LEXINGTON, K.y. — President Trump signed an executive order imposing an additional 40% tariff on Brazil, bringing total tariffs on certain Brazilian goods to 50%. Coffee roasters and shops across the nation are preparing for significant price impacts..
Chris Herman, part-owner of 4th Level Roasters in Lexington, has already raised his coffee bag prices by $2 over the past year. With the new tariffs, costs may spike even higher.
"Brazil is like kind of a staple among espresso blends, it is something that's kind of hard to replace, and their production is so big, so that's why there's such a huge emphasis on Brazil right now," Herman said.
The tariffs are forcing small business owners to pass increased costs to their customers. Herman is concerned about pricing thresholds that could drive customers away from specialty coffee.
"Some roasters took two or two price hops. So that's something that obviously we all want to prevent," Herman said. "Because we're not sure what the threshold is that a customer is going to say, 'Okay, well, I'm just not going to buy, you know, fresh roasted coffee anymore. I'll just go buy some store coffee that doesn't taste as good."
In response to rising costs, Herman says local coffee shops across Lexington are forming an unprecedented coalition to purchase coffee together. City Roastery, Coffee Times, and Café Marco have joined 4th Level Roasters in this collaborative effort.
"What we've landed on is basically trying one specific wholesaler, and they're giving us a 30 to 40 cent per pound discount for buying in bulk," Herman said.
The partnership transforms competitors into collaborators in an industry traditionally marked by rivalry.
"I definitely don't think that you'd ever see that. But the coffee community here has been pretty cool so far," Herman said.
Herman believes the cooperation could yield long-term benefits beyond cost savings.
"I think that's that's really exciting, and that actually could be one of the best things that's come out of all the price increases, like us all banding together and getting to know each other better," Herman said.
"If we're all kind of competitive and we're all pretty good, it raises everybody's expectations, so then we all get better," he concluded.
