Instant Coffee Booms as Prices Rise

Australians are turning to instant and home-brewed iced coffee as café prices climb above $7 per cup. This shift is prompting households to seek more budget-friendly caffeine options. Nestlé’s Nescafe brand is benefiting from this trend, recording strong double-digit sales growth as more consumers move away from barista-made coffee. However, this rise in at-home consumption could put pressure on Australia’s well-known café culture.

With inflation squeezing household spending, many are skipping their daily café visits in favor of quicker and cheaper alternatives. Iced coffee concentrates are especially popular among younger Australians who are drawn to the lower cost and customisation these products offer. Nestlé, which owns Nescafe and Nespresso, is adapting to this shift by expanding its range of home coffee products aimed at both budget-conscious and quality-driven consumers.

Globally, coffee bean prices have soared due to poor harvests and disrupted supply chains. Arabica beans, considered the preferred choice for baristas, have risen 60% in 2024. Robusta beans, commonly used in instant coffee, have doubled in price. In Australia, where milk-based coffee is most popular, robusta’s stronger flavour complements instant varieties such as Nescafe Gold which is currently the fastest-growing brand in its category.

In the long term, companies like Nestlé still see value in maintaining a strong café sector. Their strategy depends on striking a balance between growing in-home coffee sales and supporting a café culture that helps shape retail trends. While higher bean prices are creating short-term cost concerns, global supply may recover by 2026 which could ease some of the pressure across the industry.

At the same time, innovation in instant coffee, from pre-mixed cappuccino sachets to flavour-infused concentrates—is helping to improve both quality and convenience. These products provide greater accessibility without compromising on taste, which is key as more Australians move away from specialty cafés but continue to enjoy their daily coffee ritual.

Source: The Australian, Statista, GlobeNewswire, Corner Coffee Store