DENVER — As tariffs begin to take their toll on the coffee industry, Denver coffee roasters are navigating a landscape of rising prices and uncertainty. Queen City Collective Coffee and Dazbog Coffee are two companies whose profit margins are at risk.
Queen City, started by Scott Byington and his two brothers in 2016, has quickly expanded to a presence of five cafes across Denver. They attribute their success to cultivating a direct relationship with small-scale coffee producers from nine countries around the world. The recent tariffs, however, have created new hurdles.
“Tariffs have certainly affected us as a small business and the coffee industry at large,” Byington said. “Probably the biggest impact has just been the uncertainty of it all. Is it going to be a 10% tariff? Is it going to be a 20% tariff? Is it all going to go away? That uncertainty has definitely impacted our ability to forward contract.”
Byington is set to fly to Zimbabwe this week to negotiate try to negotiate a new partnership with a farm, and the tariffs are an extra hurdle. International coffee growers may be hesitant to partner with American companies who aren’t sure what their pricing models are going to be in the future.
“Coffee already is a low-margin product,” Byington explained. “To then have a 10% cost come on top of that certainly does impact us in a way that is, for a small business, quite substantial.”
Dazbog coffee has been in business for nearly three decades, and they are also feeling the impact. Dazbog Founder and Owner Leo Yuffa is troubled by the timing of the tariffs. He already had to raise prices to accommodate historically high coffee commodity prices.
“This just kind of adds insult to injury,” Yuffa said. “We hope that it's short term. What we're seeing in the last several weeks, is that the tariffs kind of go up, there are agreements, there are discussions, and they come down. We're hoping for the best.”
Yuffa believes that, while the tariffs are problematic, they aren’t going to affect prices for their customers. The cause of any potential changes to their price, Yuffa said, will be due to the coffee commodity market.
As a smaller roaster, Queen City doesn’t have that same luxury. They will have to start increasing their prices in bag sales and cafes starting in late summer and early fall once they start roasting beans affected by the tariffs. Byington said, though, Queen City wants to be as transparent as possible to customers about the price increase.
“We do plan to have a line item in our cafes, a 10% line item, that just says, ‘this is the tariff price,’” Byington said. “If the tariffs go away, we can remove that in one click of a button.”
Byington hopes that businesses that must increase their prices in response to tariffs do so responsibly and remove the price increase if the tariffs are removed.
“This isn't a moment to price gouge,” Byington said. “This isn't a moment to raise your prices and keep your prices high. This is a time to come together as a community and just weather this storm.”
