Coffee bumps tea off the top spot in Australia

Coffee has been named king of hot beverages in Australia, usurping tea’s position as the at-home drink of choice among Australians. According to BIS Foodservices’ Coffee and Beverages 2012 report series, Australia is becoming a coffee nation.

“Coffee is now the at-home beverage of choice for Australians, replacing tea for the first time,” Rosengren said. “This has been driven largely by the significant fall in cost of making an espresso-based coffee at home, combined with a maturing coffee palate. In addition, coffee is now the number one hot beverage across all age and socioeconomic groups.”

Away-from-home purchases of coffee have increased from 1.8 billion units in 2010 to 2.1 billion in 2012, representing a jump of 19.5%. This is despite the price of coffee increasing sharply in the last two years, edging towards $4 a cup for the first time.

The price of an away-from-home, espresso-based coffee rose 7% from an average of $3.62 to $3.86 per cup.

“The away-from-home coffee market is expected to grow between 10 and 15% within the next two years, driven very much by the younger generation, while coffee consumed in the workplace - both made at work and outside the workplace - is also expected to rise,” Rosengren said.

“The signs are there that Australia is becoming a coffee nation. Pod machines are very likely to increase at home and at work, while by 2020 we fully expect the espresso-based coffee to overtake the instant/soluble variety.”

Coffee’s rise has coincided with tea’s demise. According to the report, the average number of units of tea consumed per person per week at home has fallen from 8.6 to 7.9.

“The demise of tea can largely be attributed to the demise in popularity of black tea,” Rosengren said. “Green tea and other types of tea have tracked reasonably well over the same period, but black tea with milk in particular has seen a sharp decline in popularity.

“Tea actually tracks well in the home environment but falls short away from home, unlike coffee,” says Rosengren. “Operators need to understand the value in producing a better quality cup of tea. In 2012, we still have the extraordinary situation where many high-end cafes use tea bags instead of tea leaves in a pot despite it being well known that using tea leaves will produce a better quality cup of tea.”

Rosengren suggests that companies need to promote the health benefits of tea in order to stem the flow of people deserting the drink. Tea producers should also market the beverage to a younger demographic that is embracing coffee.

“Tea is simply not resonating with younger individuals,” Rosengren said.

The rest of the economy might be struggling, Rosengren says, but coffee is booming. “Despite downturns elsewhere, the coffee industry has joined mining in the tier of the economy that is tracking well,” Rosengren said.

The full report is available via the BIS website.