Coffee Set To Be Dearer For Consumers

Branded coffee in India is a largely a two- player market with Nestle and HUL dominating. Hence, we expect companies to gradually pass it to end consumer, but given such sharp inflation, slight margin pressure is likely in coffee segment in Q4FY25 - Abneesh Roy, Executive director, Nuvama Institutional Equities, in a note

Bengaluru: Your favourite sip of coffee in the morning at home or at a hangout place in a coffee bar is likely to be pricier soon. All thanks to surging coffee prices globally, Indian consumers are expected to pay more for their favourite drink in coming days.

According to analysts and planters, coffee production globally has been hit by severe drought in major growing regions of Brazil. As the world’s largest producer falters, global production fails to cope up, prompting prices to go northward. However, while consumers may have to pay more in coming days, several coffee planters in States like Karnataka, Kerala, Tamil Nadu, Andhra Pradesh & Odisha are a happier lot.

“Arabica coffee prices have surged 31 per cent in 2025 so far, 120 per cent in the last 12 months. Similarly, Robusta coffee prices had surged 60 per cent in 2024 and have increased 15 per cent in 2025. In our view, branded coffee in India is a largely a two- player market with Nestle and HUL dominating. Hence, we expect companies to gradually pass it to end consumer, but given such sharp inflation, slight margin pressure is likely in coffee segment in Q4FY25,” Abneesh Roy, Executive Director, Nuvama Institutional Equities, said in a note.

He also noted that outdoor consumption of coffee is rising with increasing popularity of various coffee chains.

In Indian rupee term, coffee prices have been steadily increasing. Robusta prices increased from Rs200 per kg from January 2024 to Rs520 as of now. Also, Arabica coffee prices shot up from Rs290 in January 2024 to Rs750 per kg in February 2025.

Cost of coffee powder per kg has also gone up to Rs1,000-1,100 from Rs800-850. Against this backdrop, not only brands, but also eateries serving coffee across India are likely to increase the price of coffee by around Rs5 or more. Meanwhile, coffee planters are receiving higher dividend of their produce owing to the high prices. As coffee is a global commodity, prices in domestic market reflect immediately factoring in the changes.

“Coffee planters are getting good prices for their produce given the high ruling prices globally. Despite being the harvesting period, prices are unlikely to come down in the coming months,” said a planter.

India exported $1.29 billion worth coffee in 2023-24, which was a steady rise over previous year. Similarly, domestic consumption has jumped to 91,000 tonne in 2023 from 84,000 tonne in 2012.