Coffee prices have been volatile since 2023. Arabica futures hit an all-time high of 440.85 US cents a pound in February 2025. Prices have eased since, but in the first seven months of 2026 arabica still averaged 62% more than in 2023, and robusta 48% more.

For a café chain the obvious question is what this does to a cup. The more useful question is what it does to everything else the chain sells.

A cup can absorb it

Take a ₹300 cappuccino. After 5% GST the café keeps about ₹286. The 18 g double shot inside it cost about ₹13.70 in beans at 2023-24 prices. With beans 55% dearer, it costs about ₹20.40.

That moves coffee from 4.8% to 7.1% of the cup’s net price. To hold the old margin, the café needs about ₹7 more a cup, a 2.4% rise. That is one quiet menu change.

A bag cannot

Now take a 250 g retail bag that nets the brand about ₹400 after tax and the retailer’s cut. Roasting loses weight, so the bag starts as about 300 g of green coffee. Its bean cost rises from about ₹170 to about ₹263.

Coffee’s share of net revenue, before and after a 55% rise in bean prices
4.8%
7.1%
A café cappuccino
₹286 net of tax, an 18 g double shot. Holding the old margin needs about ₹7 more a cup.
42.4%
65.7%
A 250 g retail bag
₹400 net after tax and the retailer’s cut. Holding the old margin needs 23% more.
Beans at 2023-24 costBeans 55% dearer

Our estimate from public data. Specialty green arabica at 2023-24 landed cost.

Coffee goes from 42% to 66% of what the brand earns on the bag. To hold the old margin, the brand needs ₹93 more a bag, a 23% rise. On the shelf that becomes about ₹140, because tax and the retailer take their share of every rupee added.

₹7 more a cup holds the café’s margin. The bag needs ₹93 more.

What it means for a chain

For a chain that earns about 70% of its revenue in cafés and 30% from coffee sold in bags and to businesses, our estimate is that 78% of the extra coffee cost lands on that 30%. If nothing changes, that is about 8 points of operating margin.

Three moves follow, in this order:

  1. Buy the bean differently. Forward contracts and buying ahead of the harvest steady the coffee bill before anything else changes.
  2. Price the bag on its own terms. The bag needs a larger price reset, phased in and tested, rather than the small rises that work for a cup.
  3. Hold the entry price in the café. Keep the cheapest cup where it is and earn more on the next choice: size, milk, food.

None of this requires a slower opening plan.

Prices: ICE arabica and robusta futures, monthly averages to July 2026. Cup and bag economics are our estimates from public information, using specialty green arabica at about ₹570 a kg landed in 2023-24, 16% roasting loss and about ₹80 a kg for roasting, packing and freight. Drawn from our coffee chain case study.