Would you pay $7 for a coffee?

Photo: Getty Images
Photo: Getty Images
At a reported $7 a cup, coffee prices in Australia are going through the roof - but could the same thing happen in New Zealand?

"It's kind of the perfect storm," said Joe Stoddart from Havana Coffee Works in Wellington.

"We've got a scenario where there was a frost in Brazil last year, which meant that heaps of coffee got damaged.

"Brazil is the largest producer of coffee in the world and it means that there's a limit on how much high quality coffee there is to buy in the world, that was coupled with coming out of a drought and then you've got shipping delays and prices in some situations around the world [are] quadrupling.

"Right now for producers, it's hard to even get your hands on a container that's food grade, let alone book something that's going to come to this part of the world."

Stoddart said the situation was not limited to New Zealand and it was not just shipping delays.

"You've got a scenario where all costs are going up because of social distancing in developing countries, [which are] coffee producing countries, as well as what we're going through here in Australia and New Zealand. The price of diesel is going up.

"All in all, the costs are going through the roof."

Stoddart said it was supply and demand which dictated the price for high quality coffee. If there is a glut of raw coffee in the world, the price will drop and if there is a limit or a perceived limit on coffee, then the price goes up.

Asked if coffee here could reach the sky-high prices of $7 a cup as reported in Australia, Stoddart said potentially - but that it was also to do with perception.

"What you have to understand is that all of it is perception of the costs going up, so in my position I buy most of my coffee directly from the people who produce it, so I don't necessarily let people who are the middle men take some of that profit.

"I'm in a position where I can get them more money at the same time as not spending too much money so I'm in quite a luxurious position. I'm not buying on a spot price that's set by the market, but my job is as a conduit between the producer and the customer here.

"Some grocers and people who are selling coffee here are going to be in that position but not necessarily everybody, because it's how you position what you're doing and how far out you see what is happening, is happening.

"You've really got to understand the the wider picture - but also you have to appreciate that the cost of living for producers is through the roof and they may not have necessarily been getting what they should have been getting for a long time."

But is now the time to invest in a machine to make it yourself at home?

"As a coffee drinker, we average spending about $1800 to $2200 a year on cups of coffee at a cafe," Stoddart said.

Stoddart said if you were to buy an espresso machine, even second-hand off TradeMe, you would be looking at about that price to begin with and about $1000 a year maintaining the machine, plus $40 to $60 a kilo for high quality roasted coffee, which New Zealand had a lot of.

"If you do this ... then you're saving hand over fist, but the real clincher is that the suburban cafes and the cafes that need us to buy coffee from them still need us to buy coffee from them ... you have to be real careful that cafes that you love to socialise in aren't going to keel over because you decided you weren't ever going to go and get a coffee again out, it's a double-edged sword.

"We really need to support those cafes, but if you really are passionate about high quality coffee then definitely invest in it, because life is way too short to be drinking awful coffee."

And is New Zealand coffee really better than Australian coffee?

"Part of the scenario is that we've got a really saturated market and that market is of a really high calibre," Stoddart said.

"For the last 20 to 30 years we've been stepping up to each other's plate, but we've all been raising our own bar.

"We freaked them out when we go to Aussie from New Zealand, because they think that they're great and that nothing has a mark on them, but Australians will come here and say that this is the best coffee they've had and so it's kind of an industry secret to a certain extent.

"What we're doing to the product, it comes such a long way from overseas that we really treat it with respect, so the industry in New Zealand is cutting edge.

"We're pushing way above our weight and it's because the customer is demanding it. It is really hinged on the fact that Kiwis hate having a terrible cup of coffee, so we've got to make it amazing."

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