The beginning of 2014 saw the coffee industry duly warned about an Arabica bean shortage and the impending price rise. In turn, consumers have received subtle hints by leading brands about having to fork out more cash for their favorite beverage — which have come quite true by the middle of the year.

At the root of the crisis lies the crop damage in Central America where a leaf disease called "roya" has severely affected the crop lives as well as quality. Deliveries and shipments have been affected, and more demands have been placed on high-quality beans from Colombia, which has added to the higher costs. As a result, for the first time since 2011, large retail brands like Starbucks and Maxwell House have been forced to raise their prices.

Price rise is never a welcome phrase for marketers. Even though prices rise around us all the time, smart marketing tactics more or less ensure our compliance. It is interesting to see how the coffee giants and not-so-gigantic brands are planning to handle this new twist in their tale. Some of the latest developments in the industry show us that innovation is indeed the master of the game and one that is fueling the coffee wars to new levels.

Take, for instance, one of the latest offerings by Starbucks: the new Starbucks Iced Coffee. The tagline for the product says that it is specially brewed to fit consumer preferences when they customize their coffee experience at home.

With more than 20,000 stores all over the world, Starbucks has redefined the way we drink and think of coffee in many ways. With their innovative offerings in products as well as customer service, they have aced the charts this year as well. The latest earnings report has beaten the expectations of analysts, and the company has claimed their fourth-quarter earnings will see higher growth.

In June, Starbucks announced a price increase for both its retail offerings and packaged goods for the first time in almost four years. At the same time, they have also said that it's not going to be a steep hike as they do not want to deter buyers. Instead, they are focusing on innovative new products that will expand their portfolio of offers, not just for existing customers but also for attracting newer clientele.

Earlier in June, Kraft Foods Group Inc., the umbrella brand behind Maxwell House and Yuban coffee brands, declared an almost 10 percent price hike. And J.M. Smucker Co., the master brand for the popular Folgers and Dunkin' Donuts, announced a 9 percent hike.

The latest in the line is Keurig Green Mountain, which announced last week that their prices will see almost a 9 percent increase as well. They played a wait and watch to see how their competitors were tackling the industry fluctuations but eventually realized that lower prices are not going to help them survive the crisis in the long run.

For these big brands, the strategy has been to assure greater products and higher quality despite the price rise. But what the not-so-big brands are doing at this juncture will probably shape the future of the industry.

It is estimated that more than 60 percent of Americans drink coffee every day and spend almost $32 billion on coffee every year. With that kind of figure to play around with it is no wonder that industry players, both big and small are scrambling to manage the shortage and price crisis.

Entering this battlefield is specialty coffee. In an instant, craft coffee change the expectations of buyers with the lure of something better or more exotic, something that is markedly different from what the giants are offering.

Smaller players have been faced with a dilemma with the markets getting more volatile every day. They know that prices will have to go up, but they also know they cannot survive against the big names by simply increasing price. So they have focused their efforts on coming up with specialty offers that will lure in the crowd despite the higher cost.

The leading name in this category is North Carolina-based craft coffee wholesaler Counter Culture, which roasts around 2 million pounds of coffee every year and sells it to retail outlets as well as dining establishments. Then there are specialty cafes like Stumptown Coffee, which offers a personal touch as opposed to the generic brand experience that most people get from the giant chains.

But more than that, these companies are offering customized coffee and unique products through their independent roasting process. They are selling the fact that they are a roasting company first, so their coffee will have something different and therefore more value to offer.

Small as they are, these players are slowly becoming a force to reckon with in the ongoing coffee wars as they have already bagged a 37 percent market share for coffee consumption in the U.S. So even with the coffee prices going up by 40 percent this year, coffee lovers are not in for disappointment. With innovative offers from both big and small names, they are in for a richer and more varied coffee experience than ever before.