Coffee Prices to Jump to $6: ‘People Say They Won’t Pay It, but They Will’

Australians are facing rising cost of living pressures, leading to a potential increase in daily coffee prices. The average cup could soar to $6 by the end of the year, with domestic and international factors contributing to this trend. Agribusiness Insights head Michael Whitehead warns that prices will likely rise if inflationary pressures continue.

Currently, customers can expect to pay around $4 to $4.50 for a regular cappuccino, latte, or flat white, but this can increase by 50 cents or more if syrup or an alternative to dairy milk is added. When it comes to a simple iced latte, prices have already exceeded $6. However, due to domestic factors like inflation and international factors like shipping costs or climate change, cafes could jack up prices to ensure they can keep the lights on.

Melbourne Coffee Academy director Charles Skadiang believes that coffee prices have stayed relatively reasonable compared to the rest of the world. He believes that coffee is massively undervalued in Australia due to the quality of the product and the increased cost of beer with indexation. Skadiang points out that there is more skill involved in producing high-quality coffee than pouring a pint, and the thought of paying $7 for a cup of coffee is outrageous for many people.

One major factor that could stop cafe owners from raising their coffee prices is competition, as companies like 7/11 are selling machine-made coffee for around $2. If coffee from a cafe becomes too expensive for customers, there could be a huge uptick in the number of people buying fancy coffee machines and making their daily cup at home. A good quality coffee at home with top-quality beans can be less than $1 a cup, so people are likely to go and make their daily cup at home.

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