Release Date: 9/10/2014

Will Australian's pay $8 for a morning coffee?


Australians are today waking to the news that a on-going drought in Brazil is pushing the price of raw green coffee beans to a two year international price highs. When this drought effect is mixed with Australia’s lowering USD exchange rate Is there a perfect storm brewing in the coffee cup?


Quarterly results released by the Gilkatho Cappuccino Price IndexTM indicate solid price rises in Melbourne and Brisbane contrasted by slowing prices in the other capitals. It’s still too early to see today’s news reflected in actual prices at the local cafe.


Gilkatho Managing Director Wayne Fowler said that increasing raw bean prices are starting to filter through the market. Just how far this will go is yet to be seen. Many operators may choose to absorb the price rise while others may have no choice but to pass on even the slightest increase.


“The highest price that consumers will pay for a coffee is yet to be tested. We do know that our index is already pushing the $4 barrier in Perth while in Canberra price rises have been falling behind even the modest consumer price increases of the past few years..” Mr Fowler said.


“The cities in which we see slower price growth are cities in which we have also seen outlets closing. We continue to see business costs rising and this needs to be recovered through increased coffee sales. Where operators are unable to increase prices to make a reasonable return on investment, they exit the market.”


“Our price modelling from previous periods have shown that the greatest impacts on cafe prices come from rent and labour. Coffee actually makes up a smaller proportion of the price than people realise. Coffee drinkers need to consider the total coffee experience that they enjoy and not be distracted by overseas news ”, Mr Fowler said.


The results released for the second quarter of 2014 have shown that whilst Perth is maintaining the top position as the most expensive location to buy a coffee the Index has stabalised as it faces the $4 hurdle. Sydney once again recorded the lowest average price driven by plentiful supply of lower cost outlets contrasting with their boutique outlets.


June 2014 Gilkatho Cappuccino Price IndexTM in comparison to 2010 – percentage increase. (Available upon request to accredited news agencies and outlets.)




QUICK FACTS:



  • The Cappuccino Price Index (CPI) is independent research conducted by Gilkatho Pty Ltd that was first released in 2003.


  • The Australian Bureau of Statistics’ Consumer Price Index has recently gained access to the Gilkatho CPI to correlate with its own research data.


  • The CPI surveys more than 1,100 coffee venues in Melbourne, Brisbane, Sydney, Perth, Hobart, Adelaide and Canberra.


  • The average coffee drinker who buys one cup of coffee a day spends more than the average weekly wage per year on coffee.


  • Gilkatho Pty Ltd aggregates results from the surveys to understand how the selling price of a cup of coffee changes over time.


  • Website: www.coffee-prices.com





For further media information or to request an interview please contact


Wayne Fowler on 0421 333 031 or email questions to wayne@gilkatho.com.au