How the weather in Vietnam is pushing up the price of a Sydney cafe coffee

Coffee-loving Sydneysiders are paying more for a flat white with even the biggest chains charging upwards of $4 for a basic cuppa. Want the cost to come down? Here’s why you should be praying for rain.

Coffee-loving Sydneysiders should hope rain is on the forecast 7000 kilometres away in Vietnam, industry experts say, to bring an end to the soaring cost of a cuppa.

The cost of a standard coffee is pushing past $5 at many Sydney cafes as owners grapple with increasing labour, utility and supplier costs, and even international giant McDonalds is charging $4.15 for their smallest size. However, a select few independent roasters are riding out the rising bean prices to offer Sydneysiders a cheaper alternative.

Business has never been better for French patisserie Cafe de La Fontaine in King’s Cross after they refused to raise the price of coffee, charging $4 for a regular cappuccino, latte or flat white.

French patisserie Cafe de La Fontaine’s owner Stephanie Onisforou. Picture: Justin Lloyd

Owner Stephanie Onisforou, daughter of millionaire property investor and retail tycoon Theo Onisforou, absorbed the increases and is now seeing customers come back for a second or third coffee – or spend the dollars they saved on a croissant or eclair instead.

“As our cost were going up we saw people increasing around us but for us, servicing our customer was most important,” she said.

“When you have a business where customers are really loyal to you, for us it’s really important to be loyal to them.”

In Sans Souci, coffee connoisseurs need not stoop to a $2 brew from 7 Eleven to pinch pennies, with Sandringham’s SoBe Cafe keeping the cost of a small coffee to $3 (or $4 for a large) something owner John Theo said is a “beacon of light” for the customers who kept his cafe open through the pandemic.

Mark Theodorakakis, of SoBe Cafe in Sandringham, where they sell a $3 coffee. Picture: Justin Lloyd

“We’ve absorbed price rises on milk, packaging and worker costs. It’s been hard. Our margins are extremely low but it’s not about money, it’s about building community,” he said.

“People remember that you were there for them when they needed you and they show their love in return. I think we need businesses doing a bit more of that these days!”

Australian Coffee Traders Association chairman Joe Taweel said the rising costs are due to drought conditions in the world’s major coffee-growing regions – Vietnam, where 30 per cent of the lower-quality robusta beans are harvested, and Brazil, home to 70 per cent of the high-quality arabica market.

Coffee “still only $4.00” – an inviting sign for cash-strapped Sydneysiders at Cafe de la Fontaine, in Potts Point. Picture: Justin Lloyd

Mr Taweel, who has traded in coffee for 14 years, said while Aussies usually drink Arabica, and the “outlook is good” as the cold season comes to an end in Brazil, an increase of $2 per kilo over the past 200 days in Royal Green beans has been inflated by the difficult conditions for the robusta variety popular in the US and Europe.

Cafes are in a “tough” position, he said.

“You can’t pass on the full $2 otherwise you’ll have no customers when the prices come down.”

Abdullah Ramay, CEO of Pablo & Rusty’s Coffee Roasters which supplies coffee to several hundred cafes, said despite the recent cost to consumers, cafes are still charging less than the “survivable” rate, and a fraction of what coffee-lovers in many parts of the world pay.

“Cafes are really between a rock and a hard place – do you keep selling coffee with no profit? Coffee cannot be a loss leader for small operators – bigger players can do that, but you can’t keep getting busier and broker faster,” he explained.

“Why should Sydney, which has one of the best coffee cultures in the world, have a coffee price cheaper than all the major cities in the world?”

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