CityMag dives deeper into our coffee culture and speaks with a local importer about why we should pay more for our caffeine hit.
Why the price of coffee will rise – whether we like it or not
May 08, 2024, updated Oct 17, 2024
As CityMag has reported in the last few weeks, Adelaide roasters say the price of coffee should increase to factor in the rising costs of producing a regular cup.
One roaster says a small coffee should cost a minimum $7, when considering the overall spend of running a café and roasting quality coffee beans.
David Train, Asia Pacific account manager at Ally Coffee, says coffee culture is facing a “challenge here in Australia”.
As a green coffee importer providing coffee for Adelaide roasters like Coffee in Common, Kindred Coffee and Monastery Coffee as well as national and international roasters, he sees a much larger issue affecting our coffee culture more broadly.
“We’re really spoiled with cafes and hospitality in general, but we also have some of the highest wages in the world,” David says.
“To produce a cup of coffee costs higher here [in Australia] than it does in most other countries in the world.
“Some of the ways in which people try to cut costs is to obviously cut the cost of goods, and that then trickles back down into the quality of coffee.”
So what’s good quality coffee?
What differentiates better quality coffee from the latter is the coffee bean scoring process, which decides whether coffee can be classified as specialty or premium grade.
“Coffee itself is objectively scored out of 100,” David says.
“To be classified as specialty grade, it has to reach a score out of 80 and it’s done by people called Q Graders who pass a five-day course and exam [run by Specialty Coffee Association]. It’s relatively hard [and] it has a high failure rate to be able to objectively score coffee.
“It’s to give a quality grading of the green coffee, not of the roasted coffee, [but] of the of the raw coffee.”
David of Ally Coffee“Anything over 80 technically qualifies as specialty and the more points you have, the more expensive it gets,” David says.
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“It’s nothing like wine where you see a lot of wine shows and they get scores of 98, 97. For coffee that’s more or less impossible. If it’s getting over 86, 87 points, the coffees are quite exceptional.
“Anything over 90 is extremely rare and very expensive.”
David reiterates that the scoring is based on its objective value, not subjective taste.
“Specialty will cost more because of the objective quality, not necessarily because you think it’s better than what I think it is because taste is subjective,” he says.
“You eat and drink what you like to eat and drink; some people like very dark roasted coffee, some people like very light roasted coffee, some people like it with milk, some people like it with caramel. Who cares?
“Our role is to be very objective with the facts, not to tell you what you should do with it, or how your customers need to drink it.”
David says another factor they take into account is the sustainability and traceability of the product, which again “generally can refer to higher quality and higher price”.
The good beans are going elsewhere
David says what he as an importer is seeing in Asia is “the start of specialty coffee”.
“Australia’s had a really progressive coffee industry more or less since the 50s, when the first Italian immigrants came across with all their amazing machines and we really took off the espresso culture there,” he says.
“And then the early 2000s, specialty coffee became – I wouldn’t call it a trend – but somewhat the norm.
“But in most other regions, that wasn’t really a thing.”
David says in Southeast Asian regions, there’s a young population with a growing thirst for coffee who are “happy to pay for the quality”.
“So about 75% of the Southeast Asian population is under 40, so it’s a growing middle class, younger demographic,” he tells CityMag.
“The Philippines and Indonesia have a highly Islamic population. So they’re drinking lots of coffee [rather] than alcohol, so that appetite for coffee is humongous.”
An Exchange brew. This picture: Johnny von Einem.“Whilst in other regions, they tend to have traditional coffee [which is] fairly cheap, and quite rich and intense, and made with condensed milk sometimes,” he continues.
“And then they have higher end coffee and they have a good point of differentiation whilst in Australia, you can go to an amazing cafe like here [at Exchange] or you can go to a pub, or you can go to a petrol station and pay the same price and there’s no real point of difference.
“Even though here, where we are at Exchange, you would expect and you will get a clearly better experience with coffee.”
The main problem David sees is “in Australia we’ve commoditised specialty coffee by making coffee so accessible”. He says being able to get coffee “anywhere” is “not necessarily a good thing”.
“So the issue in Australia is everywhere you go sells coffee: pub, bakery, bowling club, surf lifesaving club, café — everywhere sells coffee,” David says.
“The general consumer will not necessarily differentiate between, they’ll just remember ‘I like a latte’. They don’t know what brand they like, they don’t know the roaster or even the milk, but they’re like ‘I like to drink a latte with one sugar’.
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“Even though they’ll go to a cafe they’ve never been there before, ‘latte one sugar’. Or they might go to the pub ‘latte one sugar’ and it’s not the same product.
“But we’ve kind of got it everywhere and it’s the same price.”
This picture: supplied.He worries the overall quality coffee landscape is lowering.
“In Australia, we haven’t kept up with adjusting our prices, so roasters can’t afford to really charge accordingly to cafes because the consumer is not willing to pay more,” he says.
“Therefore, they need to try and find more economical coffees, which essentially means cheaper grades or lower quality.
“So the only way in which the roaster can save money is to purchase lower grades.”
We just need to start paying more
David agrees with Dawn Patrol co-owner Dom Ossa that a reasonable price for a small cup of coffee should be upwards of $7.
“You see in other countries. [Coffee’s] at least seven to 10 Australian dollars and most of those countries have lower cost of living than what we have here,” he says.
David says “to maximise the sustainability of these businesses, we need to be able to pay more for it”.
“Otherwise, we have to be happy with having lower-grade coffee,” he says.
“It’s not necessarily a bad thing that [lower-grade] coffee comes into the country, it has its place, it just won’t maybe taste as nice subjectively and objectively.
“In our opinion, the quality won’t be as good.”
David says the snowball effect of lower-quality coffee coming into Australia is that “we will get left behind with the rest of the world in terms of quality of coffee”.
“In Australia, if we don’t shift, a lot of the producers and regions will still bring coffee to Australia, but it’ll be an afterthought,” he says.
“And because of just the sheer volume and upscale in Asia, Australia will get left behind if we don’t make a shift in our purchasing.
“There will still be coffee, it just might not be as good as it used to be.”
Coffee Branch on Leigh StreetAlthough David says the inevitable diminishing quality of coffee in Australia is “already happening” as roasters become more “astute with their purchasing”, he says conversation around coffee in general needs to shift.
“It’s not just saying ‘okay, from now we have to go from $4.50, $5 to $7′ because the world will go in outrage, but a gradual shift in that position. I think as a general consumer, they probably need to ask more questions about coffee in general,” he says.
“I think for a consumer to have a slightly general awareness as to where it comes from, as to maybe why it costs money.
“I think if you ask most people if they know where coffee comes from, I think we still have a blissful ignorance. Some people might even say Italy or some people don’t even know that coffee’s a fruit — it’s the seed of a fruit, it’s not even a bean.
“I think for a consumer to have a slightly general awareness as to where it comes from and as to maybe why it costs money.
“Australians are quite passionate at the moment about our groceries, wanting to make sure that the farmers are getting the correct price from Coles and Woolworths. Same thing in terms of coffee production.”
David says he understands getting people to pay $2 more is “probably not going to happen straightaway” but “inevitably people are going to have to pay more”.
We compare societies’ shift in perspective when it comes to sustainable clothing – and people more willing to spend more when they know it’s been ethically sourced. Yet David says people’s perspective is different when it comes to a cup of coffee, although it’s the same concept.
“[As an example], Exchange has here, maybe $40,000 worth of equipment on the bar; someone needs to pay for that,” he says.
“It’s quite an expensive operation to start and we take that for granted and we don’t question why. Why is the coffee more expensive? And the mainstream media doesn’t really cover it enough.”