Roasters are now thinking twice before scaling operations

In specialty coffee, growth has long been seen as a marker of success. Expanding to new locations, increasing production volumes, and scaling operations have traditionally been the goals for many roasters. 

But with rising costs, high interest rates, and ongoing market volatility, scaling a coffee business today is more complicated than ever.

With these challenges in mind, many roasters are choosing to focus on more controlled, profitable operations rather than rapid expansion.

I spoke with Sahra Nguyen of Nguyen Coffee Supply, Inácio Pires Teixeira of InterAmerican Coffee Europe, and Bryndon Bay of First Crack to learn more.

You may also like our article on how roasters are managing cash flow with higher prices.

The challenges of scaling in a volatile market

Over the past decade, the specialty coffee sector has grown rapidly, with new roasteries emerging in a growing number of countries. As regional industries have matured, market saturation has presented new challenges for businesses looking to scale.

“There are so many roasteries offering coffees and services that meet the needs of cafés, making differentiation more difficult,” says Bryndon Bay, the co-founder of First Crack, a co-roasting space in St Louis, Missouri, US.

The economic reality of 2025 also poses new hurdles for roasters to overcome. A few years ago, financing was more accessible, allowing businesses to scale at a steady rate. Now, borrowing money has become more expensive due to rising interest rates, making expansion a much riskier endeavour. With increased costs across the board, many roasters are questioning whether the return on investment justifies the financial risk.

Beyond cost concerns, staffing has become a growing issue. Hiring and training baristas and roastery staff is expensive, and with high turnover rates, maintaining a strong team is more difficult than ever. When businesses scale, they need a stable workforce, and this has become a significant challenge.

Market instability has made every aspect of expansion harder, from securing capital to maintaining reliable supply chains. Coffee prices also remain high and volatile, making it increasingly difficult to plan for the long term.

“We’ve definitely been impacted by the rise in coffee prices,” says Sahra Nguyen, the founder and CEO of Nguyen Coffee Supply, a Vietnamese coffee importing and roasting company in the US. “The price of robusta in Vietnam is at an all-time high, which means that producers – some of which have received little attention from the global coffee market and never had any control over the prices they receive, or no representation in the industry’s conversations – now have more power and autonomy.”

Sourcing more coffee is now increasingly difficult

The specialty coffee industry has advocated for paying producers higher, and therefore fairer, prices for some time. While many believe sustained high green coffee costs are a long-overdue change, they also present challenges across the entire supply chain – and don’t necessarily equate to a better position for producers.

“A lot of farmers are holding onto their coffee because they want to see the price go up,” Sahra says. “In the past, we could lock in our volume for the year based on relationships with buyers. But now, producers want to be paid immediately, or they’ll opt for the highest price on the market.

“It’s created instability and volatility. As a small business, cash flow is important, so paying for a year’s inventory upfront is a huge challenge,” she adds. “But at the same time, I don’t blame the producers; they’ve never had a market like this before.”

Sourcing green coffee has therefore become more complicated, with availability and pricing shifting constantly. With rising prices, many cafés are hesitant to accept higher costs, forcing roasters to rethink their pricing strategies. 

“I don’t think that the size of specialty roasters matters as much as how they protect their margins,” Bryndon explains. “Risk can be mitigated at any size – the principles are the same. With the cost of green coffee skyrocketing, are roasters able to raise prices or find efficiencies in their operations?”

While scaling a business has become more complex, some advantages have emerged. Consumers are more willing to pay for quality coffee, which means that roasters can maintain higher price points with less pushback, although price sensitivity is still an important consideration.

“For the last couple of years, we haven’t raised our prices,” Sahra says. “We’re absorbing the additional costs and viewing it as a temporary shift, as we foresee that prices will stabilise next year. 

“There will be a new baseline price, which will increase the value of coffee and benefit the entire industry; it will force larger companies who control most of the market to raise their prices, which will support smaller businesses.”

How coffee roasters can hedge against market volatility

Managing financial risk is now a top priority for roasters. Many are adjusting their strategies to maintain stability, such as securing green coffee contracts that lock in prices. Instead of long-term contracts, some roasters are shortening their commitments to allow for greater flexibility. 

“We used to contract for six months, now we contract for three to four,” Bryndon explains. “Additionally, the periods covered by our sales contracts mimic those of our green contracts, rather than having fixed pricing for 12 months.”

For those working with green coffee importers, finding value-priced options has become essential. Some roasters are exploring past crop coffees and lesser-known origins as cost-saving measures.

“Roasters should be prepared for some flexibility in terms of quality, as certain coffees may not be available due to declining stocks in the warehouses,” says Inácio Pires Teixeira, CEO of InterAmerican Coffee Europe, a company of Neumann Kaffee Gruppe. “We recommend, if possible, relying more on regional coffees that score 80 to 82 points.

“In addition, it’s important to stay in close contact with suppliers and keep them informed of the quantities you need,” he adds. “In the event of a possible delay in payment, it is advisable to notify the supplier well in advance. It is also better to purchase coffee as agreed and pay invoices on time, otherwise you’ll need to pay interest and storage charges.”

Coffee roasters need to build long-term resilience

Diversifying revenue streams is another strategy that more roasters are leveraging. Subscription services, online sales, and direct-to-consumer models provide more predictable cash flow and reduce dependence on wholesale customers, who may be more affected by market fluctuations.

As traditional scaling becomes more difficult, some roasters are considering branching into other artisanal products like craft chocolate, natural wine, or specialty tea. The infrastructure needed for these industries is similar: small-batch production, careful sourcing, and a focus on quality.

However, diversification is not without risk. Expanding into new product categories must align with a roaster’s existing business model to ensure long-term success.

Ultimately, the decision to scale or not depends on a roaster’s long-term vision. Some businesses aim for slow, sustainable growth, while others prioritise financial stability over expansion.

The traditional mindset of “grow or die” is shifting, with more businesses opting for controlled, profitable operations instead of aggressive growth fueled by borrowed credit. With coffee prices expected to remain high and volatile, roasters must carefully evaluate whether scaling is worth the risk.

For some, co-roasting models have become a smart alternative to traditional scaling. 

“Because we buy a lot of coffee, all of our customers avail of discounted pricing and group shipping rates,” Bryndon says. “Co-roasting is a cost-friendly solution to roasting your own coffee for small and medium-sized roasters.”

However, scaling down isn’t necessarily the answer either. What matters most is protecting margins and maintaining operational efficiency. Businesses that can effectively manage costs, strategic sourcing, and lean operations will be best positioned to weather market challenges.

“Today’s environment is more challenging, but it’s an opportunity for efficient, well-run roasteries to thrive. During recent years of inflation, roasteries and cafes raised prices to keep margins intact, but now, does the end consumer care that green coffee prices are high?” Bryndon asks. “Will they gravitate towards shops with lower pricing or drink coffee at home? These are the questions we need to ask.”

As roasters navigate an increasingly complex economic landscape, strategic planning and adaptability will be essential for long-term success. While expansion remains an option, many businesses are now prioritising efficiency, resilience, and profitability over rapid growth.

For specialty coffee roasters, the future isn’t necessarily about becoming bigger; it’s about becoming better.

“Not all businesses need to scale indefinitely, or even at all. What kind of business do you want to build? What kind of value do you want to create, and how much do you actually need to generate to achieve that goal?” Sahra concludes.

Enjoyed this? Then read our article on why roasters have to compete on more than just price.

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