The coffee industry has always been competitive. In a market dominated by multinationals and large chains, specialty roasters and coffee shops strive to differentiate and position themselves as the higher-quality alternative.

It’s challenging to say the least. An estimated 62% of specialty coffee shops close within the first five years of business, while key players capture most of the market share. Global specialty coffee consumption grows year-on-year, but still remains a small segment of the wider industry.

Logistical challenges and price volatility also make it difficult to manage increasingly tight margins. So in the wake of near record coffee prices and rising inflation, a small but growing number of roasters are choosing collaboration over competition.

During times of economic uncertainty, partnering with competitors on collaborative releases and long-term strategic partnerships can be a smart business move. Miranda Caldwell, founder of The Coffee MBA, explains why it has the potential to reshape the landscape of specialty coffee.

You may also like our article on why roasters can’t rely on coffee price drops.

A new era of collaboration?

In the years following Covid-19, navigating the coffee market has become increasingly tough. In July 2021, severe cases of frost hit some of Brazil’s growing regions – causing the C price to skyrocket. 

A number of interconnected issues – including supply shortages and unfavourable weather conditions in major producing countries – mean prices have remained consistently high. In July 2024, New York arabica futures hit US $2.49/lb, nearly their highest level in decades. London robusta futures also reached a record US $4,971/tonne, and show no signs of dropping any time soon.

Perhaps to discreetly manage these supply chain challenges, several prominent specialty coffee roasters have recently engaged in collaborations, signalling a shift away from competition with one another.

US specialty roaster Counter Culture partnered with South Korea’s Fritz Coffee Company on the limited-edition Gemini blend. The two “like-minded” roasters exchanged green coffee from their suppliers to celebrate their “shared commitment to excellence” and co-develop a blend that brings together two distinct, yet mature, coffee cultures.

Similarly, in 2023, Onyx Coffee Lab teamed up with Australian-American specialty roaster Proud Mary on The Duet blend. As the name implies, both roasters combined their expertise to create a coffee that celebrates “doing more things together in this industry that we all love”.

So why now?

Collaborations aren’t new to the coffee industry. Actors, athletes, and musicians have long partnered with companies to co-develop products, or even launch their own brands. Collaboration between roasters, on the other hand, is considerably less common.

The above examples highlight a growing trend where collaboration is becoming a strategic choice for roasters looking to innovate and expand. But why are these partnerships becoming more popular now?

One prominent reason is the increasing difficulty and cost associated with innovation, particularly when trying to expand into new markets. Like many others, the specialty coffee industry is facing significant challenges related to price volatility and inflationary pressures. 

These economic factors make it risky and expensive for individual roasters to invest in product development or market expansion on their own. But through collaborative partnerships, roasters can share the financial and operational burdens of innovation, and launch new products without bearing all the risk themselves.

Miranda Caldwell founded The Coffee MBA business education platform in 2022. She has also worked for several prominent US roasters, including Verve, Counter Culture, and Madcap. 

“Specialty coffee has to start thinking like ‘big business’ in order to stay relevant in the market,” she explains. “I would argue that it’s much better for the industry if these companies join hands to stay competitive.”

Collaborations enable roasters to capitalise on each other’s success, rather than compete directly. This approach not only minimises the competitive edge, but also creates a more dynamic and innovative market where consumers benefit from the combined expertise and creativity of multiple brands.

“It’s a joint venture that allows for many things: market testing, revenue boosts, and new market opportunities,” Miranda adds. “There’s new merch, audience engagement, and cool product activations. It’s not just fun for the companies involved, it’s also exciting for consumers who can try new things.”

Embracing partnerships in a growing global market

Another factor driving the popularity of collaborations is the growing challenge of retaining brand loyalty, especially as specialty coffee becomes more globalised. 

When trying to enter new or unfamiliar markets, roasters are likely to find more success partnering with local roasters rather than competing with them. This strategy allows them to leverage the reputation and expertise of their foreign counterparts, while also offering something new to their customers.

As part of its ongoing Origin Roaster Collab project, the UK’s Square Mile recently partnered with Building Coffee in Ho Chi Minh to release its first-ever Vietnamese coffee. The collaboration offered consumers two unique perspectives on Vietnamese coffee – one from a producing country and the other from a majority-consuming market. Essentially, this creates a customer experience which neither brand could have accomplished alone.

Miranda suggests that this approach is similar to strategies employed by multinationals, where joint ventures are used to test new markets before committing to full-scale operations.

“Once it becomes clear that a market is a good fit for a business, you create a mutually beneficial partnership while opening doors to new consumers,” she says.

In July 2024, Onyx Coffee Lab and Dutch brand Manhattan Coffee Roasters announced their “International Roasting Cooperative”. Both companies emphasised how the cooperative underscores their “aligned values in terms of quality sourcing ethics, meticulous roasting, and stringent quality control standards”.

More importantly, the partnership allows both brands to expand their distribution networks and reach new customers across the globe. This is an arrangement that can better assist future expansion plans into new international markets.

“There are so many benefits to this kind of collaboration. ‘Stronger together’ is a real phenomenon,” Miranda says. “Not only do you open up your products or services to a wider audience, you increase distribution potential and, in some cases (depending on the arrangement), make use of economies of scale.”

Is collaboration the future for specialty coffee?

Looking ahead, it’s likely that collaborations will continue to play a significant role in the specialty coffee industry. As Miranda points out, roasters are increasingly forced to rethink sales strategies to stay relevant and competitive.

“Are you selling coffee, or are you selling a lifestyle, an experience, a service, education, exclusivity? There are deeper layers that only the most innovative companies have uncovered,” she says. “Nespresso beat us on convenient ‘luxury’, so where is the white space that nobody is yet serving?”

Collaborations provide a powerful tool for capturing market share and consumer attention. By teaming up, roasters can create new and exciting offerings that go beyond what they could achieve alone. This trend is not unique to coffee, however. Other industries – such as craft beer, fitness, and fashion – have seen similar success with collaborative ventures. 

“I think collaborations could be particularly successful for coffee if we start thinking outside of the box,” Miranda notes. “Fishwife collaborated with Talea to make a beer. How do beer and fish go together? Creatively – think strange and unique.”

An (un)even playing field

For established roasters like Onyx, Proud Mary, and Counter Culture, reputation alone could guarantee long-term success with new collaborations. However, it remains to be seen whether these partnerships will work as well for lesser-known roasters.

Irrespective of this, collaboration offers a way for small and large coffee brands to navigate the challenges of a competitive and rapidly changing market. The growing trend of collaboration among specialty coffee roasters reflects a broader shift in the industry’s approach to competition and innovation. Ultimately, it shows that there’s safety in adopting a more collaborative approach – rather than trying to compete in an increasingly volatile market.

“We may not know what is happening behind the scenes. In the corporate world, this could be the first step toward an acquisition or merger,” Miranda concludes. “But if you believe that rising tides raise all ships, then we should embrace collaborations in specialty coffee.”

As specialty coffee roasters continue to face market volatility and logistical challenges, collaborations may become the norm rather than the exception. This could reshape the landscape of specialty coffee for years to come.

By partnering with one another, roasters can find new ways to expand their reach, share resources, and offer consumers unique and exciting experiences. But is this also part of the wider trend of market consolidation in specialty coffee? Only time will tell.

Enjoyed this? Then read our article on how roasters can plan their menus when prices rise.

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