08/05/2025
Last week, I had a chat with Corey O'Leary from Spectrum News about the cost of coffee and the ripple effects of Bozo in Chief's tariff policies on our lives. While we only had two minutes of airtime to talk tariffs and costs, I first off want to extent a huge thanks to Corey for taking the time to talk and shine a light on the hardships we're facing over here, and I also wanted to take a second to provide a bit more context and a few more thoughts on the matter:
First off, coffee should be expensive, but it should be expensive in an economically just and equitable way, not because of tariffs! It would be one thing if coffee was as expensive as it is today thanks to a more robust and equitable trade structure that ensured a fair wage across the entire supply chain. However, the reality is that the history of coffee broadly follows the past few hundred years of European colonialization, and the only reason coffee has the reputation of being as cheap and available as it is is because of extractive colonial economies put in place by settlers in the vast majority of coffee growing regions around the world. There's a reason the minuscule amount of coffee grown in the United States costs exponentially more than coffee grown in other parts of the world, and it isn't cup quality or demand.
While specialty coffee does attempt to position itself as a way forward by incentivizing quality, sustainability, and relationship-based trade, we still pay prices that more or less follow the New York commodity exchanges' prices for coffee, just with a semi-arbitrary specialty premium attached on top. That commodity market cost exists agnostic of the costs of production, and exists just to let us know the best deal we can get, not to ensure a producer can even cover the costs of production.
The tools I discussed in the interview--forward booked coffee contracts, buying year-over-year--are steps we are equipped to take with the limited power we have as a small business, but we're also bound to the same COGS as VC backed coffee companies operating in cities like LA and NYC while operating as an employee-owned business in a city where the median household income is still under $40k. I shudder to think of what my inbox would look like if we did suddenly charging $10 for a cup of coffee.
Concurrent to all this is a firm acknowledgement that I also consider it my job to center the experiences and livelihoods of our own employees (roughly 50% of who are also employee-owners) as a guiding light in decision making over here. This past winter, we implemented our first company-wide raises since the pandemic and provided meaningful patronage dividends to our employee owners for the first time since making the transition to our employee-ownership model. That stuff isn't cheap to implement and those moves don't get to happen without careful planning and operation. Like I said in the interview, when someone in DC can get his feelings hurt and arbitrarily decide to knock out over half of our projected profit overnight unless we dramatically adjust our pricing, we're left with the option to either make that adjustment and risk alienating our customers on both a wholesale and retail level, twiddle our thumbs and hope Bozo changes his mind, or split the difference and drop any plans beyond keeping the lights on, but that's also a pathway that ultimately leads to stagnation.
If you've read this far, thanks! I truly don't want this to be a "woe is me" sob story post and there are a whole lot of marginalized folks out there having a harder time under the current political climate than we are. I just want to broadly acknowledge the wider range of pressures impacting our world and operation this year beyond the scope of this article so I'm not just some white dude reductively complaining about our "cheap" import product not being so cheap anymore. Phoenix tuned 35 years old this year. We survived a global pandemic, the 2008 crash, Lebron leaving for Miami, and the death of good MTV. We'll survive this one too, and we'll survive it thanks to our incredible community of customers and employees. Thank you all and see you in another 35 years.
General manager of Cleveland coffee shop Phoenix coffee says a 50% tariff on Brazil would lead to a six-figure increase on their yearly expenses.
