Cappuccino Price Index rises 5.1% in 2005

The price of takeaway coffee in Brisbane is on the rise. According to Brisbane’s own “CPI”: takeaway coffee has an average price this year of $2.67 with the cheapest coffee being in the CBD.

The Cappuccino Price Index has been compiled by the latte loving people at Gilkatho Coffee to monitor Brisbane’s taste for cappuccino. First compiled in 2002, the lowest CPI of $2.37 was recorded in 2003.

Gilkatho Coffee manager, Wayne Fowler, believes there are many factors which affect the street price of a cappuccino. “The café/takeaway market is not inherently profitable. There is a lot of price sensitivity and low sales margins lead café owners to compete on price but also needing to quickly pass on any price rises. Takeaway prices ranged between $1.40 and as high as $3.50.”

Turnover in the Australia café & restaurant market slowed since the index started but is expected to increase. Total 2005 sales in Australia is estimated by the Australian Bureau of Statistics at $6,873 million and expected to reach $7,922 million in 2009.

The failure rate in the industry is another factor that is apparent in Brisbane’s own CPI. Each year 10% of the cafes surveyed disappear from the following year results. Wayne Fowler believes this reflects that cafes are like most small businesses. Their success relies on business experience, quality and cost controls, good staff and word of mouth recommendations.

The Cappuccino Price can be expected to rise in 2006. Staff costs and high quality Arabica beans used by most cafes have been rising over the past year. Distribution cost of coffee beans is also linked to fuel costs which can be expected to have some impact.

To beat the rising prices many offices are now installing convenient office coffee machines saving the takeaway cost and saving their staff from leaving the office.

For more details contact

Wayne Fowler
Managing Director
Gilkatho Coffee
0421 333 031
Gilkatho.com.au

4th October 2005

Methodology

Each year, Gilkatho carries out a survey of Brisbane’s Cappuccino prices in order to understand the retail price of cappuccino hot beverages and the implications for Gilkatho’s business planning. This information is used to compile the Cappuccino Price Index which is published internally in March each year. Selected cappuccino society areas in Brisbane are survey by walking into each establishment and obtaining the price of three hot beverages, cappuccino, espresso and long black for both takeaway and dine-in consumption.

The areas that have been surveyed are:

Brisbane CBD
West End
Milton, Park Road
Bulimba, Oxford Street
Ascot, Racecourse Road (2003 onwards)

About Gilkatho Pty Ltd

Gilkatho is a Brisbane based supplier of coffee equipment and supplies to hotels, clubs & offices in Southeast Qld. The competitiveness in the retail coffee market ultimately determines the attractiveness of alternative ways in which consumers can obtain espresso coffee.

The increasing price of takeaway coffee continues to support Gilkatho's business plan that it is more cost effective for office based consumers to use automatic coffee equipment to produce the same quality product at a lower price as well as achieve time savings of having the beverage prepared closer to their office.

Gilkatho was established in 1996 and operates from a coffee equipment showroom in Milton.

Visit Gilkatho's other websites

Main company website - http://www.gilkatho.com.au
Wide range of coffee equipment - http://www.coffee-machines.com.au