The Economy, Stupid
The coffee paradox
Jun 13, 2024
Exploring the discrepancy between rising coffee bean costs and stagnant cafe prices, the podcast covers the impact of input costs on pricing, challenges in the Australian hospitality industry, supply challenges due to weather events, post-pandemic growth of cafes, and the evolving coffee culture in Australia.
29:00
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Quick takeaways
- Coffee prices in cafes do not reflect rising commodity market costs, undervaluing coffee by about 50-60 cents per cup.
- Climate change impacts coffee production, making sustainable farming practices crucial for stable supply chains.
Deep dives
Impact of Rising Coffee Prices on Consumer Costs
The podcast explores the discrepancy between the soaring price of coffee beans and the relatively unchanged cost of coffee in cafes. Despite various input costs rising significantly, coffee prices haven't proportionally increased, leading to coffee being undervalued by about 50 to 60 cents per cup. Factors like global commodity trading, increased production costs, and inflation contribute to the unsustainable pricing of coffee, with experts suggesting that a standard flat white should cost north of $5.50 for businesses to operate sustainably in the market.
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