As a result of the recent economic turmoil, the street price of a takeaway cappuccino will rise each year, even when green beans are in abundant supply.

This Gilkatho Cappuccino Price Index (tm) series is based on the average Brisbane takeaway price.

The cost of green coffee beans has risen over the past few months.This means that the wholesale price of roasted coffee beans to each café has probably risen, or soon will. Coffee beans are just one ingredient in the delivery of the cup of coffee. Other costs which have also risen and will impact every business owner include:shop rents, milk prices, staff wages and furniture.

Retail coffee prices rise over time as a consequence of the many rising costs associated with running a food business.  

At an average price of $3.20 for a takeaway coffee how much of this is the coffee?  

Consider that the wholesale price of a bag of coffee would be in the range of $20-$25 per kilogram and each kg will produce approx 120 cups of coffee. Each shot of coffee will cost 17 to 21 cents per shot. Based on this, the quoted increases of 25% of the green bean coffee would indicate a 5 cent cost rise per cup.

Contrary to popular belief, opening a coffee shop is not a ticket to success. Due to the competitive nature of the café business, the final profit margin for the café owners is quite slim. An increase in any one of their business inputs has a dramatic affect on their final earnings.

Over the last two years, the global financial crisis has subdued customer spending and restricted the ability of café operators to pass on their increased costs. With some vibrancy in the market, now operators feel that they will be able to pass through a small price rise to the end user.

Our research shows that 50% of cafés have already increased their prices. The increases have been between 10 to 50 cents.

Other direct costs that need to be considered in delivering that beverage include: 
GST at 10% = 32 cents.
Takeaway cup & lid = 18 cents
Milk = 16 cents
Sugar & stirrer = 1 cent

Indirect costs of business need to be paid out of the remaining. The indirect costs include rent, wages, bank charges and eftpos fees, telephones, websites, business loans, tables, chairs, aprons etc.

According to international figures Australians will this year consume 2.7kgs per man, woman and child.  

Australia's coffee consumption totals for the current three year period are shown below.
Source: US Food & Agriculture and Australian Bureau of Statistics.