Experts warn about potential breakfast staple cost increase—time to adjust your habits?
- Replies 27
For many Australians, the day begins once they've savoured that first sip of coffee.
It's a ritual that provides a caffeine kick and a moment of pleasure before the day's demands kick in.
However, this cherished routine might soon hit the wallet harder than ever.
Experts are sounding the alarm that the cost of your daily brew could rise significantly, with little relief in sight for the foreseeable future.
The global coffee market is experiencing a perfect storm of challenges driving up prices.
The demand for coffee continues to grow, but supply is struggling to keep up.
Severe weather events have wreaked havoc on coffee crops in key producing countries like Brazil, which supplies 70 per cent of the world's high-quality arabica beans, and Vietnam, which is responsible for 30 perc ent of the robusta bean market.
These disruptions directly impact the cost of coffee beans and, ultimately, the price of your morning cup.
The logistics of getting coffee to your local café have become more complex and expensive.
Dr Vinh Thai, a professor of logistics and supply chain management at RMIT, pointed out that the increasing cost of container shipping rates and other supply chain issues are significant contributors to the rising cost of coffee.
These increased costs may leave roasters with no choice but to pass them on to cafes, which may then have to increase the price for consumers.
This potential price hike comes as Australians already feel the pinch from the cost of living.
Dr Thai warns that the added financial pressure could negatively affect customers' lifestyles and may even lead to changes in coffee consumption habits.
Such changes could threaten the Australian coffee industry, which employs almost 70,000 people.
Abdullah Ramay, chief executive of Pablo & Rusty’s Coffee Roasters, noted that cafe owners face challenges.
Despite the rising costs, many cafes still charge less than what is considered a 'survivable' rate.
The dilemma is: Do they continue to sell coffee with little to no profit, or do they risk alienating customers with higher prices?
The sentiment is echoed by Lachlan Ward, chief executive of St Ali coffee roasters. Earlier this year, Ward made headlines by stating that Australians aren't paying enough for their coffee.
He argued that the future of independent cafes is at risk unless prices are adjusted.
The cultural significance of coffee in Australia cannot be understated, and price increases affect more than just the dedicated fans.
Casual drinkers also feel the impact, with some opting for cheaper alternatives, reducing their consumption, or switching to home brewing.
RMIT Associate Professor of Marketing Bernardo Figueiredo acknowledged this but believed that the demand for coffee would remain strong due to its social and lifestyle significance, particularly among younger demographics.
Interestingly, transaction data from digital payments platform Square revealed that Australians are already adjusting their coffee habits.
With the rise of hybrid work arrangements and the high cost of living, there's been a noticeable drop in pre-work takeaway coffee purchases on weekdays.
Conversely, weekend brunch hours are seeing an uptick in transactions.
Cafes adapt to these changes in various ways, such as introducing evening services, closing an extra day, or diversifying their offerings to include groceries and other goods.
Colin Birney, head of business development at Square Australia, notes that the trend towards working from home and packing lunches contributes to the decrease in demand for weekday breakfasts.
In other news, a café customer in Melbourne was taken aback by a 15 per cent surcharge added to the cost of his cappuccino on a public holiday, plus an extra fee for using his card.
The news sparked outrage on social media, with many questioning the reasoning behind such steep surcharges. You can read more about it here.
How will these changes affect your coffee routine? Are you considering brewing at home, or is the café experience too precious to give up? Share your thoughts and strategies in the comments below.
It's a ritual that provides a caffeine kick and a moment of pleasure before the day's demands kick in.
However, this cherished routine might soon hit the wallet harder than ever.
Experts are sounding the alarm that the cost of your daily brew could rise significantly, with little relief in sight for the foreseeable future.
The global coffee market is experiencing a perfect storm of challenges driving up prices.
The demand for coffee continues to grow, but supply is struggling to keep up.
Severe weather events have wreaked havoc on coffee crops in key producing countries like Brazil, which supplies 70 per cent of the world's high-quality arabica beans, and Vietnam, which is responsible for 30 perc ent of the robusta bean market.
Coffee prices in Australia are set to rise due to global demand, bad weather, and higher shipping costs. Credit: Shutterstock
These disruptions directly impact the cost of coffee beans and, ultimately, the price of your morning cup.
The logistics of getting coffee to your local café have become more complex and expensive.
Dr Vinh Thai, a professor of logistics and supply chain management at RMIT, pointed out that the increasing cost of container shipping rates and other supply chain issues are significant contributors to the rising cost of coffee.
These increased costs may leave roasters with no choice but to pass them on to cafes, which may then have to increase the price for consumers.
This potential price hike comes as Australians already feel the pinch from the cost of living.
Dr Thai warns that the added financial pressure could negatively affect customers' lifestyles and may even lead to changes in coffee consumption habits.
Such changes could threaten the Australian coffee industry, which employs almost 70,000 people.
Abdullah Ramay, chief executive of Pablo & Rusty’s Coffee Roasters, noted that cafe owners face challenges.
Despite the rising costs, many cafes still charge less than what is considered a 'survivable' rate.
The dilemma is: Do they continue to sell coffee with little to no profit, or do they risk alienating customers with higher prices?
The sentiment is echoed by Lachlan Ward, chief executive of St Ali coffee roasters. Earlier this year, Ward made headlines by stating that Australians aren't paying enough for their coffee.
He argued that the future of independent cafes is at risk unless prices are adjusted.
The cultural significance of coffee in Australia cannot be understated, and price increases affect more than just the dedicated fans.
Casual drinkers also feel the impact, with some opting for cheaper alternatives, reducing their consumption, or switching to home brewing.
RMIT Associate Professor of Marketing Bernardo Figueiredo acknowledged this but believed that the demand for coffee would remain strong due to its social and lifestyle significance, particularly among younger demographics.
Interestingly, transaction data from digital payments platform Square revealed that Australians are already adjusting their coffee habits.
With the rise of hybrid work arrangements and the high cost of living, there's been a noticeable drop in pre-work takeaway coffee purchases on weekdays.
Conversely, weekend brunch hours are seeing an uptick in transactions.
Cafes adapt to these changes in various ways, such as introducing evening services, closing an extra day, or diversifying their offerings to include groceries and other goods.
Colin Birney, head of business development at Square Australia, notes that the trend towards working from home and packing lunches contributes to the decrease in demand for weekday breakfasts.
In other news, a café customer in Melbourne was taken aback by a 15 per cent surcharge added to the cost of his cappuccino on a public holiday, plus an extra fee for using his card.
The news sparked outrage on social media, with many questioning the reasoning behind such steep surcharges. You can read more about it here.
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