South African coffee enthusiasts find themselves grappling with an unsettling reality: the cost of their beloved brews has surged dramatically over the past year.
According to recent insights from Eighty20, the past twelve months have not been kind to coffee drinkers.
Prices have soared above those of any other food or beverage product, creating turbulence in a market once dominated by the familiar comforts of instant coffee and artisan blends.
While the South African Reserve Bank has successfully reduced inflation to below 4.5%, coffee prices have proven resilient to these efforts—a bitter pill for millions of daily consumers.
In August 2024, the price of instant coffee rose a staggering 22.3% year-on-year, marking it as the food and beverage item with the largest inflation rate.
As a result, the cost of 250 grams of instant coffee skyrocketed from R52.71 in August 2023 to R67.37. In contrast, ground coffee and beans have fared slightly better, with a more moderate 13.6% increase, igniting a noticeable shift in consumer preferences.
Data from the MAPS survey, conducted by the MRF, indicates that while around 20 million South Africans continue to enjoy their daily cup of coffee—roughly half of the adult population—fewer people are reaching for instant options. Daily consumption of instant coffee has plummeted by 12%, while ground coffee and beans have seen a remarkable surge, rising by 58% compared to last year. Instant coffee remains the most popular choice, consumed daily by 18.8 million South Africans, yet the writing is on the wall: taste buds are changing.
"Nearly half of coffee drinkers prefer Ricoffy, a clear favourite in South Africa, enjoyed by more people than the next five leading instant coffee brands combined," Andrew Fulton, Director at Eighty20 said.
This competition highlights the complexities of a coffee landscape that is rapidly evolving.
Demographics tell a telling story.
Instant coffee drinkers average 1.7 cups per day, while ground coffee aficionados boast a slightly higher intake of over 1.9 cups.
Interestingly, consumption patterns reveal a clear divide: instant coffee drinkers are predominantly Indian and Afrikaans, particularly concentrated in Gauteng and the Western Cape.
Meanwhile, ground coffee drinkers tend to be English-speaking, middle-class couples, hinting at a socio-economic stratification within the coffee market.
Eighty20's analysis, which categorises the South African population into eight segments and 46 sub-segments, reveals that the Middle Class and affluent "Heavy Hitters" represent 15% of the adult population yet account for nearly a quarter of the estimated 2.1 million ground coffee drinkers.
Despite the proliferation of coffee shops in urban centres, the wealthier demographics predominantly fuel the demand for ground coffee.
Niche markets like coffee pods are also experiencing a downturn, with a 30% reduction in daily consumers compared to last year.
The allure of luxury has been stifled by rising inflation; for example, Nespresso’s Pumpkin Spice Cake Limited Edition pods retail for R163.00 for a pack of 10, making each pod about 10 times more expensive than a cup of instant coffee.
Consumer surveys from BrandMapp showcase a diverse coffee shop culture, with South Africans planning visits to Woolworths Café (21%), Starbucks (18%), Seattle Coffee (17%), and Vida e Caffé (14%).
While the top shops have remained stable, Starbucks has notably surged in popularity, reflecting changing tastes influenced by both quality and price.
"Coffee is a global commodity, with over 10 million tonnes produced annually and an astonishing 2.25 billion cups consumed every day," Fulton states.
However, with inflation altering consumption patterns in South Africa, we are beginning to witness a shift towards affordability, sparking a compelling narrative in this nation’s coffee culture.
As South Africans navigate the turbulent terrain of rising coffee prices, their relationship with this cherished beverage continues to evolve, reminding us that even in the face of adversity, the love for coffee—whether instant, ground, or artisanal—remains a powerful force in daily life.
BUSINESS REPORT