What do the pioneers think of specialty coffee’s future?

Estimated reading time: 8 minutes

Key takeaways

• Market consolidation squeezes independents, but also opens space for emerging specialty coffee brands.
• Automation risks cutting barista pay and eroding the human element consumers value.
• Climate change now drives declining yields, forcing producers toward hybrid varieties and new processing methods.
• Honest pricing and a values-driven new generation of buyers offer the industry genuine cause for optimism.

Specialty coffee is changing. Some of this change promises progress: more meticulous processing and precise roasting that improve coffee quality. 

Other changes, however, threaten the values that helped build the industry. A growing reliance on automation arguably erodes barista craftsmanship and culture, while increasing market consolidation shifts buying power to mega-conglomerates and squeezes independent operators.

We asked two people who have watched the industry through more than one cycle of expansion and contraction what they make of where it is heading. Their answers cover market consolidation, automation, climate change, and price volatility, but they land, perhaps surprisingly, on optimism.

You may also like our article on why specialty coffee is gaining wider recognition outside the industry.

Market consolidation presents challenges and opportunities

Independent businesses built specialty coffee’s reputation for quality, community, and transparency. Increasingly, though, bigger brands and investment groups are buying into the category.

Smaller traders have been absorbed by larger companies, which then gain a ready-made specialty division at a fraction of the cost of building one from scratch. Roasters have consolidated in the same way. Peet’s Coffee acquired Intelligentsia and Stumptown in 2015, Nestlé bought a 70% stake in Blue Bottle Coffee in 2017, and Lavazza went on to buy Carte Noire, Kicking Horse, and Maxicoffee.

The rapid rate of consolidation worries those who see it as a threat to specialty coffee’s values. When an independent brand gets absorbed into a corporate portfolio, quality and sourcing practices can shift to meet volume targets rather than the standards that built the brand’s reputation.

There’s also a structural disadvantage for smaller players. Large corporations can negotiate better terms with suppliers, invest in wider distribution, and absorb short-term losses in ways independent shops cannot.

Phyllis Johnson has watched several rounds of this play out. She co-founded BD Imports in 1999 and founded the Coffee Coalition for Racial Equity (CCRE) in 2020. She is candid about the unease consolidation brings.

“Rapid expansion can make existing businesses worry about their survival, while consolidation often means mourning the loss of independent, respected brands and their unique leadership,” she says.

But Phyllis doesn’t think the picture is entirely negative. “It naturally clears the field, opening up exciting new spaces for emerging brands to step up and thrive,” she says.

But these new opportunities are forming against a backdrop of inflation, which creates new pressures. Roasters and cafés are forced to raise retail prices, but customers still expect consistent quality for their money. Rising labour costs and high staff turnover keep undercutting these efforts, too.

Automation plays the same role

Automation is one response to those pressures, but the coffee industry’s growing reliance on it is contested. 

The clearest threat is economic. The average US barista earns US$16.42 an hour before tips, already below a living wage in most states, and automation gives owners a direct route to cut pay further. 

Research from economists Daron Acemoglu and Pascual Restrepo found that automation has driven a large share of the rise in US wage inequality over the past four decades, and coffee looks set to follow the same pattern. As machines absorb the technical skill that once justified higher pay, the incentive to pay baristas more can disappear.

Craft is the second casualty. The third wave of coffee was defined partly as a reaction against attempts to standardise the category, and automation risks removing intention from the coffee experience.

“On the consumer end, we must protect the human element,” Phyllis says. “Automation in the coffee industry should enhance efficiency, but it must never strip away the authentic human connections that make the coffee experience so meaningful.” 

Phyllis draws a clear line between coffee shops and coffee farms, though: “Automation on the producer end would be a welcome relief for small-scale farmers who still rely heavily on gruelling manual labour.”

Addressing climate change and price volatility

Automation at origin could help producers, but they face a bigger problem than manual labour. Weather patterns are becoming harder to predict, making it more difficult to grow coffee in the first place. Prolonged droughts and rising temperatures are affecting growing conditions across producing countries, sometimes damaging quality and sometimes wiping out entire harvests.

Trish Rothgeb is director of coffee and co-owner of Wrecking Ball Coffee Roasters in San Francisco, and she names climate change as the single most pressing issue in the industry today.

“The most threatening is declining yields due to climate change, and production threats stemming from labour shortages and producers’ unsustainable and volatile income levels,” she says.

Producers are adapting where they can. More are turning to advanced processing methods to protect flavour and quality as yields come under pressure, and more are considering hardier hybrid varieties built for warmer conditions. Delicate varieties such as Gesha remain in demand and still command a premium, but that premium sits alongside a harder conversation about what traditional, everyday coffee should cost.

“We need to convey to the consumer that coffee prices must rise to support production,” Trish says.

A new generation of buyers and consumers

Phyllis traces the same problem back to a mismatch between what production actually costs and what the wider market is willing to pay. “When the cost of production rises, but the broader market fails to reflect that increase, it forces us to reevaluate our approach,” she says.

She sees the beginnings of a fix in how a newer generation of buyers behaves. “Fortunately, a new generation of buyers understands this dynamic and actively wants a healthy, thriving supply chain,” Phyllis says. “Instead of hunting for the lowest possible price, they are willing to pay for value.”

Trish agrees that the appetite for good coffee isn’t going anywhere, even as the industry works through its pricing problems. “The folks in the industry have to get creative and solve problems, but it will not stop the interest in coffee. Coffee lovers will continue to pay for good coffee, and the market share for specialty will continue to grow,” she says. “In the long run, higher coffee prices will reset the value stream, and people will stop expecting low prices.”

Why the pioneers still believe in specialty coffee’s future 

For several years now, the story around specialty coffee has been one of pressure: rising energy and labour costs, a harsher climate, and a need to work out what younger customers such as Gen Z want from a cup of coffee. None of these challenges have disappeared, but Phyllis is still confident about where specialty coffee is headed.

“If everyone leverages their specific position to make whatever positive impact they can, we will collectively move toward a better industry,” she says. “We are at the start of explorations with specialty coffees, and I believe the future holds more innovations in production, processing, and beverage development.

“We can also be hopeful that the youth are becoming more interested in coffee globally.”

Trish’s optimism comes from the industry’s track record of solving problems it has faced before. “We have always innovated and we are not going to stop doing that. Coffee is far too interesting and diverse to be stalled and complacent,” she says. “I’m hopeful that we will continue to be delighted and pleasantly surprised at how coffee solves its problems and creates new flavours every day.”

Phyllis’ closing thought centres on who gets to shape what comes next. “What I feel is most important when we consider the future of coffee is that we allow the next generation to use their skills, knowledge, and passion to bring forth production and product ideas,” she says.

Between them, Phyllis and Trish describe an industry under real strain, facing a harder climate, tighter margins, and a market that hasn’t always paid producers what production costs. 

Neither pretends those problems will resolve themselves. But both point to the same fix: honest pricing, and a generation of buyers, baristas, and producers willing to build the next version of specialty coffee on their own terms.

Need more leads for your coffee business? Get in touch with PDG Media, our marketing agency dedicated to specialty coffee, here.

Future of specialty coffee FAQS

What is the biggest threat to specialty coffee’s future?

Trish Rothgeb points to climate change as the most pressing risk, citing declining yields, unpredictable weather, and labour shortages. Combined with volatile producer incomes, these pressures are forcing farmers to adopt new processing methods and climate-resistant varieties to protect quality and income.

Will specialty coffee prices keep rising?

Yes. Both Phyllis Johnson and Trish Rothgeb argue prices must rise to reflect true production costs. Phyllis says a new generation of buyers already accepts this, valuing supply chain health over the lowest price, which should help prices settle at sustainable levels.

Is automation replacing baristas in specialty coffee?

Not according to Phyllis Johnson. She sees automation as a tool that should support baristas and speed up service, not replace human connection. On farms, though, she views automation as welcome relief from hard manual labour for smallholder producers.

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