Malaysian Cafe Owners To Rethink Pricing Strategies As Coffee Bean Prices Reach Record Highs

By Nur Athirah Mohd Shaharuddin & Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Jan 5 (Bernama) – Malaysian cafe owners who import coffee beans and sell speciality coffees are now faced with the challenge of rethinking their pricing strategies as coffee bean prices hit record highs. 

The cost of coffee beans, particularly from major suppliers Brazil and Vietnam, is expected to rise further in 2025 due to adverse weather conditions and supply shortages driven by high global demand. 

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Brazil, the world’s largest exporter of Arabica coffee, has experienced one of its worst droughts in history, followed by frost and excessive heat, which severely reduced crop yields.

Vietnam, the top producer of Robusta beans, has struggled with prolonged droughts and heavier-than-usual rainfall.

The price of Arabica beans reached nearly US$3.50 per pound in December 2024, marking its highest level since 1977, marking a staggering 83 per cent increase in 2024.

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Robusta beans, mainly used in instant coffee, have also seen a sharp price jump, rising 73 per cent to US$5,885 per tonne in November 2024 due to unpredictable weather patterns. 

Bernama spoke to three cafe owners in Kuala Lumpur to gain insight into the challenges they are currently facing.

Hijjaz Suhaimi, 24, owner of Rendevu Coffee in Wangsa Maju, said that with skyrocketing green coffee bean prices, businesses now face difficult decisions. 

“However, as long as businesses maintain strong branding and adapt to cultural trends, demand will persist, even with higher prices,” he said.

Hijjaz’s cafe imports green coffee beans from Guatemala, Ethiopia, Brazil, and Mexico, focusing on balancing body and acidity to appeal to customers who enjoy fruity aromas without overly acidic notes.

To offset the rising cost of buying roasted coffee -- up to RM100 per kilogramme -- Hijjaz said roasting their coffee beans is a more cost-effective solution.

“By roasting green beans ourselves, we can produce the same quantity for just RM40,” Hijjaz explained.

While some customers may resort to making coffee at home, Hijjaz said Rendevu Coffee has proactively worked to maintain loyalty by educating consumers on how to brew their signature roasted beans at home.

“Our goal is to inspire customers to enjoy our signature coffee both in the cafe and in their kitchens,” he said.

Despite the challenges, Hijjaz remains optimistic, believing that “coffee consumption is more than just a drink, it is a lifestyle”.

Kampung Brew owner, Che Wan Sufian Che Wan Abdullah, 37, expressed concern that the global coffee bean price hike, which could reach up to 25 per cent, is worrying local coffee shop owners. 

“We have not received any official notices from suppliers yet, but the recent sales and service tax hike and minimum wage adjustments have already driven up costs for items like coffee, cocoa, and milk.

“If the coffee bean price hike happens, most cafes will be forced to raise their prices,” he told Bernama at the outlet located in Ampang recently.

However, Che Wan Sufian is optimistic that customers will continue to support local businesses despite the price increases. 

Ellina Amin, 37, owner of Whatever Works Coffee in Kampung Datuk Keramat, said her business is keeping its beverage offerings stable, for now.

She noted that the current coffee bean pricing offers enough flexibility to adjust without drastic hikes.

“We aim to keep pricing steady. If increases are necessary, we will introduce them as an option for customers,” Ellina said.

Sourcing beans from Ethiopia, Brazil, and Colombia, as well as a local roaster in Penang, allows her to offer customers a range of options, including premium speciality beans.

“For example, if there is a special coffee bean from another country which costs more, coffee enthusiasts who are willing to pay the price can still enjoy it,” she explained. 

Still, as coffee bean prices continue to climb, cafe owners and consumers alike may agree that perhaps it is time for Malaysia’s coffee industry to achieve greater recognition as a specialty-grade producer.

This could help reduce reliance on imported beans and enhance the local coffee market. 

Cafe owners will need to reconsider both their pricing strategies and production methods with raw material costs expected to rise significantly.

They could either pass these costs onto customers through higher prices or look for ways to reduce overhead expenses.

In the meantime, perhaps it is time to sit back and smell the coffee.

-- BERNAMA