Why is coffee so expensive in Canada?

But the grocery inflation that’s hit everyone’s pocketbook applies to coffee, too. From June 2021 to June 2022, the average price of ground or whole-bean coffee bought at stores increased by more than 20%, then another 9.2% between August 2022 and August 2023, according to Statistics Canada. As for coffee shops, recent data from Square shows that the average price of a latte has passed the $5 mark—though if your tastes are simpler, you can still get drip coffee for under $3. 

Of course, coffee doesn’t grow on trees—at least, not in our climate. There are reasons these little beans of joy cost what they do. Here’s why, plus some tips on avoiding sticker shock without having to cut back on your java habit—at least, not much.

Featured credit cards

featured

Best for travel card

Scotiabank Passport™ Visa Infinite Card

Earn points on every purchase, pay no FX fees, and receive complimentary airport lounge access (with 6 annual passes).

GO TO SITE

Annual Fee: $150

Interest Rates: 20.99% purchase, 22.99% cash advance, 22.99% balance transfer

Welcome offer: $250 value Earn up to $1,100 in value in the first 12 months, including up to 35,000 bonus Scene+ points. To qualify, apply by December 31, 2024.

featured

Best for cash back

SimplyCash Preferred Card from American Express

Earn 4% cash back on groceries and gas. Plus get a flat 2% on all other everyday purchases.

GO TO SITE

Annual Fee: $120

Interest Rates: 21.99% purchase, 21.99% cash advance, N/A balance transfer

Welcome offer: $250 value Earn a bonus 10% cash back on all purchases for your first 3 months (up to $2,000 in purchases). Plus, earn a $50 statement credit when you make a purchase in month 13. This could add up to $250 in bonus value in your first 13 months.

featured

Best low APR card

MBNA True Line Mastercard credit card

An ideal option for cardholders looking to manage debt, the card’s low 12.99% APR is almost half the conventional interest rate found on most cards.

GO TO SITE

Annual Fee: $0

Interest Rates: 12.99% purchase, 24.99% cash advance, 17.99% balance transfer

What factors affect the price of coffee?

Coffee is both a crop and a processed food product (unless you’re roasting your beans at home), so it’s easy to imagine what goes into the cost: everything from farm labour and fertilizer to shipping, roasting, packaging, marketing and, of course, retail markup. Also, if you’re buying your morning brew from a local café, add on the cost of the the cups and other ingredients like milk and sugar, as well as overhead costs like rent, staff, equipment and everything else that keeps a business in Canada going. All of these things get factored into the amount you pay when you tap your card.

Let’s start with farming. Coffee won’t grow just anywhere, or we’d all have it in our yards. Almost three-quarters of the coffee we import comes from Colombia, Brazil, Honduras and Guatemala, and local issues come into play for prices there. For instance, in 2022, demand for higher wages among pickers in Colombia led to higher harvesting costs. 

And even in countries such as Ethiopia that are known for the crop, coffee trees are very particular about where they thrive. That’s where climate change comes into play. Rising temperatures, less predictable rainfall and the increase in extreme weather events are significantly reducing the amount of land that’s suitable for growing coffee while also harming the crops that continue to grow. Coffee, as a crop, is seen as particularly vulnerable to climate change, and some studies estimate that by 2050, the amount of land suitable for growing coffee will be cut in half. Meanwhile, coffee farmers are already noticing negative changes to their typical weather, growing season and harvests. 

Now down the supply chain… Once you’ve got the beans, you have to move them. If you think you gas is expensive, imagine what it costs to fill up a freighter ship. Then there’s trucking it around this big country of ours: while freight prices have dropped since their 2022 peak, they’re still significantly higher than in the past.  

Closer to home, the same issues pushing up prices of other goods are affecting the cost of coffee, too. Think: wages, rent, cleaning products to keep that bathroom sparkling, even the electricity used to power the grinder. Plus, the price of milk is up, as is the price of oat milk—the latter also linked to climate change, as oat harvests are down due to poor growing seasons. It’s enough to make a person switch to brewing foraged dandelion roots instead—almost.

Where can you find a good deal on coffee?

You know this already, but it bears repeating: it’s cheaper to make your own coffee than to buy it at a café, where you’re paying a surcharge for labour, overhead costs and that seat by the window. The walk to your local coffee shop for a caramel macchiato to help cure your 3 p.m. slump is an enjoyable treat, for sure, but recognize that you’re paying for the experience, not just the beverage. 

On the one hand, the “latte effect” isn’t going to make you rich or poor. On the other hand, if you’re spending $10 a day on takeout coffee, that adds up to about $300 a month—and only you know the effect that has on your budget. (It’s even worse if you’re paying with a credit card and carrying a balance.) You can keep costs down at cafés by trying tricks like ordering smaller and cheaper options and buying from coffee shops with lower prices.

And, when you are making coffee at home, there are a few tricks too. One simple one is to avoid waste: if you make a whole pot and don’t drink it, that’s almost literally money down the drain. Pay attention to how much coffee you drink and how much you enjoy it: it’s possible you could cut back without too much suffering. And use the same strategies as for saving on groceries in general: watch for sales, keep an eye out for coupons, buy in bulk and pick brands that satisfy your taste buds and your bank balance. 

More on smart spending:

• Canadian consumer debt: How we’re paying for our credit cards
• How ADHD can affect your finances
• Earning, saving and spending money in Canada: A guide for new immigrants
• Making sense of the Bank of Canada interest rate cut on June 5, 2024

About Kat Tancock

Kat Tancock is a writer, editor, translator and content strategist based in B.C. She writes for publications including The Globe and Mail, Chatelaine and Asparagus.

Linkedin Website