Here’s why your morning coffee costs more and why the price might keep rising
If your morning cup of coffee has left a bitter taste in your mouth lately, it might not be the beans, but the price that’s making you bitter.
- Coffee vendors say the price of coffee has risen 20-30% in the last 12 months
- The average price of an average basic coffee is around $5 across the country
- Coffee industry warns it could be 12-18 months before price drops again
The price of a flat white – and any coffee made in a cafe – has been pushed up not only by the cost of international freight and wages, but also by ancillary items such as the wholesale price of caramel syrup .
What is the average price of a coffee today?
Daniel Mejia of Colombia Coffee Co owns several cafes and is a coffee bean wholesaler on Queensland’s Sunshine Coast.
He said people should expect to pay between $4.50 and $5.50 for an average 250ml (8oz) coffee without fancy milk or extra shots of espresso.
“When you pay $5.50 for an eight-ounce coffee, the expectation you should have as a customer is that it’s going to be first-class coffee,” he said.
“You almost want to walk out of that store, relishing in the coffee you just drank.
“A coffee that used to be $5 is now probably $6.”
He said every element of coffee making is now more expensive: beans, electricity used to heat water, machine maintenance, milk and any milk alternative.
“But if you get a flat white with an extra hit of soy, with a hit of caramel, then the soy has gone up as well.
“The caramel shot that was 50 cents, is probably 70 or 80 cents.”
Perfect storm in your cup of coffee
Bruno Maiolo has run the Australian Specialty Coffee Association for 20 years and runs C4 Coffee in Melbourne.
He said $5 was the right price to pay for an average, average coffee that would have cost $3.80 a year ago.
But even though it was more expensive, the cafes still didn’t pass on the full cost.
“Just in terms of supply and trade issues, a cup of coffee should really be closer to $7 if everyone were to maintain the same margin they enjoyed before COVID.”
“[The price] will still climb. You have to because you have to pass on the costs. »
Mr Maiolo said many factors both globally and in Australia come together to drive up the price of a barista-made cappuccino.
He said the biggest contributor was COVID, which not only forced farms in many countries to close, but also caused a large number of deaths, which impacted their workforce.
When beans were sent around the world in a shipping container, that too cost more.
Mr Maiolo said the cost of transporting a container had increased sixfold, from $2,500 to around $15,000.
In addition to these factors, Brazil – a major coffee-growing region – suffered a massive frost last year, which resulted in fewer beans being picked.
With increased demand and less grain, the price went up again.
Mr Maiolo said none of these factors were likely to resolve any time soon.
“The price will stay high for some time, at least the next 12 to 18 months, before we can start to get back to some sort of normalcy in terms of freight and logistics,” he said.
Making coffee “more than a business”
Back on the Sunshine Coast and Mr Mejia said while he felt he had no choice but to raise the price of his coffee, it was a painful decision to make.
He said the survival of his business wasn’t the only thing on his mind.
“Coffee is the social lubricant that keeps people moving and connecting with each other.
“We’re the stewards of that, and we’re taking that role beyond our business and more of a community role.”