Some trends are fleeting. Others stick around for the long haul. But, only a select few are industry‑defining. Over the last few years, we’ve noticed two prominent trends in the coffee industry that — when seen together — signal a major shift in how coffee companies operate and reach customers:
1. Coffee shops are increasingly adding micro‑roastery operations.
2. Customers are on the hunt for locally‑made, unique, and sustainable coffee products.
These revolutionary shifts in café and consumer behavior aren’t mere trends—they’re ushering in the next generation of the coffee industry.
Adding roasting operations to a café changes the flow of the coffee industry as we know it. And consumer demand for local, sustainably‑made products fundamentally changes how coffee companies can satisfy that need.
These significant café and consumer changes indicate that the fourth wave of specialty coffee will focus on sustainable micro‑roasters dedicated to roasting high‑quality, exclusive coffee products in‑house.
And that wave has already begun.
Coffee’s 4th Wave: A Spotlight on Sustainability and Product Differentiation
The coffee industry’s recent history can be broken down into three waves or movements.
The first wave occurred in the early 20th century as coffee was sold and consumed in bulk quantities. The second wave began in the late 1980s and focused on slightly higher quality coffee, drink customization, and the “third place” coffee shop environment. The third wave in the early 2000s honed in on the artisanal aspect of coffee roasting, brewing, and drinks.
Now, there is a debate over the fourth wave of coffee: Is it here? Has it already happened? What’s it all about?
We believe the fourth wave of coffee will see coffee shops differentiating themselves through sustainably‑focused coffee roasted in‑house.
A recent study conducted by First Insight and the Baker Retailing Center of the University of Pennsylvania discovered that 68% of surveyed consumers were willing to spend more on a sustainable product. That same study also found that the top four concerns among shoppers were product quality, environmental sustainability, value, and brand authenticity.
Another study from the Capgemini Research Institute had similar findings, reporting that 79% of consumers
are changing purchase preferences based on the social or environmental impact of their purchases. Research from Deloitte also confirms that sustainability plays a major role in a customer’s purchasing habits, with 56% of respondents
stating that they deem a product sustainable if it is responsibly sourced or harvested
Owning the roasting process enables café owners to incorporate sustainability initiatives into every aspect of the coffee experience, from sourcing to roasting to brewing. This approach stands in stark contrast to coffee shops relying on wholesale suppliers or roasting coffee with gas‑powered equipment—and it opens up opportunities for customer connection, reduced environmental impact, and increased sales.
The Micro‑Roastery Future Is Well Underway
Coffee’s previous waves saw the segmentation of coffee roasters and cafés. Previously, coffee roasters focused on wholesale relationships or direct‑to‑consumer sales opportunities at markets or online. Although plenty of coffee roasters opened cafés, it was rare for coffee shops to take the leap into roasting after years of brewing someone else’s beans.
Now, in coffee’s fourth wave, more coffee shops will embrace roasting coffee in‑house in order to fully live out their sustainability and quality values.
Think of everything coffee shops are concerned about:
Carving out a competitive advantage
Cutting expenses and increasing margins
Increasing coffee quality, consistency and freshness
Developing lasting relationships with customers and the local community
Accomplishing sustainability goals
Increasing revenue year after year
Transitioning to a micro‑roastery not only accomplishes these goals, but also positions the industry at large for a sustainable future.
Let’s break it down.
Today’s coffee customers have more choices than ever before. Between corporate coffee chains and brew‑at‑home technology, it’s important to carve out an advantage over the competition.
Some coffee shops compete on brand name alone. Others focus on signature drinks and an aesthetically‑pleasing atmosphere. As consumers shift to a more sustainably‑minded focus, more coffee shops will adopt eco‑friendly roasting practices to provide customers with high‑quality coffee.
Increasing Coffee Quality and Consistency
We frequently hear stories of coffee shops jumping from wholesale supplier to wholesale supplier, frustrated with shaky consistency and quality. It can be disheartening to build a business you’re proud of, then end up with zero control over the quality and consistency of your core product.
Roasting in‑house can be a great way to take ownership of coffee quality
. Our friends at Latitude Coffee put it well
when they told us about repeated quality issues with their wholesale partner, and how they solved that problem almost overnight:
"It is the best thing you can do for your business to control your product on the coffee side period. Bellwether gave us an entrance to this avenue, and to these great people who know about roasters, and who know about roasting, so I can produce excellent results right off the bat.”
In addition to flavor quality and consistency, roasting gives you control over when and how often you roast, which translates into freshness control for the coffee.
Much like everything these days, the price of roasted coffee is increasing— margins are only getting tighter. Bringing the roasting process in‑house can cut coffee costs by 30‑50%
Plus, eliminating the need for a wholesale coffee supplier enables coffee shop owners to take control over the entire roasting process—and fine‑tune sourcing, roasting, and packaging costs to best meet budgetary needs.
Developing Customer and Community Relationships
Customer loyalty is driven by customer emotions. Studies have shown that emotionally‑engaged customers spend almost twice as much
on companies they are loyal to. And there’s no shortage of anecdotes about how starting to roast led to a spike in customer loyalty and spend.
“I’m selling 3x more coffee and bags than I was before. The response has given us more confidence, especially behind our own brand that we’ve worked so hard for. I’m proud of it. I’m super proud of it.”
— Brian McLaughlin, Seabird Coffee
Roasting coffee on‑site fosters a lasting relationship with individual customers and the community at large. When customers know the coffee they’re about to drink is roasted fresh on‑site, they create an emotional connection between the coffee beverage and a café’s brand identity. As a result, they’ll come back time and time again for coffee quality and flavors they know they can trust.
Accomplishing Sustainability Goals
If a café’s core business values include environmental sustainability
, every element of owning and operating a coffee shop must be dedicated to achieving these goals. Otherwise, the business can be accused of greenwashing
Bringing the roasting process in‑house may seem daunting and contradictory to one’s sustainability goals. And if a shop were to use traditional gas‑powered coffee roasting equipment, that would be correct.
But coffee roasters with a fully ventless and electric design, such as the Bellwether Roaster, offer an eco‑friendly path to roasting exceptional coffee in‑house—and have been proven to reduce the carbon footprint of roasting by up to 87%.
By carving out a competitive advantage, cutting expenses, developing customer relationships, and accomplishing sustainability goals, coffee shops are positioned for prime sales opportunities—all by switching to roasting coffee in‑house.
The 4th Wave of Coffee Has Already Started
We’ve seen similar movements happen in other industries.
Take the craft beer market, for example. Around 2012, the number of breweries operating in the United States began to grow. According to the Brewer’s Association
, America went from 2,670 breweries in 2012 to 9,247 in 2021.
What caused this nearly threefold increase?
“At the end of the day, the craft‑beer movement was driven by consumer demand,”
Bart Watson, the chief economist at the Brewers Association, explained when speaking with The Atlantic
in 2018. “We’ve seen three main markers in the rise of craft beer—fuller flavor, greater variety, and more intense support for local businesses.”
Additionally, these microbreweries were in direct opposition to the corporate giants that controlled most of the industry. Due to the economic recession of 2008, customers were more inclined to support local businesses brewing exceptional beers. The economic state at the time caused consumer demand to shift toward supporting small, locally‑owned businesses rather than the massive corporations dominating the rest of the market.
We’ve already seen a similar shift happen in coffee.
Coffee’s second wave defined the need for a third place—a branded chain customers could go between home and the office. The third wave emphasized the industry’s craft and locally‑owned coffee shops. The fourth wave will continue to combine place and craft while shining a spotlight on customers’ desires for product differentiation and sustainability.
Let’s check out two coffee shops already putting this idea into practice:
Founding Farmers ‑ Washington, D.C.
is a farmer‑owned restaurant group and grocery market based in Washington, D.C. Since 2005, the company has championed the values of farm‑to‑table meals and sustainable and equitable food systems. Although their coffee was sourced from a local specialty coffee roaster, they knew bringing roasting in‑house would better fulfill their commitment to sustainability and ethical sourcing practices.
Latitude Cafe ‑ Germantown, Wisconsin
originally partnered with a local coffee roaster. However, they quickly realized they needed a better competitive advantage to differentiate themselves from the many coffee shops in the area. Roasting coffee in‑house was a natural next step.
But installing a traditional gas‑powered roaster wasn’t an option — learning to roast on a gas roaster would take too much time that Latitude’s team needed for other coffee shop duties. After some research, Latitude found the Bellwether Roaster’s easy installation and quick learning curve to be the roasting solution they were looking for.
Once the roaster was installed and operational, customers began to take note of the freshly roasted coffee. Daniel Levy, the owner of Latitude Cafe, explains.
“People love our coffee today. Every day, there's a conversation about how good it is, how there's nothing like it, and there's a wow factor for them.”
This new real‑time connection to the coffee elicited an emotional response from customers, which translated to increased sales of 30% more year‑over‑year.
Embrace Coffee’s 4th Wave
The fourth wave of coffee is already here. Roasted coffee revenue is expected to increase to approximately $83.6 billion by 2025
As the market becomes more and more populated, it will be increasingly important to differentiate your coffee business from the competition.
Customers are seeking locally‑made coffee products that adhere to eco‑friendly initiatives. Before you know it, most coffee shops will be roasting in‑house with a fully electric roaster. Join the movement now to stay ahead of the curve!
The Bellwether Roaster enables cafés, restaurants, and hotels to sustainably roast exceptional coffee in‑house, thanks to its eco‑friendly electric and ventless design.