Food & climate
A number of factors are driving coffee prices in Australia higher, ranging from bad weather to US President Donald Trump’s tariffs, to increased labor costs, and the Chinese.
The cost of daily flat white is set to increase further as the coffee market grapples with a perfect blend of falling supply, surging demand and stubborn inflation, according to a report seen by “Food & Climate” platform.
There are 27,000 cafes and coffee shops in Australia, employing 139,000 people and representing a $14 billion market, according to a January 2025 IBISWorld report.
In 2024, international brand Lavazza warned its costs had jumped by $1.3 billion, while disasters stripped coffee bean crops worldwide.
Combine that with the rising cost of rent, energy and wages, and there are predictions a barista-brewed coffee will rise to $10, well above the current $5.50 average.
But 2025 brought another slew of challenges for coffee roasters, with one large-scale supplier warning that cafes must “bite the bullet” and up their prices.
Increased coffee prices and the overall cost of doing business are driving up the price of coffee everywhere. So, curious if price hikes would cause Australians to forgo their daily brew, we put a callout to readers.
Analysing over 300 responses, it’s clear buying a coffee means more to Guardian Australia readers than just the caffeine hit. While most said they still plan to buy takeaway coffee, for most it is no longer a daily purchase.
Really wild ride
Rachel-May Follan runs Whyld Coffee, a small-scale roaster on the Gold Coast that supplies 11 cafes with specialty beans imported from South America and Africa.
She described the past 12 months as “a really wild ride”, especially after US President Donald Trump’s tariffs announcement “ignited panic buying” among some roasters.
In 2024, Follan paid about $4 a kilogram for organic green coffee beans. The price has now jumped to $14 a kilogram. “You don’t realise how much work goes into that daily coffee,” she said.
Pablo & Rusty’s Coffee Roasters 2024 research shows the breakdown of costs for a small takeaway flat white.
“Thousands of hands have gone into back-breaking work for it. These are hand-picked cherries from a tree that are then pulped, that are then dried in the sun for 30 days, rotated by hand.”
However, Follan said the coffee itself only accounted for about 13 per cent of the cost per cup.
The ABC analysed the online prices of nearly 44,000 products at Coles and Woolworths, revealing a sales technique used on thousands of items.
The supermarket coffee prices
The supermarket coffee prices have risen sharply over the past six months.
Australia’s two major supermarket chains, Coles and Woolworths, both said external pressures were driving record-high coffee prices. “We are doing what we can to help customers find value when they shop with us,” a Coles spokesperson said in a statement.
A Woolworths spokesperson said retail price hikes were directly linked to supplier and manufacturer increases.
“The industry is managing higher commodity prices of green coffee beans, and we are working with our suppliers to ensure we have a range of products in these categories to suit all budgets,” the spokesperson said.
One of the country’s largest specialty roasters, Essential Coffee, sells about 180 tonnes of coffee a year to customers in Australia, New Zealand and Singapore, retailing at $35 to $55 per kilogram.
Chief executive Todd Hiscock said his business’s labour costs had increased 9%, rent 29% and insurance 6 per cent over the past two years.
On top of that, the wholesale cost of coffee had increased by 119% since November 2023.
Todd Hiscock says there have been disruptions to global coffee supply. “[The] Chinese have very much converted from tea to coffee,” he said. “They’re buying up unprecedented levels of coffee supplies. Often they’re taking a whole Brazilian stock load in ways that’s never been seen before.”
Hiscock said on top of increasing global demand, “climate-driven weather events” had disrupted supply.
“You’re seeing crops just get wiped out by massive frosts and storms and cyclone events, bushfires too,” he said. “Also, the removal of crops with more urbanisation.”
The growing popularity of alternative milks, which can cost up to double the price of cow’s milk, also adds to price pressures.
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