Why Is Coffee So Expensive?

Why Is Coffee So Expensive?

It’s a question you’ve probably pondered while sipping on your double shot oat latte. But perhaps the better question is, why doesn’t it cost more? The reality is that while the cost of operating in the coffee industry has steadily increased over the years, cafes and roasters have been apprehensive about passing it on to customers in fear of losing them in such a competitive market. 

In 2023, you wouldn’t think twice about paying $15 for a glass of wine. Still, we’re conditioned to view coffee as a commodity rather than the high-grade agricultural product it is - with more steps, human power and often travel than its boozy counterpart. While we’re just as averse to the idea of $10 cuppas as you, we thought it important to outline why the cost of specialty coffee is rising and why an expensive coffee is, in reality, fairer than a cheap one. 

Highly laborious process

The steps taken to produce a cup of coffee are arduous, and they are many. Before you even get to the picking of coffee cherries - done individually, by hand - the process of growing the plants themselves is a massive effort. Not only do coffee plants take two to four years from planting to even producing a cherry, significant time and resources go into soil maintenance, pest control, watering and general tending of plants. That’s before you even consider the added hurdles farmers face with climate change; more on that below. 

Once harvested, coffee is hand-sorted, de-pulped, fermented, washed, dried, hulled, packed, shipped and finally roasted, cupped and packaged. Then a skilled barista is tasked with grinding, brewing, texturing milk and maybe even some latte art if you're lucky! In comparison, producing wine involves fewer steps, less manual labour and often shorter transit, plus next to no time or skill is required to pop a cork and pour. 

When you consider the specialty coffee process as a whole, the only thing left to wonder is how on earth a cup of coffee is still half the price of a glass of wine?

Rising cost of operating

As we transitioned from lockdowns into covid-normal early 2022, the price of everything from petrol to lettuce skyrocketed due to floods, Russia’s invasion of Ukraine, product shortages and a lingering hangover from the pandemic. Fast forward to 2023, and rising inflation has affected the cost of living and running a business so much that it’s widely regarded as a crisis. 

For us, over the last couple of years, our shipping container and rent costs have doubled, while electricity, gas, wages, freight and other overheads have noticeably risen too. Additionally, suppliers of milk, alternative milk, cups, and other products have (understandably) started to charge more. With a weak Australian dollar resulting in a 50% increase in coffee prices for our 2023 harvest, there’s only so long we, like other cafes and roasteries, can absorb the costs. 

Improved quality, more demand

Once upon a time, coffee was farmed for quantity over quality. As cafe culture spread and the popularity of specialty coffee boomed, the demand for quality coffee grew. In order to remain competitive, farmers had to implement more time-consuming and complicated practices to improve quality and produce a desirable product. 

As things go, the better the quality, the more you pay! Today’s coffee is not only a high-grade agricultural product, but roasting and brewing methods are more advanced and, consequently, more expensive. There are now also markets for particular farming methods and specific areas that produce rare, therefore expensive, beans.

Climate change impacts

Due to the disastrous and ongoing impacts of climate change, there’s been much chatter about whether the world will run out of coffee by 2050. In order to combat rising temperatures, farmers have been forced to implement strategies including pest control, shade planting and extreme weather crisis management to protect plants. All of which require additional resources.

Despite these efforts, coffee farms could become incompatible with new climate conditions and completely disappear. As we saw in 2021, freak frosts across Brazil’s coffee growing regions caused widespread destruction, resulting in the loss of millions of bags of coffee and farmers’ annual incomes. While this was unfolding, global coffee consumption didn’t slow down. As the basic rules of supply and demand go: if demand exceeds supply, prices will rise. 

So if climate change continues to decimate coffee production across the ‘bean belt’, we can expect a higher priced cuppa and disastrous repercussions for the 25 million farmers whose livelihoods depend on it. 

Our final thoughts

Coffee is one of the most exported goods in the world, but coffee farmers are some of the poorest. We think it’s time to recognise that all coffee is more than just a commodity; it’s a result of an elaborate and specialised process worth paying for. At Corner Store Network, we practise ethical coffee trade and firmly believe in paying farmers directly and fairly for their beans. For our 2023 Matanova harvest, we paid 73% more than the Fairtrade minimum and 44% above the world price. You can view our Transparency Report for a full breakdown on costs. The more farmers earn, the better their farming practices and the higher quality the end result will be. 

Low-cost coffee often means unethical trade, so you should be wary of any cuppa that seems excessively cheap. That said, keep in mind an expensive coffee doesn’t necessarily mean farmers are getting paid more, so do your research and check supply chains before settling on a cafe or roastery. Again, check out our Transparency Report to see exactly where your money is going with every sip of our specialty organic coffee.   

Lastly, to save some dosh while partaking in your favourite morning drink, you might consider swapping your barista-made brew for one made at home or work. For the price of three lattes, you can buy a bag of coffee for home and make upwards of ten yourself, depending on how you drink it. And that’s with just our 200g bags; the bigger the bag, the bigger the saving! We also offer three coffee varieties at different price points so you can find something that suits your budget. If you can’t fit a home coffee into your schedule, you can always save a few bucks by ditching the milk and learn to enjoy black coffee while taking in different flavour profiles from different regions.

We will leave you with this: if you see coffee prices going up, please keep an open mind. When you purchase from an ethical coffee roaster or cafe, it means farming families are earning what they truly deserve, which is a great thing.