Houston roasters feel effects of tariffs on coffee beans

Houston roasters feel burden of coffee tariffs

In southeast Houston, Three Keys Coffee has watched the price of beans sourced from Brazil steadily grow.

HOUSTON - Outside of Hawaii and Puerto Rico, there is no climate in the United States that can reliably grow coffee commercially. 

Consequently, 99% of our daily appetite for 145 million cups of coffee relies on imported supplies. Houston remains one of the primary ports of entry for coffee imports. 

Tariff effects on coffee

Big picture view:

Tariffs imposed by the Trump administration, ranging from 10% to 50%, have helped push prices higher, beyond recent increases caused by environmental and political disruptions. 

As a result, the Burau of Labor Statistics reports ground-coffee prices are the highest they've ever been.

Three Keys Coffee

Local perspective:

In southeast Houston, Three Keys Coffee has watched those prices grow. The specialty roaster has a downtown coffee shop, and supplies a number of retailers and cafés in a sizable portion of the country. 

The 50% tariff on Brazilian coffee beans went into effect in early August, meaning there has been little time before now for higher prices to have an effect. 

But the South American country accounts for nearly 40% of the world's supply, and with beans representing one of the highest costs for coffee roasters, every increase takes a bite out of business margins. 

Three Keys says it has been sourcing beans from other countries, with lower tariffs, to try to contain costs.

While there is some hope that a new bipartisan bill, that would exempt coffee from tariffs, might get some traction. Price hikes seem unavoidable. Three Keys says it has already warned some retailers that sell their coffee that prices will go up.

What they're saying:

"It is one of the few goods that we love and consume, that we cannot grow here. You have to import coffee beans," says Three Keys Coffee co-founder, and CEO, Kenzel Fallon, about coffee expenses and Brazilian imports, "We stocked a lot of Brazilian coffee, we included it in some of the blends that we have. We also have a single origin that is 100% Brazil, and we're having shift some of our purchasing to other origins that, maybe, aren't subject to as high of tariffs."