Why is a flat white getting so expensive?
Tuesday, 12 November 2024
The humble flat white is still a popular coffee order, but prices are set to continue to rise.
Bustle, a Kiwi tech company for cafes, revealed new insights into the nation’s favourite coffee orders and found a flat white accounted for nearly half of all coffee sales on Bustle’s platform.
In the first half of 2024, a monthly average of 1155 flat whites were ordered per hospitality outlet, with cafés specifically recording much higher numbers. This was followed by lattes, cappuccinos, long blacks, and mochas.
But the average price of the flat white had increased by 16%, from $5 in 2021 to $5.80 in 2024 and sales had dropped 12% in the first half of 2024 compared to the same period in 2023.
According to Stats NZ data from October, the price of restaurant meals and ready-to-eat food was up 3.5% annually, with takeaway coffee one of the culprits for the rise.
The International Coffee Organization (ICO) also reported in July that the ICO Composite Indicator Price, a reference price for the global coffee industry, had hit a 13-year high.
Bustle founder Jonny McKenzie said there was a ‘perfect storm’ of factors that saw a decrease the number of flat whites purchased.
“Many cafes had to tighten up their hours, especially after a lukewarm summer, to keep operations lean. Couple that with people feeling the pinch and cutting back on those ‘extra’ coffees – that second flat white after a meal or mid-morning pick-me-up didn’t always make the cut.”
Aotearoa’s hospitality industry continued to face headwinds with the state of the broader economy and industry specific challenges including global increases in the price of coffee.
“While the cost of a cup of coffee has increased, the hospitality sector, like most other industries in New Zealand, is being faced with soaring costs including the price of milk and coffee beans, and other factors such as weather events, and rising production and operating costs,” McKenzie said.
“It’s likely we’ll see prices inch up as more cafes align with market trends, but not at the same pace we’ve seen in the past.
“The big factor here is the global price of green beans. If that jumps, cafes might have no choice but to adjust accordingly.”
But people were willing to spend more on their favourite beverages, with an 102% increase in iced latte orders through the platform, compared to the same period in 2021.
For outlets that serve iced lattes, an average of 168 were ordered per month in 2024, up from 83 per month in 2021.
Matcha orders also surged by 84% over the same period and iced americanos and iced chais also rose in popularity, with orders increasing by more than 50%.
The average price for an iced latte was $6.93 and a matcha was $6.78.
Tomás Marin from Blackbird Espresso Bar in Ponsonby had noticed an increasing demand for iced drinks, matcha, and dairy-free alternatives.
“We’ve adapted our menu to keep up with our customers’ evolving tastes.”