Coffee at a Crossroads: What the Shake-Up in Your Morning Cup Says About Consumer Brands Everywhere

I’ve never had a cup of coffee in my life. Not one. That usually gets me a raised eyebrow or two — especially since I spend a good chunk of my time thinking about global supply chains and consumer markets. But even without ever sipping a latte, I’ve learned something important: if you want to understand where consumer brands are headed, you should pay attention to coffee.

Coffee is a daily ritual for billions. It’s one of the most globalized commodities on the planet and cuts across cultures and classes. It’s equally at home in a roadside diner, a Michelin-starred tasting menu, or the office break room. As a result it’s a category where costs, consumer habits, and capital markets collide faster than almost anywhere else.

So what happens when this most ordinary ritual finds itself at a crossroads? That’s what we’re living through right now — and the lessons extend well beyond coffee.

The Scale of Coffee

I think it’s easy to underestimate how big of a business coffee actually is.

In 2023, the world produced about 11 million metric tons of green coffee. That’s the equivalent weight of 177 million people — nearly half the U.S. population.

In 2025 the global coffee market is worth about $473 billion — larger than the global chocolate industry and bigger than bottled water. In the US the coffee economy contributes $343 billion in economic activity, supporting over 2 million jobs and generating more than $100 billion in wages.

It’s safe to say: coffee is no niche. It operates at the scale of beer, bottled water, and fast food — which is why what happens here matters for every other consumer brand.

A Quick History of the Waves

Coffee has long been described in “waves,” and those waves map neatly onto other categories.

First Wave (commodity, mass-market):

Coffee was sold in big tins, cheap and ubiquitous — Folgers, Maxwell House. The point was fuel, not flavor.

• Parallels: Beer in its Budweiser/Coors heyday, or flour as a generic grocery staple 

Second Wave (experience and brand):

Starbucks, Peet’s, and Dunkin’ elevated coffee from commodity to culture. Starbucks in particular leaned into Howard Schultz’s “third place” — a café as a community anchor between home and work.

• Parallels: Beer with Sierra Nevada or Sam Adams; baking with Williams-Sonoma and King Arthur positioning home baking as an experience.

Third Wave (craft, provenance, story):

Artisan roasters like Blue Bottle, Intelligentsia, and Ritual turned coffee into connoisseurship- ie Single-origin beans, pour-overs, tasting notes. Coffee started to look more  like wine and storytelling.

• Parallels: Craft beer’s explosion of microbreweries and hazy IPAs. Craft spirits emphasizing small-batch whiskey or single-origin gin botanicals. Even the sourdough revival during the pandemic fits here: the “starter” became part of the brand.

And now, coffee is entering what feels like the start of a Fourth Wave:

On one side, tech-enabled convenience — app-first, cashier-less, ultra-cheap, Luckin Coffee-style and On the other side, deeply human community spaces — cafés reclaiming the “third place” ethos.

That split isn’t going to be unique to coffee, but it’s just where it shows up first.

Why 2025 Is Different

Three forces have converged at once:

1. Costs and Tariffs Have Become Strategic

Coffee prices have always been volatile, but the shocks are sharper now. The US announced a 50% tariff on Brazilian beans this summer and Brazil’s crop has been impacted by weather swings. Arabica futures are up nearly 30% in just a few weeks.

2. Investor Logic Has Flipped

In 2019, Coca-Cola paid $4.9B for Costa Coffee, betting cafés would be a growth engine. Coke is currently preparing to sell Costa at a loss, realizing that running cafés is a very different game than bottling soda.

Meanwhile, Keurig Dr Pepper is making the opposite move. It’s buying JDE Peet’s for $18 billion, but then splitting itself apart — ironically undoing its merger less than a decade ago— creating a pure-play coffee company separate from sodas.

Ten years ago, the mantra was “bundle adjacencies.” Today, it’s “focus.” Coffee is either core or a distraction.

3. Consumer Behavior Is Splitting in Two

Starbucks became Starbucks by becoming a third place — a café with baristas who knew your name and the de facto coworking space for founder who couldn’t afford WeWork. However over the past decade, Starbucks leaned heavily into digital ordering and throughput. That makes sense when lines are long, but it chips away at what made Starbucks unique.

Meanwhile Luckin Coffee is bringing a cashier-less, app-first, cheap-and-cheerful model from China to the US. They’re not even pretending to offer community. It’s about speed and novelty.

Now Starbucks faces a choice: lean harder into digital convenience (compete directly with Luckin), or rediscover the community play that made it great.

This tension — efficiency (read cost) vs. humanity — is playing out across consumer categories. Coffee just happens to show it most clearly (how many food brands with farmers market roots or branding do you know?)

The Café Model in Retreat

Costa’s struggles highlight another reality: the economics of a footprint-heavy café chain are tough in an inflationary world. Leases, labor (to say nothing of unionization), and utilities tend to chew up margins.

Growth is shifting to:

• At-home formats (pods, beans).

• RTD (cans, bottles).

• Micro-footprint kiosks with lower overhead.

Cafés aren’t disappearing, but they face a choice: embrace hyper-efficient grab-and-g or deeply human community hubs. The middle ground — “a nice café with Wi-Fi” — is disappearing.

What It Means for Founders

Starting a coffee brand today isn’t the same as it was three years ago—Costs are far more volatile and sourcing flexibility has become a prerequisite to survival. At the same time, consumers have been trained by Luckin and Starbucks’ own app to expect either speed or a compelling story — instant convenience on one end, or a deeply human narrative on the other. Anything in the middle feels forgettable. On top of that, channel strategy has become a litmus test for some investors and buyers who want to know up front whether you’re building for at-home formats, ready-to-drink cans, or cafés. The days of “we’ll do a little of everything” seem to be gone.

If you’ve been building for five or ten years and are thinking about an exit, the bar has moved there too. Buyers are grading you not just on growth, but on resiliency. They want to know that your supply chain can flex under pressure and that you’re not overexposed to any single origin or format. Premiumization is no longer a cheat code on its own. Unless it’s paired with functionality, community, or convenience it risks being the first thing consumers trade down from when their grocery bill goes up. It also appears that acquirers aren’t really buying products anymore; they’re buying platforms. A good bag of beans is nice, but what really moves the needle is a system they can scale: data on your customers, multiple channels working together, operational reliability.

So can a new coffee brand still break out? Yes — but the next success story won’t look like Blue Bottle did in 2010. It will look like a platform: either convenience married to technology, or premium tied to genuine community.

Beyond Coffee

I’ve never had coffee. But I’ve learned that coffee is where every big consumer trend shows up first: rising costs, shifting investor logic, changing consumer habits.

And all of it points to what I believe is an eventual conclusion:

The future belongs to brands that are either ruthlessly efficient or deeply human. The safe middle has evaporated.

I don’t believe that this is just about coffee. It’s about every brand that sells a product tied to daily ritual. And that’s why, even without ever drinking a cup, I watch coffee closely. Because what happens here is almost always what comes next.