Your morning coffee could soon hit $12: Why Gold Coast cafes are feeling the heat
‘Expenses are going to get out of control’: With bean prices skyrocketing, experts say Queensland cafes are in for a wake-up call. Here’s what it means for your daily caffeine hit.
Gold Coast
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A cup of coffee is tipped to push $12 by the end of 2025, driving 30 per cent of Queensland cafes to the wall.
Essential Coffee NZ and Australia CEO Todd Hiscock said coffee beans were under increasing demand while producers struggled with massively depleted supplies, sending prices through the roof.
“There’s a widely held view in Australia that coffee is currently being sold for up to 50 per cent below what it should be,” Mr Hiscock said.
“Severe drought and then heavy rains in the biggest coffee bean producing areas in the world have catapulted the price of coffee beans to their highest level on record.
“It’s simple economics – supply and demand.
“I predict that in the next 12 months the price of a cup of your favourite brew will rise to around $10 to $12 a cup and the skyrocketing cost of beans will likely force 30 per cent of Queensland’s cafes to close.”
He said the price for Arabica beans, which accounted for most global production, recently topped $3.44 USD ($5.55 AUD) a pound (0.45kg).
The cost of Robusta beans, the next tier of bean quality, hit a fresh high in September.
“That’s a massive 80 per cent increase this year,” he said.
“Even global companies like Lavazza and Nestle have indicated they are poised to lift their prices significantly.
“The costs that go into making a cup of coffee include milk, beans, labour, cost of cup, rent, electricity, cleaning, insurance etc.
“Cafes work on a skinny margin and will have to pass on the price. It’s not sustainable to do otherwise.”
Rafiki Cafe owner Tobias Diamandopoulos has been in the industry for 16 years, but admits the current challenges are some of the toughest he’s faced.
While he hasn’t yet raised coffee prices at his Mermaid Beach cafe, he said it’s only a matter of time.
“Eventually, we’ll be pushed to have to up our prices,” he said.
He said his focus will be on changing other parts of the business first, so he can keep his coffee competitive.
“I try and work the rest of the menu first to see where there’s room to make a saving before going to that daily cup of coffee that everybody has,” he said.
Mr Diamandopoulos said the rising costs will put immense pressure on Gold Coast cafes.
“It breaks my heart but unfortunately these expenses are going to get out of control for some people and it’s going to be very hard to survive that.
“There’s so many hidden expenses for cafe owners, and people just see prices increasing on menus and think people are just getting greedy, but at the moment it’s tougher than ever to do business.
“Everything is costing more and more, and none of the cafe owners want to be upping the prices because it does deter customers.”
Hot Shott Cafe owner Jenna Rolfe said her biggest concern is higher prices will push customers to brew their morning coffee at home.
“We have to put the price up to survive, but we can’t put it too high that people don’t come, and that’s the game we play,” she said.
She has already had the tough conversation with her supplier, Supreme Roasters, and said an increase in coffee prices is inevitable.
“They’re copping as much of the increase for as long as they can, but at the end of the day, they’re running a business,” she said.
“They’re expecting it (the price) to jump phenomenally, in which case my coffee roaster will be putting up our price of coffee per kilo and we go through about 150kg a week.”
Ms Rolfe said she plans to introduce a small increase and monitor the impact.
“I would do a 50 cent increase to start it off and see after a month where it needs to be,” she said.
Mr Hiscock said the much-loved cafes with their trained baristas will face the “inescapable process of putting up the price of the morning brew”.
“I can only see demand for coffee going up as the global population increases,” he said.
“We’re seeing China with its 1.5 billion population coming into the market as they increasingly shift away from tea, replacing it with coffee.”
Coffee is one of the most widely consumed beverages in the world, and one of the most traded agricultural products on the planet.
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