The Rising Cost of Coffee: What You Need to Know
Introduction
A cup of joe is part of Australian daily life. But while it’s now a regular occurrence to fork out $6 for your flat white, it might be about to get even worse.
The Surge in Arabica Bean Prices
Arabica beans have surged to their highest price in 27 years, as supply issues mount among producing nations, leaving suppliers, cafes, and consumers to feel the pinch.
Arabica coffee, the most widely consumed type of coffee in Australia and the world, makes up 60 per cent of the world’s coffee production.
- Robusta coffee beans account for the rest of commercial coffee production, with differences in flavor, caffeine content, and growing regions.
Prices for the arabica bean climbed to US$3.03 a pound (454g), passing $3 for the first time since 2011, with prices soaring by more than 60 per cent this year.
Impact on the Coffee Industry
The world’s biggest coffee producer, Nestlé, forecasts further price increases due to high temperatures and limited rainfall compromising harvests in Brazil.
Key global coffee producers include Brazil (36 per cent), Vietnam (11 per cent), and Colombia (8 per cent).
Analysts predict that arabica prices will continue to rise to ensure global supply is maintained in the coming months.
Challenges for Businesses
As cost pressures rise, businesses like Xpressomondo in Melbourne are facing challenges to maintain profitability without alienating customers.
Nestlé emphasizes the importance of maintaining quality and supporting farmers despite rising costs.
The Future of Coffee Consumption in Australia
Coffee is ingrained in Australian culture, with 75 per cent of the population enjoying at least one cup a day, according to McCrindle Research.
Australia is the 10th largest importer of coffee globally, with significant consumption per capita ranking eleventh in the world.
Shortages in the coffee supply chain are expected to have worldwide impacts, affecting even the biggest coffee consumers.
Conclusion
As the cost of coffee continues to rise, consumers may need to adjust to higher prices to support the sustainability of the industry from farmers to cafes.
FAQs
How much coffee does Australia drink?
- 75 per cent of Australians enjoy at least one cup of coffee per day.
- Australia imports about 132,000 tonnes of coffee annually.
- Australian consumption per capita ranks eleventh globally, with 4.5kg of ground coffee consumed per year.