Greg Reed of Benicia savored a sip of coffee and slipped a piece of his scone to his dog Cocoa at Moschetti Coffee’s free tasting on Sixth Street in Vallejo Saturday morning.
Despite what he describes as “a perfect storm” of soaring raw material costs, insurance and utility prices and a 10 percent tariff levied by President Trump, coffee roaster Fabrice Moschetti is continuing his longstanding free tastings on Saturdays, though his coffee prices have gone up.
“I’m definitely going to keep buying my coffee here,” Reed said. “I love the way they open this up to the community,” referring to the outdoor space where he and other customers were sitting at several tables sipping coffee.
Holding up a bag of Moschetti’s Mistral Espresso he had just purchased, Reed added, “Plus, I love the flavor.”
Prices for green coffee — the unroasted, green coffee beans sold wholesale to which roasters like Moschetti apply their unique processes — have more than doubled in the last year, Moschetti said. Insurance costs in California have soared, PG&E prices have tripled, and now Moschetti and his counterparts must deal with tariffs, he said.
Moschetti imports green coffee beans, roasts them and sells them to about 400 hotels, restaurants and cafes all over Vallejo, the Bay Area and Sacramento. He also sells the beans at his retail store and on the website.
The popular Saturday tastings, which often include free live entertainment, and his 35-year-old company are examples of the importance of small local businesses to a community – businesses that have been challenged for over a year by the increasing prices.
A number of factors are behind the increases. Along with all the other woes, there are developments many attribute to climate change.
Rising temperatures, droughts and excessive rains struck Brazil and Vietnam, the world’s two biggest producers, during the 2024 coffee growing season. Vietnam’s December export fell nearly 40 percent, according to a January report from the International Coffee Organization.
The drop in supply was accompanied by growing global demand. In just one example, consumption increased 150 percent over 10 years in China, according to the U.S. Department of Agriculture.
As with gas prices, as Bay Area residents know all too well, less supply plus more demand equals higher prices.
“In my over 20 years in coffee this is the highest I’ve ever seen wholesale prices,” said Byron Ferm, a Vallejo resident with a long track record in the industry. Ferm now roasts coffee for himself, his family and friends as a cottage industry. His wares can be purchased via his Ferm’s Coffee Facebook page.
A fellow local coffee roaster echoed Ferm’s comment.
“The previous historical high was $3.36 a pound in 1976 when Brazil lost their entire crop,” said Reid Waterman of Benicia-based Bay Area Coffee. The company, also a roaster, was founded in 1995 by Mitch Lison and Tom Waterman, the latter of whom is Reid’s father. Their customers are mostly grocery store chains, though individuals can buy beans via the website.
The cost of wholesale arabica beans surpassed $4 a pound for the first time in February, jumping from under $2 a pound in January 2024 to a record $4.30 a pound on Feb.13.
The price was hovering around $3.89 Saturday. As their costs fluctuate, Waterman said, if costs go down, this is passed on to customers, and vice versa.
The supply issues were already making things tough enough. But then President Trump’s tariffs entered the picture.
A 10 percent base global tariff on imported goods, including coffee, went into effect April 5 and remains in effect. Heavier tariffs were paused for 90 days.
“Within 90 days, it might be 32 percent on Indonesian coffee, 45 percent on coffee from Vietnam,” Moschetti said.
It isn’t realistic to try to buy green coffee beans from a U.S. source, Moschetti and his counterparts said. Aside from a small amount grown in Hawaii, the United States produces little coffee domestically.
“The only place where coffee is commercially grown in the U.S. is Hawaii and (Hawaiian coffee) is expensive,” said Waterman.
“So it’s not even remotely sustainable,” he said.
“It hasn’t really hit us yet, but that 10 percent base tariff adds to the problem. In a world of four-dollar coffee, adding 10 percent to that can be the difference between making money and not making money,” Waterman said.
Moschetti summed up, “Coffee is crazy. Insurance is crazy. PG&E is crazy. Tariffs are crazy. It’s a perfect storm.”
During the interview at Moschetti’s Sixth Street facility, customers continually came over for a hello or a conversation, a tradition that has endured through the nearly 20 years the tastings have taken place. The roaster is always there on Saturday, and it seems clear that his customers will be as well.
Vallejo resident and former mayoral candidate Ravi Shankar has been coming to the tastings for 11 years. He said, “I have met activists, nonprofit leaders, neighbors, businessmen here. I’m sticking with Moschetti’s. It’s a place for community connections.”