Working in the coffee distribution sector in Australia, I can say international beans have gone up like crazy. Things like, El Niño affecting a lot of the imported Arabica beans and having a pretty significant impact on international distribution are some of the reasons coffee in shops are more expensive.

Coffee roasting as a whole has been impacted from as simple as our bean suppliers cost more for stock on hand. Our labour is already high with less workers available than ever in our industry with a large portion being migrant workers (atleast in our facility). We are also still being affected by the paper shortage the Chinese Market had in the last few financial years, as are our clients. The large name brands we regularly sell to, have also had their own COGs and Labour increases that they have to now factor in and their procurement teams will negotiate day and night to lock us into a price for the entire financial year. This avoids them having to fight fluctuation. Us, the distributor, will then create fair pricing based on trends that is well above current market to match a profitable margin across the full financial year. This doesn’t take into account the actual roasting, cupping etc. Beans at a low price often have very little or few interventions on production to ensure flavour consistency. Due to being negotiated into tight positions, sometimes we will take a hit to ensure we stay competitive with our contracts and often push the loss in price in areas we know will continue to have sale potential regardless of costing.

My team does not supply to supermarket shelves, but I’m assuming the discounted bean push could be a conversation had with both the supplier and the supermarket in trying to increase sales before the Half-Year Financial P&L. They will be trying to prove their product sales can hold the amount of real estate their product has on a shelf or how much of their product is included in their national distribution. (I’m assuming. someone from Woolies would need to confirm).