Cost of living brewing shift back to home coffee, Nestlé says

Cappuccino sachets and instant coffee gain ground as households feel the pinch

By LineZotpaper
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Nestlé says Australia's coffee culture is shifting back to the kitchen as cost-of-living pressures push households toward cheaper instant options, with the company's Gympie plant producing about 20 million cups a day.

At Nestlé's Gympie plant in Queensland, a team of 10 tasters samples up to 100 cups of coffee a day to ensure every batch meets the company's standards. Quality assurance manager Glenn Jones, who described himself as the "chief taste-taster", said he still drinks coffee outside work hours.

"I need coffee before I come to work in the morning, then I taste it all day, and I'll have coffee on the weekends. I love coffee," Mr Jones said.

The factory, which has produced instant coffee since 1997, makes about 20 million cups a day. The company said the plant reflects an Australian obsession: an estimated three-quarters of Australians consume coffee regularly, and more than 5 million visit a cafe daily.

But Martin Brown, general manager of Nestlé's coffee and dairy business, said sales figures show a shift back to home consumption as households feel the pinch.

"[Australia has] one of the most sophisticated coffee cultures in the world, but we also have a cost-of-living challenge at the moment," Mr Brown said. "A lot of households are having to make choices and find smarter ways to buy things."

He said cappuccino sachets had been the "fastest-growing part of the market" in the past five years, but there was also a move back to traditional soluble instant coffee. A cup of Blend 43 costs 12 to 15 cents.

"It's super convenient and it's value for money and none of that goes out of fashion," he said.

The latest Australian Bureau of Statistics data showed food and non-alcoholic beverage prices rose 3 per cent in the 12 months to August, with meals out and takeaway prices up 4.5 per cent.

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Analysis

Why This Matters

  • Cost-of-living pressures are reshaping a defining part of Australian consumer culture: how people buy and drink coffee.
  • Nestlé's sales data offers an early signal of whether households are trading down from cafes to home brews, with broader implications for the hospitality sector.
  • If the trend continues, expect further discounting and value-focused products from major food companies.

Background

Australia has long been known for its sophisticated coffee culture, with a large share of the population drinking coffee regularly and millions visiting cafes each day. The instant coffee market has been a household staple for decades, and Nestlé's Gympie plant has produced it since 1997. The current cost-of-living squeeze is the latest factor pushing consumers to reconsider how they spend on coffee, mirroring a broader shift toward value in grocery spending.

Key Perspectives

Nestlé: Sees a lasting move toward value, with cappuccino sachets the fastest-growing segment and traditional instant coffee like Blend 43 offering convenience at 12 to 15 cents a cup.

Households: Facing higher food prices and more expensive meals out, households are making trade-offs and finding "smarter ways to buy things", according to the company.

Cafe industry: With more than 5 million Australians visiting a cafe daily, any sustained shift away from cafe purchases could put pressure on hospitality operators competing for budget-conscious customers.

What to Watch

  • Whether ABS food price data continues to show rising costs for meals out and takeaways in coming months.
  • Sales growth of cappuccino sachets versus traditional instant coffee, an indicator of how deep the value shift runs.
  • Any discounting or value menu moves from cafes responding to competition from home brews.

Sources

Zotpaper

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