Kiwi coffee scrubs up well in world survey, but prices may rise

Friday, 9 July 2021

Our coffee’s good quality and not too badly priced internationally, but will it stay that way?

The good news: we have great coffee and we’re not paying as much as we could be.

The bad news: crazy freight costs and rising bean costs might just push up the cost of our beloved pick-me-up in the coming months.

The Financial Times has reported that coffee bean prices on international markets are surging due to a devastating drought in Brazil.

Anti-government protests in Colombia have also affected exports, and Arabica beans have touched a four and a half year high of almost $1.70 a pound, almost 70 per cent higher than a year ago.

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Labour costs are the biggest contributor to the price of a cup of coffee. (First published January 2020)

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Trade Aid which imports about a fifth of the country’s coffee beans, said there was no sign yet of price rises, although that could be because of long-term contracts.

However, the beans were a “tiny” part of the overall cost of a cup, chief executive Geoff White said.

“It’s the milk, it’s the labour, it’s the rent on the premises, they're by far a bigger cost than actually the [raw] coffee.”

Kiwi coffee is only slightly more expensive than its Australian cousin.

Roz Cattell, president of the New Zealand Coffee Roasters Association, said the rising cost of freight, wages, and other ingredients and overheads would likely flow into the cup.

“It’s very unknown at the moment. We need to appreciate what we’re actually putting into that cup of coffee … There’s a lot in that cup.”

Fortunately, Kiwis can take comfort that they could be paying much higher prices overseas.

Researchers at US-based online lender CashNetUSA gathered the average price of a coffee in 104 capitals around the world, and also consumption figures from German data firm Statista.

Many Europeans drink more coffee than the more modest 2.2kgs that New Zealanders per capita drink each year.

The average price for a coffee in Wellington came out at US$3.30, about NZ$4.75. But there were 39 countries more expensive than us.

Across the ditch, coffees in Canberra were a little cheaper at US$3.10, but in the rest of Oceania and Asia, coffee prices varied widely, from $US1.85 in Laos, to a whopping US7.77 in South Korea.

In fact, Seoul was the most expensive capital for coffee in the world, fuelled by a booming theme cafe scene and more Starbucks than anywhere else in the world.

Geoff White, seen here with Trade Aid’s fair trade chocolate, says coffee beans haven’t yet gone up in price.

Wellington also compared well to key international cities. In Japan, it was US$5.29, while Londoners paid a more moderate US$3.70, and in Washington DC, Americans were paying US$3.77.

Meanwhile, in Europe, where coffee making has become an art form, Swiss coffees were the most expensive at US$5.65 a cup.

Austria – home of the biedermeier, a coffee with cream and apricot liqueur – paid US$4.04, just a little more than the massively thirsty Luxembourg City (US$3.90).

The cheapest coffee in Europe, and second cheapest in the world, was Tirana, Albania, at just US$1.21 a cup.

In the Middle East, coffee was often expensive, particularly Doha, where a cup of Joe will set you back US$6.79.

Coffee pioneer Jeff Kennedy says coffee is a cheap form of office for some people.

Ironically, the region also boasted the world's cheapest coffee capital in tea-loving Iran, where Tehran residents pay just US46c per cup.

New Zealanders also appear to be getting excellent quality for their money.

White said there were a lot of coffee rosters in New Zealand and it was a 'pretty competitive market”.

“Everyone we have come here that's in the coffee business is staggered by the coffee that we have in New Zealand. We've got probably the highest coffee quality in the world.

“The little corner cafe is probably at the absolute top level of coffee in the world because we went straight to expresso machines … So I guess you pay for that.”

Jeff Kennedy of popular Wellington cafe Prefab said prices at his cafe had not changed in years.

But inflationary pressures were ever present, and $4.50 was a small price to pay for what was for some people a warm alternative office.

“We never, ever pressurise anyone to buy more or move along, that’s a golden rule, and I suspect a lot of great cafes have the same kind of attitude.”

The CashNetUSA article also found that New Zealanders was far from being the world’s biggest drinkers of coffee.

That honour went to Luxembourg where a whopping 11.1 kilos of coffee per person was consumed annually.

New Zealanders drink a much more moderate 2.2 kilograms of coffee each per year, on par with San Salvador and Jerusalem and close to Canberra and Tokyo (2.1 kgs).

Countries which drank virtually no coffee – perhaps because they preferred tea – included India, Pakistan and Nepal, which all drank less than 0.1kg per person.

CashNetUSA’s figures were based on the average of five cafes in each capital, averaged across expressos, lattes and cappucinos.