Storm brewing: Coffee roasters tackle tariffs, inflation and labor costs

Photo / Tim Greenway Alina Lindemann Spear, production roaster, Coffee By Design, roasts beans in the roastery in Portland.

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By Tina Fischer

It’s always been expensive to roast high-quality coffee. It’s a complex process, involving a global supply chain, importers and distributors, costly specialized equipment, roasters with highly trained palates and an extraordinary amount of time to bring a premium brew from bean to cup.

But with recent tariff hikes imposed by the Trump administration on several countries where coffees are grown — 50% on India and Brazil, which is the world’s largest coffee grower — costs have escalated to the point where U.S. roasters find price increases impossible to avoid.

“We’re doing everything we can to not raise prices,” says Mary Allen Lindemann, who owns Portland-based Coffee By Design. “We’re crunching numbers all the time. I probably should have [raised] prices a month ago.”

She is adamant that “the quality and integrity of our product cannot change. Once you give that away, you can’t buy it back.”

Photo / Tim Greenway

Phil Hurley, left, head roaster and green buyer; Alina Lindemann Spear, production roaster; and Mary Allen Lindemann, owner of Coffee By Design, in the roastery in Portland.

All costs have gone up

Lindemann sources half a million pounds a year from over 23 countries in addition to Brazil, including Uganda, Rwanda, India, Burundi, Guatemala, Honduras, Sumatra, Papua New Guinea, Colombia and Costa Rica — making Coffee By Design the most comprehensive roaster in the country, by her estimate.

“I’m excited about a coffee you can’t necessarily find easily,” Lindemann says. “But for every country we’re working with, there’s a tariff.”

There are domestic growers in Hawaii and Puerto Rico, but supply is limited and labor costs are high. Only 1% of the coffee consumed in the U.S. is grown here.

Bean prices are only part of the squeeze on roasters; costs for cups and other supplies are up, too, including recyclable bags, which are manufactured in Asia, though Lindemann buys from U.S. companies.

The cost of an espresso machine, she says, “is now practically the price of a car.”

Lead times on orders in many countries can be six months or longer, further complicating costs.

“In India, where we’re getting some incredible coffees, the price we committed to was considerably lower than the price we paid when the coffee landed here, after tariffs were levied in August,” Lindemann says.

Commitments to growers are binding for Lindemann; supporting farmers is a huge part of the company’s mission.

Delivery times have been extended, too, starting in 2023 when rebel attacks in the Red Sea complicated access to the Suez Canal. Shippers now reroute around the tip of Africa.

Lindemann is also seeing a slowdown in payment times from wholesale accounts, which total close to 700. The largest share of the business is located in New England, but she’s recently picked up accounts in New Jersey and sees expansion opportunities in New York.

Coffee By Design was founded by Lindemann and Alan Spear in 1994, and opened its first coffeehouse, on Congress Street.

In the past several years, Coffee By Design closed five cafes, including the Congress Street location, to focus more on roasting and the wholesale business.

“Doing retail is very expensive,” she says.

And like many businesses, Coffee By Design is still recovering from the pandemic.

“Prior to COVID, we were a $9 million business, then we dropped to $2.5 million,” she says. “We hope to be back up to $7.5 million this year.”

Non-negotiable expenses

Despite economic pressures, Lindemann pays her staff of 35 above-market wages. Baristas, who recently unionized, earn more than double the hourly state “tipped wage” of $7.33. With tips, Lindemann says they average $25 an hour.

“In New York City, baristas make much less. We were stunned at how little they’re paid,” she says. “And no benefits, which was even more shocking.”

Production staffers, who are not unionized, start at $20 per hour. All employees who clock 30 hours weekly also get benefits, including health insurance. The company covers 70% of premiums, matched 401(k) contributions and life insurance.

‘Doing business in Portland is very expensive’

Maine is a good state for coffee sellers, as consumption here ranks among the top 10 states. But Lindemann says doing business in Maine’s largest city is costly.

“It’s very expensive to run a small business in Portland right now. And with the tariffs, it’s like a perfect storm.”

Her building at 1 Diamond St. houses the roastery and a cafe. The building has a total of 44,000 square feet, but she leases half to Youngs Furniture. Under Portland’s recent revaluation, the assessed value increased by $1 million and her new property tax bill is $55,000 a year. She also pays a tax on equipment, chairs and tables.

“No small businesses are getting rich,” Lindemann says.

Growers grapple with climate change

A warming climate is making it harder for some growers to see a future in farming.

“We’re at a tipping point,” Lindemann says.

She fears they’ll plant more profitable crops such as eucalyptus, which leads to other environmental consequences.

Coffee By Design has gone so far as to front partial payment to one farmer, for three years, to ensure he can continue to grow coffee.

“The two biggest issues for coffee growers are climate change and money,” Lindemann says. “We need the consumer to understand that we have this incredible gift of coffee — and farmers need our support. You won’t have coffee if you don’t invest in the farmer.”

Customer base is expanding

On the upside, cafe traffic grew 30% this summer.

“We’ve never seen that before; it seemed to be visitors from around the country,” Lindemann says.

The customer base skews to well-educated women, particularly ages 55 and up.

Mail-order traffic has increased, too, especially in North Carolina and Atlanta. Lindemann attributes the bump to being crowned “Roaster of the Year” in 2020 by Roast magazine and being named a James Beard Foundation semifinalist for 2025.

To expand the product line, Coffee By Design recently launched a canned beverage, called 1994 Chilled.

Lindemann thinks the company’s core mission of supporting growers is a driver, too.

“Being a farmer-focused, woman-owned, Maine business; customers are responding to that and the fact that we’re investing in communities both locally and globally,” she says.

“I don’t like raising my prices. I want coffee to be affordable to all people. But we need to fulfill what we think is an important mission — supporting growers and giving back to our community in Maine.

“We don’t need a pat on the back, we just want to stay in business.”

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