Teuila Fuatai

Teuila Fuatai is a reporter for the NZ Herald

Coffee bean squeeze won't hurt Kiwis

How much would you be prepared for one of these?
How much would you be prepared for one of these?

Kiwi coffee drinkers are being reassured international price hikes will not affect the cost of their daily cuppa, with industry experts expecting local suppliers to weather a spike in the price of coffee beans.

Costs for the beans have shot up by about 20 per cent in the past two weeks, after speculation that drought conditions in Brazil - the world's leading Arabica bean supplier - could lead to a shortage in good-quality beans.

Despite this, New Zealand's coffee market gurus believe most local suppliers have sufficiently buffered themselves against the hike in bean costs.

Savings made over the past year where the price of coffee beans fell were not passed on to coffee drinkers, OMF commodities broker Tim Kronfeld said.

"With the strength of the kiwi dollar, coffee prices aren't likely to move much, simply because the real discounts have already passed through.

"There's a fair amount of that [price increase] the wholesaler will be able to absorb," he said.

Industry insiders have also said New Zealand's preference for high-quality coffee has aided in keeping local prices relatively stable.

At the moment, a cup of barista-made coffee costs between $3.50 and $5. Havana Coffee managing director Geoffrey Marsland said it wasn't uncommon for local suppliers to buy beans well above the standard market price because of the type and the quality.

"I've been in the business 25 years and I've seen it [price changes] come and go before. I don't think the consumer's going to get it, because it's gone from a very low price to a steep climb."

Beans used by Havana Coffee were almost twice the cost of the "New York C" (standard price), Mr Marsland said.

"People in New Zealand are so spoilt for the coffee. People that like coffee drink good coffee and they know where they're going to get it. They're very habitual."

New Zealand Specialty Coffee Association president Carl Sara, who also founded the Crafted Coffee Company, said the price increase in coffee beans was "manageable".

Other expenses had to be factored in to the price of a a barista-made coffee, Mr Sara said. These included milk costs, cafe overheads and staff wages.

A spokesperson from the Countdown supermarket chain said there had been no indication of a possible rise in coffee prices from their suppliers.

However, "the price for coffee does fluctuate depending on what global factors may be affecting the countries where coffee is produced".


Caffeine hit costs $150 every month

Auckland dentist Cameron Roling spends about $150 a month on coffee.

The 25-year-old Grey Lynn resident buys at least one barista-made coffee a day, and also drinks plunger coffee.

While he didn't mind paying around $4 for a store-bought cuppa, any rise in prices would likely lead to second thoughts at the till.

"It would be annoying. Once you break the $5 barrier, I guess it would be a bit of a hindrance. Five dollars is getting pretty expensive."

Mr Roling said he wasn't too fazed about cafes not passing on any savings made during last year's low coffee commodity prices.

"Running a cafe isn't cheap. As long as they try their best to keep the prices the same this year, it should be okay," he said.

- APNZ

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