Coffee drinkers could be rethinking the habit after learning their morning brew could cost as much as $10 by the end of the year.
Australian Restaurant and Cafe Association chief executive Wes Lambered warned the cost of a coffee “could reach double digits” in some capital cities due to the high price of beans.
“It isn’t unfathomable … in some CBD locations and airports,” he said.
Barista Courtney Blyth works in one of the few cafes in her outback town. (ABC Western Queensland: Peter Quatrocelli)
Suppliers and industry experts agree that prices must go up alongside the rising cost of beans, wages, power, and rent, but they differ on just how high prices will go.
The rising cost of doing business may also affect a coffee shop in a city mall differently from a country town cafe.
Kynda Cafe and Boutique at Longreach in Queensland’s outback is about as far from a CBD location as one can be.
Courtney Blyth says it is always a tough decision to increase prices for coffee. (ABC Western Queensland: Peter Quatrocelli)
But barista Courtney Blyth said the same problems remained with beans going up by $8 a bag in just six months.
“We’ve had to increase prices every year by $0.50 to a $1 just to compensate,” she said.
“It’s hard when businesses are suffering because we still have to pay staff and other suppliers … but it’s a hard decision to have to make.”
$4 flat white to go
Queenslander Tim Adams has built something of a coffee empire from his home base on the Sunshine Coast.
In 2009 he was named Australia’s top barista and is now a wholesaler, roaster, and cafe owner.
Tim Adams says a good coffee helps bring people together, which is “priceless”. (ABC Sunshine Coast: Owen Jacques)
Mr Adams said the days of the $4 flat white were almost certainly gone.
“We’re heading probably into that $8 to $9 category at some point in the near future,” he said.
The business owner said the jump in prices over the past two years was due to cafes having to fork out more for power, wages, milk, and other costs including taxes.
Tim Adams says coffee prices have to increase to ensure the industry can survive. (ABC Sunshine Coast: Owen Jacques)
What’s the right price?
Abdullah Ramay heads Pablo & Rusty’s Coffee Roasters in Sydney and believes he knows the right price for a small flat white — $5.50.
The head of Pablo & Rusty’s roastery and cafe in Sydney says price increases are necessary. (Supplied: Pablo & Rusty’s)
“What I want to see is a small flat white at a minimum of $5.50 without any additions,” he said.
“I would love to see that go to about $7 by the end of the year, just getting a bit closer to the global parity.”
He also pointed to the cost of a bubble tea, which is popular despite often selling for $6.50 or more.
Abdullah Ramay is chief executive of Pablo & Rusty’s. (Supplied: Pablo & Rusty’s)
Mr Ramay said, around the world, travellers could expect to pay between $8 and $9 for a small coffee.
“We also know that the customers are also feeling a lot of pinch, and they’ve been used to prices at a certain level,” he said.
“Any quick or sharp moves that double the price of the flat white won’t do customers any good or the cafes any good.”
Back on the Sunshine Coast, Mr Adams said few cafes would survive selling cheaper coffees and customers were often paying slightly more for a good reason.
Dedicated coffee lovers can order specialised coffee from Tim Adams’ cafe. (ABC Sunshine Coast: Owen Jacques)
He said when setting his own prices, he factored in the costs of ensuring that all those involved in producing a flat white — from the bean growers and pickers to the barista — were paid properly.
“Producers that were producing the green coffee for us were probably not getting paid as well as they should be,” he said.
“[We] made the decision to make sure that they were getting paid really well.”
Customers ‘unwilling to lose’ coffee
In its latest report on cafes and coffee shops in Australia, research firm IBISWorld found that more than 27,000 cafes across the country were facing down tough conditions, thanks to the nation’s “vibrant coffee culture”.
But it said the pockets of coffee drinkers were not bottomless.
“Many consumers consider coffee to be an affordable luxury they’re unwilling to lose,” the report found.
“However, consumers have reduced the number of visits they make to cafes and coffee shops.”
Rachael Willson charges $4.80 for a simple flat white. (ABC Capricornia: Karyn J Wilson)
Rachael Willson from the Humming Bird Cafe in Rockhampton said she charged $4.80 for a basic coffee, but her suppliers continually warned her that prices would go up.
She worried about what might happen if her cafe was forced to keep charging more to survive.
“If people want to still listen to our ridiculous jokes and look at our crazy smiles, well then hopefully they will pay $10, but I just don’t know,” Ms Willson said.
Many coffee drinkers are paying about $5.50 for a flat white across Australia. (ABC Sunshine Coast: Owen Jacques)
She said she had already noticed a trend of people buying coffee machines and buying the beans at her cafe to take home.
‘Priceless for mental health’
Mr Adams likened a coffee served by a cafe to a nice meal — a meal is cheaper at home, but customers pay for the quality, connection, and atmosphere.
“You go out to socialise, and you go out to have an experience,” he said.
“And I still think that going into a really nice cafe, no matter where it is, and grabbing a really nice cup of coffee and having a connection with a barista and the community around you — I don’t think you can put a dollar value on that.
“I think that’s priceless for mental health and it also creates good culture and good communities.”
The price of coffee is likely to go up across Australia. (ABC Sunshine Coast: Owen Jacques)
In Longreach, coffee drinker Kay Searles orders a half-strength cappuccino and does not worry about checking the price.
And while she would prefer to not pay any more, she admitted that her habit was not going anywhere.
“It’s worth it … I don’t drink [alcohol], so it’s my one thing.”
