The beloved morning coffee ritual could become a more costly indulgence as experts in Australia’s coffee industry predict significant price increases for a cup of brew. Rising costs across the supply chain, from beans to baristas, are putting pressure on businesses and leading to speculation that coffee prices might soar to double digits in some areas by the end of the year.
Why Coffee Prices Are Climbing
Wes Lambered, CEO of the Australian Restaurant and Cafe Association, cautioned that coffee prices in urban centers, particularly CBD locations and airports, might reach $10 a cup. The trend is attributed to a combination of rising costs for raw materials, wages, power, rent, and taxes.
Suppliers and industry leaders acknowledge the inevitability of price hikes but differ on the magnitude. The rural vs. urban divide also plays a role, with regional cafes like Kynda Cafe in Longreach, Queensland, feeling the pinch despite being far from metropolitan price tags.
Barista Courtney Blyth shared her struggle, revealing that her cafe has had to raise coffee prices incrementally each year, as the cost of beans surged by $8 per bag in six months. “It’s a hard decision, but it’s necessary to sustain the business,” she said.
Flat Whites to Break $4 Barrier
Tim Adams, an award-winning barista turned entrepreneur, highlighted that the days of the $4 flat white are likely gone. Prices at his cafes on the Sunshine Coast have already risen in response to increasing overhead costs. He predicts a move toward $8 or $9 for a standard cup in the near future, reflecting the growing expenses for wages, milk, and other essentials.
Similarly, Abdullah Ramay, head of Pablo & Rusty’s Coffee Roasters, suggests that $5.50 should be the minimum price for a small flat white, with a potential increase to $7 by year’s end. He points out the international norm of paying between $8 and $9 for coffee, adding that the industry must balance fair pricing with customer expectations.
Affordability Meets Indulgence
Despite rising prices, Australians remain deeply attached to their coffee culture. IBISWorld research shows over 27,000 cafes are navigating the challenging landscape, with many consumers reducing the frequency of their visits rather than giving up coffee entirely.
For some, like Rachael Willson of the Humming Bird Cafe in Rockhampton, the challenge lies in ensuring prices stay manageable while maintaining business viability. Others are noticing a trend toward customers investing in home coffee machines, choosing to brew their own while purchasing beans from local cafes.
The Social Value of Coffee
Beyond caffeine, many see the coffee ritual as a cornerstone of community and mental well-being. “A cup of coffee isn’t just about the drink itself,” noted Adams. “It’s about the social connection, the atmosphere of a great cafe, and the cultural value it adds.”
For customers like Kay Searles in Longreach, the price of her half-strength cappuccino is a small cost for a cherished daily habit. “It’s worth it,” she said, likening coffee to a personal indulgence in lieu of alcohol.
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