Latest Cappuccino Price Index
8 Oz Takeaway Capp
Shots fired in 2007 Brisbane coffee war.
Espresso shots are being fired daily in the streets of Brisbane as baristas compete for the caffeine-conscious consumer. In the face of rising costs, cappuccino prices have marginally increased by 5c in the past year.
It’s a caffeine bath on the battlefield when more than 30% of coffee outlets disappear or rebrand each year. The strong survive and the new entrants compete just to stay open.
Each year, Milton based coffee distributor, Gilkatho surveys over 100 coffee outlets in Brisbane to determine the average price of the takeaway cappuccino. The average price in 2007 is $2.85 up slightly from the 2006 average of $2.80.
Cappuccino prices are up by 1.8% in contract to the Australian Bureau Statistics CPI (food component) being up by 3.7%. Cappuccino prices are falling behind and café operators need to rely on increased volumes to maintain profitability.
With food prices increasing at a greater rate and some milk products having increased in price by 80% over the past year, the humble cappuccino is putting pressure on business.
Staff wages continue to rise in the market. Availability of staff is likely to be a problem in the future with Australia’s record low unemployment.
Compounding the problem for café operators is the psychological price barriers that people will pay for a coffee. Different areas of Brisbane have different barriers but ultimately a $2.95 coffee is a lot more palatable than a $3.05 cup.
My predictions from the above:
It’s a caffeine bath on the battlefield when more than 30% of coffee outlets disappear or rebrand each year. The strong survive and the new entrants compete just to stay open.
Each year, Milton based coffee distributor, Gilkatho surveys over 100 coffee outlets in Brisbane to determine the average price of the takeaway cappuccino. The average price in 2007 is $2.85 up slightly from the 2006 average of $2.80.
Cappuccino prices are up by 1.8% in contract to the Australian Bureau Statistics CPI (food component) being up by 3.7%. Cappuccino prices are falling behind and café operators need to rely on increased volumes to maintain profitability.
With food prices increasing at a greater rate and some milk products having increased in price by 80% over the past year, the humble cappuccino is putting pressure on business.
Staff wages continue to rise in the market. Availability of staff is likely to be a problem in the future with Australia’s record low unemployment.
Compounding the problem for café operators is the psychological price barriers that people will pay for a coffee. Different areas of Brisbane have different barriers but ultimately a $2.95 coffee is a lot more palatable than a $3.05 cup.
My predictions from the above:
- Café operators are likely to be under financial hardship now or in the next 12 months unless they can rise prices and/or increase consumption volumes.
- A wave of technology needs to move through the industry to improve productivity and use less people removing the wages and staff availability pressure.
- Espresso coffee trend to spread wider through the workplace.
- Coffee industry to remain competitive with expansion of chains ie McDs, Starbucks, Gloria Jeans.
- More than 60% of surveyed cafes decreased or did not change their prices. This indicates the competitive pressure. Research over the past five years shows that well managed franchise chains are more likely to pass on regularly small price increases and thus keep abreast of rising input costs.