Trump tariffs add to woes for coffee shops

The price of their most important raw material — roasted coffee beans — has risen by close to 10% this year due in part to new tariffs, but there’s another number that is haunting Brothers Cortado in Concord: 1.7%.

That’s the operating margin due to rising costs and stagnating sales in a suspect economy, said Whitney Noyes, an advisor to the 4-year-old shop.

The margin has fallen by about 9 percentage points, she said, and “is not enough to make investment.”

Noyes and shop co-owner Chuck Nemiccolo met earlier this month with U.S. Sen. Jeanne Shaheen, who was making a tour of the state to discuss the impact of President Trump’s tariffs.

A coffee shop was an obvious stopping place because Trump imposed a 50% tariff on products from Brazil, among the biggest coffee importers to the U.S., as part of a rift over economic policy. Coffee prices are rising and expected to rise further as a result.

At the Milford Food Co-Op, General Manager John Belanger said he has seen costs go up, particularly from national producers like Equal Exchange. The increase is noticeable even among a general rise in food prices.

“Coffee has been the sharpest increase so far,” he said, adding that local roasters, which buy whole beans and turn them into ground coffee for consumers and coffee shops, have raised their prices less.

Brothers Cortado gets its coffee from Rare Breed roasters in Nashua, which has raised prices 5 to 10% this year. Nemiccolo said Brothers Cortado has avoided raising its own prices so far, but that may not last.

“The customers are aware, I think, a lot of them, that it’s only a matter of time before the shoe falls — and not only on us,” he said.

Nemiccolo said it was particularly frustrating to pay extra costs of tariffs — which are supposed to prod domestic production by hurting imports — on a product that grows in the tropics.

“Tariffs are supposed to be for things that we can make in this country. We cannot make coffee in this country. We can in Hawaii, but that’s a very small percentage of what we need,” he said.

During her meeting at Brothers Cortado, Shaheen said she had heard similar concerns from other industries, pointing to Colby Footwear in Rochester, which made shoes a half-century ago but now distributes them. “Shoe manufacturing is not coming back to New Hampshire” because of a lack of facilities and workers with the right skills, she said.