{"id":431794,"date":"2026-01-23T08:28:10","date_gmt":"2026-01-23T08:28:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/431794\/"},"modified":"2026-01-23T08:28:10","modified_gmt":"2026-01-23T08:28:10","slug":"7-coffees-are-the-tipping-point-for-28000-cafes","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/431794\/","title":{"rendered":"$7 coffees are the tipping point for 28,000 caf\u00e9s"},"content":{"rendered":"

This is my fourteenth year of working from home. I brew my coffee, and when I need a hit while driving, I almost always purchase a cheap $2 coffee from a service station or convenience store.<\/p>\n

While travelling around New South Wales and regional Victoria over the Christmas break, I visited several caf\u00e9s and was shocked to pay $6.50 for a cup of coffee.<\/p>\n

Such price inflation makes it challenging to understand how so many Australians are still willing to purchase caf\u00e9-made coffees each day.<\/p>\n

Upon returning home in January, we learned that the latest monthly CPI report from the Australian Bureau of Statistics (ABS) revealed that coffee prices in Australia have surged more than five times faster than overall inflation, driven mainly by a global shortage of coffee beans.<\/p>\n

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Coffee, tea, and cocoa prices jumped 15.3% in the year to November 2025, making them one of the strongest contributors to inflation in Australia. By comparison, overall CPI rose by 3.4% over the same period.<\/p>\n

Reduced global coffee bean supply drove the price spike, pushing up costs for roasters, caf\u00e9s, and consumers.<\/p>\n

Major producing countries (especially Brazil) have faced poor harvests, climate volatility, and supply disruptions, pushing up the global price of green beans.<\/p>\n

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\"Coffee<\/p>\n

Industry reports show bean prices have surged dramatically, forming the core cost pressure for Australian roasters and caf\u00e9s.<\/p>\n

Caf\u00e9 owners have also faced higher wages, rents, utilities, and general food\u2011service costs, all of which have been passed into the price of a cup, alongside other menu items.<\/p>\n

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Several industry sources in Australia have cautioned<\/a> that the price of coffee could reach $7 per cup in 2026 \u201cjust to break even\u201d.<\/p>\n

Mike Brabant is the chief executive of Single O, one of Australia\u2019s largest coffee importers, roasters, and wholesale distributors to more than 300 caf\u00e9s or wholesale partners.<\/p>\n

Brabant told the Nightly that caf\u00e9s have little choice but to bite the bullet and pass on the rising costs.<\/p>\n

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\u201cIf you look at Singapore, London, New York, the coffee is already a lot more expensive there\u201d, he said.<\/p>\n

\u201cAustralia is actually one of the cheapest countries in the world, so we still think there\u2019s a long way to go to make up for those price increases, and I do think prices are going higher\u201d.<\/p>\n

The prospect of charging $7 or more for a cup of coffee poses a significant threat to Australian caf\u00e9s, which have experienced rapid expansion in\u00a0recent decades.<\/p>\n

IBISWorld\u2019s Cafes and Coffee Shops in Australia industry reports estimated that Australia had around 27,000\u201328,000 caf\u00e9s and coffee shops operating nationwide as of 2025\u201326.<\/p>\n

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Competition is fierce, with multiple caf\u00e9s often operating in the same locations. However, with prices of coffee and food soaring, there is insufficient consumer demand to support them, and large numbers of caf\u00e9s have closed.<\/p>\n

Consider the following fact: one $7 cup of coffee a day would cost someone more than $2,500 a year. Double it for two barista-made coffees a day. Such expenditure is simply unaffordable during a cost of living crisis where everything is going up in price.<\/p>\n

At some point, Australians will be unable to afford or refuse to pay such exorbitant coffee prices. They will instead bypass caf\u00e9s for cheaper options, including brewing coffee at home or automated coffee from service stations and convenience stores.<\/p>\n

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The caf\u00e9 industry will then experience demand destruction, business closures, and job losses.<\/p>\n

At the end of the day, barista-made coffee is a discretionary purchase. Australians can easily seek alternatives or go without.<\/p>\n

The two-decade boom in caf\u00e9s is coming to a close. Next comes the bust as numbers shrink to meet the slowing customer demand.<\/p>\n

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