Why Aussies are ‘tactically scheduling’ their $6.50 coffee runs
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Australian coffee lovers are clinging to their barista-made brews, despite the cost of the country’s favourite café beverage soaring over the past five years.
New data from NAB shows spending at cafés, restaurants, and pubs has risen 7.6 per cent over the past year, with hospitality accounting for one in every $10 spent.
Soaring coffee prices has seen a change in behaviour in Aussie coffee-lovers. Shamus Hart
Café and restaurant spending rose 2.9 per cent in May alone, outpacing overall consumer spending, which increased by 1.1 per cent.
But how Australians are spending that money has radically changed. Consumers are becoming far more selective about when and where they purchase their daily cappuccino or pub meal.
“Australians are still finding room for cafés and restaurants, even as budgets tighten,” NAB head of small business Victoria, Dario Medugorac, said.
Barista-made coffees have significantly increased in the past five years. Getty Images
“What we are seeing is more selective spending, and businesses that move quickly are the ones winning it.”
Coffee prices have increased by 37.5 per cent over the past five years, Torrens University reports, with the average cost of a barista-made coffee in Australia rising from $4.50 to $6.50.
While there has been speculation that coffee lovers are switching to tea to reduce their café spend, the price of a café-ordered tea has also climbed. A cup of English breakfast tea with milk and sugar has risen from between $3.50 and $4.20 five years ago to between $4.50 and $5.50 today. Prices stretch even higher for loose-leaf varieties, chai, or alternative milks.
The long-term outlook for the cost of a daily caffeine fix remains grim, amid separate industry speculation that a barista-made coffee could cost up to $12 within the next five years.
These soaring café prices have led to a surge in Australians making their favourite brews at home, though the grocery aisle has not escaped inflation either.
The cost of supermarket coffee beans has also significantly increased. Jo Abi
Prices for premium supermarket coffee bean brands such as Campos, Vittoria and Grinders has jumped by 30 per cent to 35 per cent over the past five years.
A 1kg bag of premium beans that once retailed for $38 to $45 in 2021 now regularly sits between $56 and $75 on Coles and Woolworths shelves.
Supermarket instant coffee jars have faced an even harsher surge, with retail prices jumping 30 per cent to over 50 per cent over the last five years.
A large 400g jar of Moccona or a 180g jar of Nescafé Gold could once regularly be found on standard shelf rotation for roughly $18 to $22 and $12 to $14 respectively.
Without a discount, that 400g jar of Moccona now carries a base price of $37.50, a mid-tier 200g jar sits at $23.60, and Nescafé Gold’s base price hovers around $20 to $22.
The cost of supermarket coffee beans has also significantly increased. Jo Abi
However, at home is still where switching to tea yields the biggest savings. Yorkshire Tea reports the average cost of brewing a cup of tea at home is just 10 cents.
The cost of supermarket coffee beans has also significantly increased. Yorkshire Tea
There is some hope on the horizon for bean supply. The USDA projects that four of the five largest global exporters – Brazil, Vietnam, Colombia, and Ethiopia – are on track to increase their output, while the World Bank forecasts that global Arabica prices will gradually decline into 2027 as supply normalises.
Whether those global wholesale shifts translate into cheaper prices at the local Australian register, however, remains to be seen.
