The price of coffee is on the rise, but why is this happening?
How Much Coffee Does the UK Drink?
According to the British Coffee Association, we now drink approximately 98 million cups per day, working out at an annual coffee consumption per person of around 528 cups.
Why is it Becoming More Expensive?
At the end of the day, those selling coffee are doing so to make money; they’re businesses like any other. So, if their costs keep rising, it makes sense that the prices do too.
High inflation has been a problem over recent years in the UK, and this has included things like rent going up, and has also led to our minimum wage being increased to try to keep pace.
These things mean that coffee shops are paying more money for the space they rent and in staffing costs. Additionally, the cost of coffee itself has been increasing globally due to bad weather affecting crop growth, alongside higher shipping and freight costs.
A Global Issue
Commodity market analysis Judy Ganes has said that the cost of unroasted beans traded in global markets is now at a “historically high level”.
Climate change is a significant factor to rising coffee costs. In 2021, a freak frost meant the loss of coffee crops across Brazil, the world’s largest producer of Arabica beans which are commonly used in barista-coffee.
This led to buyers turning to countries like Vietnam, who are the main producer of Robusta beans (typically used in instant blends). However Vietnamese farmers then faced their worst drought in nearly a decade, leading to many abandoning the growth of these beans in favour of the durian fruit, which tends to bring more profits.
These factors have led to a constriction in supply, and yet our demand for the drink remains strong… and if we use basic economic principles of demand and supply, we can see that this leads to prices being pushed up!
If I Stop Buying Coffee Can I Buy a House?
Pointing out this price increase to one of our favourite hot drinks is not to say that by cutting down on your takeaway coffee, you’ll be able to buy a house, even though that’s a message that seems to be being pushed out at the moment.
In fact, research from The Rolling Bean estimated that you would have to forgo coffee for 280 years to save up enough money for a house deposit in central London (based on average spending of £5.50 a week on coffee). You can also see just how many cups of coffee it would take to buy your first home in different cities across the UK:
However, the price of coffee is definitely on the rise, and though steering clear from too many takeaway drinks might not buy you a house, it might give you a nice bit of extra money.