Coffee’s Grip on America

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American personal-finance gurus love to rail against the habit of spending money on coffee: The finance personality Suze Orman once compared buying coffee outside the house to “peeing $1 million down the drain.” But this criticism hasn’t curbed Americans’ love of ordering coffee. Neither has a yearslong stretch of brutal inflation. Through it all, Americans have kept purchasing their lattes and Americanos and drips, their cold foams and pumps of flavor and alternative milks.

Most American adults drink coffee regularly. The beverage is inescapable in America in part because it has enabled the long work hours that contribute to America’s culture of productivity. As Michael Pollan wrote in The Atlantic in 2020, “Coffee has helped create exactly the kind of world that coffee needs to thrive.” But this alone doesn’t explain its pull: Many people view the act of buying a cup of coffee as a small pleasure, one that fits easily into a busy routine. As the price of everything—including lattes—has gone up in recent years, Americans have stood by this particular habit.

Inflation-squeezed consumers are shying away from eating at restaurants, but many have kept indulging in to-go coffee. Starbucks is stumbling—last year, its sales and store traffic dipped, its workers went on strike, and it brought in yet another new CEO—but cafés are flourishing overall. The retail-research firm Circana found that spending at coffee shops in 2024 was up 55 percent compared with 2017 (restaurant spending overall was up about 20 percent in that period). Businesses serving coffee and tea are one of the fastest-growing slices of the restaurant industry.

Because coffee has a price cap that’s fairly low, it is generally the “last to go” when people are cutting back on meals out, Alex Susskind, a professor of food and beverage management at Cornell, told me. A restaurant dinner could cost hundreds of dollars. But even the most elaborate coffee concoction in most cities couldn’t be more than $8. (I am ignoring stunt orders, such as this one that apparently involved 101 shots of espresso.) Spending more than a few dollars on a coffee drink might seem absurd, especially to those who grew up in an era of much lower pricing. But many people continue to view coffee as a relatively affordable luxury, making it unique in the realm of dining out, Susskind noted: Just like fast-food chains, which did well in the second half of last year, coffee survives through customers’ strong perception that the price won’t go above a certain threshold.

But even the last to go may have a shaky future. In December, coffee hit its highest price in nearly 50 years. Major droughts in coffee-growing areas such as Brazil meant that the cost of Arabica beans (a common variety served in the United States) went up about 70 percent in 2024. The price has eased slightly in recent weeks, from $3.35 a pound to $3.20 a pound, but it was closer to $1.80 this time last year. Store brands such as Nescafé and Folgers have raised their prices, pointing to bean costs. In 2025, coffee shops will need to decide how much of the expense to pass on to coffee drinkers. With all of the resources and labor that go into it, a cup of coffee arguably should cost more than what we pay for it now. If coffee prices keep rising, coffee enthusiasts may be forced to consider how much their daily ritual is truly worth.

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Thermometers Are Hot Garbage

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P.S.

I enjoyed reading this set of food and drink predictions from Kim Severson, who suggests that we are in for a year of breaking with convention. One trend she’s eyeing? Savory coffee experiences. “Chefs are infusing coffee with sunchoke purée and avocado, and flavoring drinks with ginger, lemongrass and rosemary smoke,” Severson writes. “And yes, coffee is starting to get the omakase treatment.” Happy new year!

— Lora

Stephanie Bai contributed to this newsletter.

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