1 week Ago By Yahoo Finance AU
Aussies should prepare to pay more for their coffee in 2025 as cafes cop increased pressure from all fronts. Not only are they impacted by the cost-of-living crisis and weakened consumer spending , but their main ingredient has exploded in price recently. Arabica, which is the main type of coffee consumed in Australia, hit a record high a few weeks ago and surpassed the all-time peak set in 1977.
Melbourne cafe owner Dan Dick told Yahoo Finance that cafes across the country will likely have no choice but to pass that on to consumers. "Cafes can't really absorb increases to coffee and most cafes will spend triple what they do annually on rent in coffee," he said. RELATED "So a small increase in coffee prices has a pretty significant effect on a small business's bottom line.
"So ultimately, that's going to have to be passed on down again. No one wants to do it, but it's already become a very difficult situation." Just before Christmas, Arabica futures jumped as high as $US3.
48 ($5.45) per pound in New York. Do you have a story? Email stew.
[email protected] Brazil is one of the biggest producers of coffee beans and it was hit with higher-than-average rainfall in October, followed by drought-like conditions and high temperatures. Vietnam, another huge coffee bean producer that focuses on the robusta variety, has also been hit with a severe drought that has impacted supply.
This combination has contributed to the bean price jump and has led to major concerns about the availability of the crop over the coming months. According to the Australian Financial Review , Arabica futures could shoot between $US4.00 and $US5.
00 in the coming months. Aussies already feeling the pinch of higher prices Phoebe Parsons was shocked when she visited a cafe on New Year's Day to get two coffees. The pilates instructor was well aware that she would pay a premium for a hit of caffeine on a public holiday like January 1.
But even with that taken into account, she couldn't believe the price that she was charged. "I know that it is New Year's Day, so the places that are open will have the public holiday surcharge," she said on TikTok. "Totally fine.
I understand why you have to do that from a business perspective. We got two small cappuccinos, six-ounce. Mine was almond milk, he's on oat milk, and it was $15.
".
