In New Zealand, where inflation is on the rise, rising prices are putting a strain on people's lives. The other day, news broke that coffee prices were going to go up.
This site is about the appeal of New Zealand wine, but in fact Kiwis (New Zealanders) are also huge coffee lovers, and you can drink delicious coffee anywhere in New Zealand.
In this article, we bring you news about price increases along with stories about New Zealand coffee.
Did the flat white originate from New Zealand?
Flat White is now seen in Japan, though rarely. It is a drink similar to a caffe latte, but to put it very simply, a flat white has a stronger coffee flavor and less milk than a caffe latte.
There are many drinks that people debate over whether they originated in New Zealand or Australia, and the Flat White is one of them.
People with ties to New Zealand (including the author) all insist that it originated in New Zealand, but the same goes for Australia. On this site, we would like to say that it originated in New Zealand!View this post on Instagram
Starbucks not popular?!
Did you know that New Zealand has a surprisingly large number of wonderful cafes?
Coffee Supreme, pictured above, is the first cafe and roastery in the capital, Wellington. It has also expanded into Japan, with a store in Shibuya.
It's a small country with a population of 5 million, so the market is not large, but you can find cafes where you can drink delicious coffee not only in big cities like Auckland and Wellington, but also in small towns in the countryside. (I was surprised by how delicious the takeout coffee was from a small coffee stand in the middle of nowhere, surrounded by farmland and no other shops.)
Perhaps because of this, while Starbucks is rapidly expanding the number of its stores in Japan, its number in New Zealand has gradually decreased from a peak of 50 stores to just 22 as of 2018.
According to the company that operates Starbucks in New Zealand, the coffee culture in New Zealand is already very strong, and it was very difficult to compete with local cafes with strong brand power that offer more personal service. It was difficult to expand the customer base beyond students and tourists, which are Starbucks' main customer base.
I'm sure Starbucks' local cups are popular with tourists. (I want one too.)View this post on Instagram
Price increase, but is it reasonable?
But there's bad news for all those coffee-loving Kiwis. It's been reported that the price of coffee will finally rise to nearly $6 (about 480 yen) per cup in some areas.The price hike is a further blow to restaurants, which are already struggling due to lockdowns and restrictions on movement caused by the spread of the new coronavirus. However, they are being forced to raise menu prices due to rising labor costs caused by the minimum wage hike and soaring prices of ingredients such as coffee and milk.
Hangar, a popular cafe in Wellington, is raising the price of a cup of coffee by 50 cents (about 45 yen). A flat white will now cost $5.70 (about 460 yen).
View this post on Instagram
There is a lot of talk among us in the industry that a flat white should be around $7. That is the realistic price, but the market seems to have settled on a middle ground of around $6. In order to continue doing business, a price increase is unavoidable.Jimmy Phan, who runs the cafe, commented:
The price of coffee beans went up last December, and the price of milk has increased two to three times since the cafe first opened.
According to one example, labor costs account for 30% of the cost of one cup of coffee, at 31%. 29% is the cost of ingredients such as coffee and milk, 14% is the cost of equipment, and 11% is tax, leaving a profit of 15%. These are tough numbers for running a cafe.
Earlier this year the Reserve Bank of New Zealand (the central bank) forecast average inflation to be 4.4% over the next 12 months, accelerating from 3.7% in a survey at the end of last year.
The inflation rate is expected to accelerate over the next two years, and rising prices are likely to affect travelers from Japan in the future.
