While it might be a hefty upfront cost, it can end up saving people plenty of cash over the long term. But Dan Dick, a Melbourne cafe owner, told Yahoo Finance that this could have a major impact on the viability of some businesses.
"Those of us who drink multiple coffees a day, we might start preferencing from having two or three in cafes to having one or two at home and one in a cafe and I think that will start to reflect in certain spaces," he said.
He believes cafes in and around CBDs across Australia will be fine because there is still a big coffee culture for workers, but the smaller, more remote ones might struggle.
E-commerce and logistics platform Shippit saw an 85 per cent jump in the month-on-month sales of at-home coffee machines in November.
Year-on-year data shows December 2024 orders were 29 per cent higher than the year prior.
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Rob Hango-Zada, co-CEO and founder of Shippit, told Yahoo Finance these numbers were not surprising given the current economic climate.
"The jump in coffee-related orders we saw over the last 12 months shows just how much people are embracing the idea of recreating their favourite cafe experience at home, especially with the popularity of work-from-home arrangements," he said.
"It’s all about convenience, saving money, and still getting that great cup of coffee, and it’s becoming a real trend."
Is it cheaper to make coffee at home?
It all depends on what machine you get though as some can be picked up for less than $100, but there are some that cost thousands of dollars and come with all the bells and whistles.
Some will froth the milk and grind the beans for you, while you might have to purchase each individual piece to bring your daily coffee to life for the cheaper options.
Consumer group CHOICE crunched the numbers and found that if you had two double-shot coffees from a cafe worth $4.80 every day, you'd fork out $3,504 in a year.
But getting a coffee machine worth $1,200, which works out to be $150 per year for the machine's roughly eight-year lifespan, plus the beans, milk, parts, and maintenance, you'd only spend $1,284 for the same amount of coffees.
Hango-Zada said brands like De’Longhi, Breville, and Nespresso had been booming recently and Aussies have also been investing in coffee equipment like milk frothers and coffee grinders.
"The rise of specialty brews, WFH models, interest in sustainable practices, and budget-conscious Aussies seeking to get the best bang for their buck long-term, will continue to drive innovation in the at-home coffee market," Hango-Zada.
"For retailers, tapping into this demand could be a lucrative opportunity."
As cafes battle to stay alive, Aussies draw a line in the sand
While a decline of just one to two coffees per person per day might not seem like a lot to the individual, it could mean the difference between staying open or shutting down for good for the cafe.
They already operate on incredibly tight margins and they are battling the cost-of-living crisis just like everyone else.
But in addition to rising rents and utility bills, cafes are also battling a major jump in the price of their bread and butter. Not literal bread and butter, but the actual price of coffee.
Aussies are turning to at-home coffee machines to keep costs low. (Source: Getty)·mixetto via Getty Images
Arabica, which is the main type of coffee consumed in Australia, hit a record high a few weeks ago and surpassed the all-time peak set in 1977. Just before Christmas, Arabica futures jumped as high as $US3.48 (AUD$5.45) per pound in New York, but that has now fallen slightly to $3.27 per pound (AUD$5.26)
Brazil, one of the biggest producers of coffee beans, endured higher-than-average rainfall in October, followed by drought-like conditions and high temperatures.
Vietnam, another huge coffee bean producer that focuses on the robusta variety, has also been facing a severe drought that has impacted supply.
If cafes have to pay more for each bag of coffee beans, many will have no choice but to pass that price on to consumers. That might be only 50 cents or $1 for some, but it could be even more for others.
There are even some predictions that a flat white could cost up to $9 in the near future.
More than a third of Yahoo Finance readers (38 per cent) said they would stop getting a coffee if it became $5.50 or more.
Coffee high on the chopping block to rein in costs
As Aussie consumers tighten their belts, coffee can be one of the first things they cut out.
A poll of more than 1,000 Yahoo Finance readers found coffee ranked second on the items that Aussies will stop spending on in 2025 at 18 per cent, compared to eating out, which scored 35 per cent of the vote.
Bonnie Munro, who runs the Boho Bubbles and Brew Mobile Bar and coffee shop in Queensland, told Yahoo Finance that while she understands people need to look after their finances, it's worth making sure their local cafe can survive.
Bonnie Munro is begging Aussies to not forget about small business owners like hers when they're looking at cutting down their spending. (Source: TikTok/Supplied)
"Please don't forget about us, because that is our only income," she told Yahoo Finance.
"Cutbacks are fine and everyone's struggling, and I'm one of them, but just don't forget about the small businesses."
The food and beverage sector recorded the highest failure rate of all industries in October, according to the latest CreditorWatch business risk index.
That index also showed that Aussie businesses have been failing at their highest rate (5.04 per cent) since the height of the COVID-19 pandemic in October 2020 (5.08 per cent).
How cafes can diversify to keep the lights on
Dick owns four cafes and also has his own coffee-roasting business, Born and Raised.
He said this new at-home coffee-making trend means he'll be able to lean on the latter venture for the meantime.
"I'm literally on my way to send out a couple of parcels, and one of them's going to Wodonga, and one of them's going to Canberra, and several of them going to regional Melbourne," he told Yahoo Finance.
"I can't sell a latte to someone in Wodonga, but I can sell them beans."
He urged Aussies to shop around and choose the "small people" when looking for their coffee beans as that can help keep independent businesses alive.
But he's hopeful that at-home coffee machines won't completely spell the end of cafes.
"For some people, it doesn't matter how much you stack the financial benefits of making coffee at home, they still enjoy the ritual of walking down the street or leaving the office or meeting friends for a brew," he said.
"That social element... It's never going to change."
