The demand for coffee is increasing, yet there’s less available due to more frequent extreme weather events in major coffee growing regions.
Bernardo Figueiredo, Associate Professor of marketing and consumer culture at RMIT says the increasing cost of coffee may strain consumers who see it as part of their daily rituals.
“Coffee is particularly popular among younger consumers, who view it as trendy, refreshing, and beneficial for energy and focus,” he said.
“Even countries historically not known for coffee consumption are experiencing a surge in demand as consumers are drawn to coffee’s aspirational image and functional benefits, leading to innovative product offerings tailored to local tastes.”
For Australians, the rising coffee prices mean that their daily cup of coffee may become more expensive, impacting both casual drinkers and dedicated coffee enthusiasts. This could lead to changes in consumer behaviour, says Dr Figueiredo: “such as opting for cheaper alternatives, reducing consumption, or switching to home brewing”.
“However, given the cultural importance of coffee as a social and lifestyle symbol and its growth among the younger segments, it is unlikely that this would decrease the demand for coffee,” he said.
Dr Vinh Thai a professor of logistics and supply chain management, specialising in maritime logistics at RMIT says there are several factors contributing to the rising cost of coffee beans.
“First is the havoc wreaked by extreme weather on key supply markets such as Brazil and Vietnam,” he said.
“The continuing increase of container shipping rates and other supply chain issues, by which the lion’s share of coffee bean shipments are transported, also greatly contribute to the cost of coffee.”
Roasters may need to pass these costs onto cafes who in turn, may do the same to customers. This will likely add further pressure and negatively affect the lifestyle of customers who are already dealing with the cost of living, says Dr Thai.
“If customers choose to change their coffee habits, this might threaten the Australian coffee industry, which employs almost 70,000 people, as of 2023,” he said.
“In the meantime, coffee importers and roasters could look to alternative markets to alleviate cost pressures. They could also increase their purchasing power and bulk-buy coffee, by working with peak bodies such as the Australian Coffee Traders Association.”