Nation's love affair with coffee on shaky ground as cost-of-living bites

On International Coffee Day, October 1, a shift in coffee consumption habits is being driven by rising costs of living. Nestlé Australia, a major producer of instant coffee, has seen a surge in sales. Yet, with cafe prices increasing, many coffee lovers are adjusting their spending habits. At a Queensland coffee-processing factory, 10 individuals work to maintain the quality of each batch, sampling up to 100 cups daily.

Quality assurance manager and chief taste-tester Glenn Jones of Nestlé, who drinks coffee throughout his workday and weekends, expressed his love for the beverage, stating he "will have coffee on the weekends — I love coffee."

Australia is known for its sophisticated coffee culture, with three-quarters of Australians drinking coffee regularly. However, Martin Brown, general manager of Nestlé’s coffee and dairy business, noted that sales figures indicate a shift back to home consumption due to the cost-of-living challenge. Cappuccino sachets have been the fastest-growing segment in the past five years, but there’s also a return to traditional soluble instant coffee.

Food and non-alcoholic beverage prices rose by 3% in the 12 months leading up to August 2022, while cafe-bought flat white prices averaged about $6, and iced lattes can cost up to $9. University student Charlotte Cairns on Queensland’s Sunshine Coast pointed out that while a $5 coffee is acceptable, a $9 iced latte is treated as a treat.

Deann Mayfield and her partner have limited their out-of-home coffee purchases, opting for one special coffee a day. Coffee bean prices hit record highs last year, causing importers and roasters to raise prices, which were then passed on to consumers. Although green bean prices have dropped in 2026, they remain three times higher than in 2021.

Australian Specialty Coffee Association president Bruno Maiolo explained that the drop in green bean prices hasn’t offset the increase in other costs like rent, electricity, milk, and wages. Maiolo highlighted that one in two coffee businesses fail due to inability to maintain required profit margins, leading to a precarious situation for coffee businesses in Australia.