July, with new tariffs significantly disrupting the supply chain. Brazil’s 50% tariff on coffee imports, effective August 6, has particularly impacted high-quality arabica bean prices, causing hesitation among importers and roasters to purchase large volumes. Industry insiders expect these tariffs to further increase coffee prices for consumers in the near term (CPA Practice Advisor, 29 Aug 2025).