American grocery shoppers paid nearly 12 percent more for coffee and tea materials over the year ending in August 2025, and the price pressure has not let up. Brazil’s official 2024 coffee harvest came in at just 54.2 million sacks after adverse weather cut output, while Indian tea auction data for 2025 shows similar strain on supply. The Bureau of Labor Statistics confirmed that the beverage-materials category stayed elevated in its February 2026 Consumer Price Index release, signaling that relief for household budgets is still not in sight.
Drought damage from Brazil to India keeps shelf prices climbing
The 12-month percent change for “Beverage materials including coffee and tea” in the CPI-U table published by the September 2025 CPI registered the sharp increase that shoppers had already felt at checkout. That figure captured a full year of tightening supply from two of the world’s largest beverage-crop producers. Brazil, the single biggest coffee exporter, saw its national crop agency CONAB finalize the 2024 harvest at 54.2 million sacks, a total the agency attributed to adverse climate conditions during the growing season.
On the tea side, India’s Tea Board compiled weekly average auction prices throughout 2025 that reflected constrained volumes and shifting quality mixes at domestic sale centers. The auction records, published on the Tea Board’s price-reporting portal, track CTC leaf and dust categories across multiple auction weeks. Drought-related shortfalls in key growing regions reduced the amount of tea available to buyers, pushing per-kilogram realizations higher at auction and feeding into retail price increases abroad.
Those supply-side problems did not resolve before the calendar turned. The BLS released its February 2026 CPI on March 11, 2026, and the CPI-U expenditure table again listed “Beverage materials including coffee and tea” with a 12-month change that remained elevated. For American households, that means the cost of a bag of ground coffee or a box of tea has stayed materially higher than it was two years ago, with no sign of a quick retreat.
Why the price surge has outlasted a single bad harvest
A single drought year can cut output, but the persistence of high prices into early 2026 points to a deeper cycle. Coffee trees take three to five years to reach full production after planting. Even if Brazilian growers began replanting or expanding acreage during the 2024–2025 season, those trees will not contribute meaningful volume until 2027 or later. The 54.2-million-sack total recorded by CONAB for 2024 set a constrained baseline that global roasters and traders have been working against ever since.
Tea bushes recover faster than coffee trees after a drought, but Indian growers still face a lag between improved rainfall and restored auction volumes. Weekly price data from the Tea Board for 2025 captures the cumulative effect: buyers competing for smaller lots drove average prices upward across successive auction weeks, and those higher bids filtered into export contracts and, eventually, supermarket shelves. Because many international buyers sign forward contracts pegged to auction benchmarks, the elevated 2025 prices are still working their way through supply chains.
Currency movements and logistics have amplified the squeeze. When producing-country currencies weaken against the dollar, some exporters hold back stocks, betting on better returns later. At the same time, higher shipping and insurance costs since the pandemic have raised the delivered price of every container of beans or tea chests. These layers sit on top of the weather shock, turning what might have been a one-year spike into a multi-season adjustment.
Retailers and roasters have also been cautious about cutting prices quickly. After absorbing earlier cost increases, many brands rebuilt margins only recently and are reluctant to reverse course while wholesale markets remain tight. That helps explain why the BLS still shows a strong year-over-year gain for beverage materials even as some other grocery categories have cooled.
How consumers and businesses are adapting
Faced with stubbornly higher prices, households are changing how they shop. Some are trading down from premium single-origin coffees to blends, or from branded tea bags to store labels. Others are buying in bulk or shifting to instant coffee, which can stretch a budget further per cup. These shifts show up gradually in expenditure data, but they do little to alter the underlying supply constraints that keep the index elevated.
On the business side, roasters and packers are experimenting with lighter packaging weights, reformulated blends, and promotional calendars that emphasize smaller discounts spread over longer periods. Importers are diversifying sources where possible, adding origins in Africa or Southeast Asia to reduce dependence on any single drought-prone region. However, given Brazil’s dominant role in coffee and India’s importance in tea, alternative origins can only partially offset shortfalls.
For readers tracking these trends, detailed CPI category figures for coffee and tea can be explored through the BLS interactive data tools, which allow users to view historical changes by month and subindex. Those series reinforce what shoppers already feel in their wallets: beverage staples that once seemed like small, routine purchases have become a more noticeable line item in the household budget.
Until weather conditions stabilize across key growing regions and new plantings reach maturity, analysts expect the pressure on beverage-materials prices to persist. That leaves American consumers with limited options beyond careful brand choices and brewing habits, while the global coffee and tea industries navigate another year defined more by scarcity than surplus.
