The waste of space formerly known as the media had a good laugh at your expense over the weekend, that you can still afford or want to pay $7 for a coffee. SMH.
Coffee roasters and baristas are the unsung heroes of Sydney hospitality. It takes a special person – part scientist, part artist, and part sustainability advocate – to take coffee beans and craft them into caffeinated magic. The teams at these cafes and coffee shops are some of the best.
Actually, it takes somebody desperate to stand up all day doing nothing. That is setting the bar for “special” so low that it would include most crawling insects.
If one were to look at the following chart, we might think that there was hope for occupying the hands of these idle folk.
Better weather in the latitudes of the Americas and demand destruction from the price spike are starting to bring the price down. Global inventories are creeping up as well.
The problem is, coffee is not the problem. Everything else is.
This mix is not that out of step with other nations. Most are roughly two-thirds rent and wages, though the split differs.
What is different is that Australian real incomes have not kept pace in the same way as they have elsewhere, and so the recent coffee spike has been felt more keenly.
The really bad news is that coffee price rises are, in fact, cheap versus the broader CPI!
And there is no obvious fix coming for real incomes; cafes will continue to close.
And, eventually, the new equilibrium price for a coffee will have to settle much higher than it used to be as supply is rationalised.
The heroes of $7 coffee are here to stay.
