Coffee likely to cost $7 a cup ‘within months’ as price rise brews

Would Australians pay $7 for a cup of coffee? It seems we’re about to find out.

Single O chief executive Mike Brabant believes coffee prices will increase quickly over the next six months. Picture: Luis Enrique Ascui

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Coffee lovers take a deep breath. The cost of your favourite shot of caffeine is tipped to reach $7 within six months.

Rising coffee prices have become a constant source of grumbles at cafés across the nation, with a flat white typically costing $5 or even more.

But Australian coffee roasting pioneer Mike Brabant, chief executive of Single O, expects prices to rise further, quite quickly.

“We think between $6 to $7 for a regular coffee is where it’s going to be,” Mr Brabant told The Australian’s Global Food Forum in Melbourne on Friday.

“And I think you’ll see that price increase really quickly over the next six months.“

Greater share for producers

The price hikes are linked to a “perfect storm” of global conditions. These include extreme weather events – droughts, floods – in coffee-producing countries in Asia and South America, as well as supply chain problems.

Also blamed are rising demand, in part due to stockpiling ahead of European anti-deforestation regulations, the impacts of inflation and the soft Australian dollar.

But Mr Brabant, whose company supplies 400 hospitality venues nationally and is taking Australian coffee culture to Japan, said there was silver lining: the rising prices were benefiting growers in developing countries.

“What’s not being discussed is that producers are the ones winning in the value chain,” he told the forum.

“They’ve often been left behind in the supply chain, (but) at the moment, with the $4-(plus) coffee market, they are actually getting a greater share of that global coffee industry.”

The cost of coffee could have some checking their bank account.

‘Continued growth’ for quality

He believed Australians would be willing to pay $7 for a flat-white – and even more for fancy caffeinated tipples.

“We certainly believe consumers will continue to pay for well-sourced, well-made coffee,” he said. “We don’t see at the moment that slowing down. We see continued growth.

“Of course we understand there is a cost-of-living crisis. But what we’re finding is that the operators, the cafés… are focused on their quality, on a sustainable product, on an amazing hospitality service.

“Ultimately, what everybody wants is to walk into a café and the barista has made your coffee before you walk in and says ‘Hey Jason, good morning, here’s your strong flat white’.”

In that context, he believed $6 to $7 for a cup of quality, sustainable coffee “represents good value”.

Challenged on whether the price could reach $8 a cup, Mr Brabant said this was likely only for those consumers who liked large coffees with milk alternatives.

“I think if it’s a large, strong, oat flat-white you might be paying up to $8,” he said.

Single O said the C-market – the global benchmark for coffee pricing – had surged to $US4 per pound, marking a 103 per cent increase in 12 months.

It’s time to rethink how specialty coffee is valued, Mr Brabant says. Picture: Single O

‘Reset’ in play

“Rather than seeing this as a challenge, Single O believes this is the reset the industry has needed for decades,” the company said in a press release.

“Now is the time to rethink how specialty coffee is valued, ensuring that producers, roasters, and independent cafes thrive while continuing to deliver world-leading quality.

“Higher prices enable roasters to continue investing in quality and ensure that Australia’s independent cafes – renowned for their leadership in specialty coffee – can sustain their operations while offering consumers exceptional coffee experiences.

“It also ensures producers can participate in a more equitable share in the billions of dollars the global coffee industry generates.”