Prices of Australian Coffee set to Soar – amid Global Production and Supply Issues
Many of us are adding our coffee to the mental health budget section spreadsheet, snuggled right up to the avocado toast that is locking first home buyers out of the domestic housing marketing – despite soaring costs.
There has been a worldwide coffee shortage brewing for a long time, and we’re set to see the Australian coffee menu change as prices of coffee increase.
While this might be news to some readers, those of us in the coffee biz have been doing our best through the worldwide coffee crop losses, reducing options or sureties that we can access the favourite origins that underpin coffee blends, and increasing variability in the quality of the green coffee bean.
You’d call it a storm in a teacup. It is been a stinging series of unfortunate events that means getting consistency or a guarantee on supply is now as difficult as squeezing crema out of an old coffee bean.
So what does that mean for Aussies?
Many of whom would put a fight to the death before giving up their morning sparkly bean juice?
Top quality coffee machines and office coffee machines being purchased is one obvious answer, but there is a more feel-good option to sip on during what might look like a very dark roast moment for all.
The shortage of Coffee in 2021-2022 is set to get worse in 2023
The sudden uptick in prices can be broadly attributed to 2 main offenders – supplying and climate change difficulties.
Weather is becoming extreme and less predictable
In 2021, the world’s largest producer of coffee beans was smashed by severe weather events. Brazil grows and exports more than 40 per cent of its worldwide supply, and in 2021 it was affected by a serve drought, which was instantly followed by 2 sharp and ferocious touches of frost.
One of the main coffee-producing regions in the world lost a whopping 3.45 million units in a single swoop. When you compare that to the usual yearly output of coffee beans – of 49 million units that hints at the extent of the damage to be exacted across the country and the pain passed on to importing countries.
With other major suppliers like Indonesia also predicting a reduction in supply due to lighter crops, the upward squeeze on present green coffee prices is set to keep tightening.
The prices of coffee as a worldwide commodity increased an eye-watering 84.7 per cent in one year, measured from Apr 2022.
The trend is shown below – the steep climb from the 130 dollars mark for each unit in April 2021 to above 236 dollars for each unit today – and this is projected to keep climbing to at least $260 for each unit.
Source Knoema
Huge Supply chain issues in 2022
Most of us have experienced a fair share of delays, interruptions, and shortages due to Covid-19 across the world, like a huge nasty wave.
But shipping and freight are not something all of us think about when we are grumbling about online orders getting dropped off late.
If you are ever wondered how raw, green coffee beans make their route to sparking shores, it is almost exclusively by sea.
We have all seen firsthand the global travel restrictions, isolations, and staff shortages due to illness and death.
It's going to get worse before it gets better, but it’s a big challenge for the coffee industry
The price rises that coffee-loving customers are starting to see are not solely due to dramatic world events like natural disasters and the worldwide Covid-19 outbreak.
No, the prices have been slowly rising for coffee owners and roasters for quite a few years before this. They just absorbed those costs as long as they could, frantically finding savings in other areas so they’d delay passing costs to buyers.
But each cost has ticked up over the past five years for businesses and producers, just as it has for an individual household.
Australian coffee roasters and cafes have not been passing that price rise on, cutting margins very good to do so. When that runs into:
- Nearly 85 per cent increase for green coffee beans
- Disrupted supply and inconsistent quality
- Increased utilities and huge fuel prices
- Drastically more expensive transport costs – fewer ships on sea – fewer trucks on the road
So, for Australian coffee lovers, how much prices are going to increase?
A much-touted prediction puts the price of regular 12oz late around 7 bucks by the end of 2022, which is not shocking when several cafes bravely made that called-for jump to survive lockdowns during the outbreak and stay open to their loyal buyers.
While it does mean huge adjustments than we are used to, we have enjoyed relatively flat prices at our local caffeine haunts for half a decade.
Behind the industry scenes, price rises are not shocked to seasoned coffee consumers. The scale of the devastation to the worldwide coffee supply, staff availability, logistics, and an ever-changing social landscape? Yep, that is new. That is huge to take in.
Disruptive change is streaming into the Australian coffee market
Unlike global change – a procedure we are falling far more familiar with, trundling along at a far more comfortable pace - disruptive change is the sort which plays big havoc – and has an impact on the way that a business model and market operates on a basic level suddenly and unexpectedly.
Time to prepare often does not exist, so neither do solutions or systems to manage it. This seems like a challenge, re-inventions, and re-inventions that’ll propel whole industries forward, sideways, or backward like a slingshot.
Who comes out on top depends on a vast number of factors, but the main factors are:
- Financial decisions – More options and more money.
- Willingness to embrace new and advanced ideas – letting go of the dead weight, even if it’s super painful.
- The balancing act of old VS new – the needs of loyal buyers and new customers need to advantage of a changed business model, as much as possible.
- High engagement with community and customers – having actively voicing and empathy are different things. Nobody knows your story if you do not tell them.
- Acting quickly on making your decisions – an agile pivot leaves more space for the next gains, and more to make the mistakes necessary to generate real solutions.
- Frequent and consistent communication – Using digital marketing, social media, online presence, and conventional ways to update, reach and educate customers is no longer to negotiate in a post-Covid-19 outbreak.
Supporting the local business and appreciating the joys in life
As prices rise globally, it feels both half-expected and scandalous that our long-trusted companion would join the list.
A final betrayal, a long list of suffering over the past two years, but it is not like that, coffee still loves you just as much as you love it.
The ticket to visit your pal is just a tiny bit more than it was one year ago. And as we know, when we love something - we find a way.
The prediction surrounding consumer behaviour in response to the price of coffee rise is not scary at all very few predict that Aussies will be scaling back in the face of an extra buck or 2.
Not only are we one of the most dedicated coffee-drinking cultures in the world, but it is also difficult to let go of such
The 3 biggest upsides of coffee being slightly expensive
If you are going to pay more than $2 for each litre of fuel, astronomical rental prices, and high-interest mortgages – we are going to keep our damn coffee tanks. And we are going to enjoy it mindfully.
We know it is a buzzword at the time but there is a good reason why – gratitude is a practice that has been expertly proven to boost happiness in those who practice it consistently.
And that practice does not have to be long-winded or even include doing something. Increasing gratitude just asks you to notice when anything good happens to you in your day.
Spend time with your loved ones
Drinking coffee is a splendid activity, often enjoyed alone or with others. If the coffee gets expensive, it is more likely that the coffee bean budget would be saved for the rituals shared with others, and therefore we appreciate it more.
It has long been part of social connections and culture in Australia, and it will not disappear quickly.
Appreciation and understanding
If you want to know why you are paying more, you’ve to ask the questions and listen to the answers. Learning more about the things you like and becoming aware of how it comes to be in your hand is never a bad thing.
And with the coffee, the more you learn the less you feel you know. It is a complex and fascinating rabbit hole to go down. Coffee experts want to tell you about it.
Strike up a conversation with a barista or roaster, do a coffee course, learn how to brew a new way at home, and spend 7hrs on Wikipedia. Be curious.
It was not the most enjoyable way to be given a lesion, but a near-total disruption worldwide has certainly put a lot into perspective for us.
Whatever it is that you want to do about it, We have got you covered!
If you got to the bottom line of this post and thought well that was horrifyingly informative and not super uplifting then fear not.
Most drinkers have a set budget to work from and we are coffee experts over here, not financial experts.
But we absolutely can hook you up.
- Freshly roasted beans, for locals, by the locals
- More about how to use your brewing equipment with in-home experts and coffee training courses
- Coffee machines and alternative brewing at great prices
- A sublime coffee experience in-home when you need it, or when you want to hang out with your friends and share a coffee experience.
- Unending support, love, and inspiration until your coffee brewing attempts turn from bitter to super buttery
- A team and customer support community who nerd out and love for coffee together, no egos allowed. Coffee machine repairs.
Get ahead of your budget, set up your coffee-making practice, and make the most of visits to us when you want to make your coffee brewed to perfection.
The concepts of gratitude and treating yourself are not manual – it all comes down to appreciation and noticing those moments in the first place.
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