Running a café in 2025 is no small feat. With green coffee prices at record highs and operating costs on the rise, many café owners are asking the same question: How much can we really charge for a cup of coffee?

Coffee isn’t optional…it’s ritual

Let’s start with the best news: 84% of Australians say they’ll spend the same or more on coffee this year. In other words, most people see their daily brew as non-negotiable. Even with cost-of-living pressures, out-of-home coffee remains a key part of the routine for nearly 80% of Australians aged 18 and over. It’s not just about caffeine, it’s about connection, comfort, and quality.

Taste still rules

Price is a hot topic, but when it comes to choosing where to get their coffee, taste wins every time. In fact, 73% of people rank taste as their #1 decision-making factor, well ahead of price at 65% and location with 54%, across all age groups.

For younger customers aged between 18 and 34 years, values like sustainability and dietary preferences matter more. Older customers, aged 55+ are more likely to choose based on convenience. But when it comes to loyalty? Taste is king.

So, what should you be charging?

Here’s where it gets interesting. Most Australians expect to pay up to $5.50 for a small flat white. But there’s a clear tipping point:
Prices above $5.50? Still acceptable for many.
Prices at $6.65 or higher? That’s where more than half say they’re out.

Younger customers are a bit more flexible. Those aged between 18 and 35 years are comfortable paying up to $5.85, while the 55+ crowd expects to pay closer to $5.00.

What this means for cafés: If your regulars skew younger, you may have more room to adjust pricing. For an older customer base, price increases need to be more strategic and slower. Across the board, small and steady beats sharp and sudden.

Most customers aren’t cutting back

Only 16% of coffee drinkers plan to reduce their café coffee spending this year. The vast majority are either staying steady or spending more. Why are some people spending more? Well, 42% say it’s because prices have increased at their usual café. Others are simply drinking more coffee overall. Even among those planning to cut back, almost no one said they’d switch to a cheaper café. Instead, they’ll brew more at home. That means your competition isn’t the café down the street, it’s the home espresso machine!

Milk alternatives are stirring debate

Almost 3 in 10 coffee drinkers now regularly choose milk alternatives. Among younger Australians, it’s nearly 40%. But here’s where things get tricky: 86% say a surcharge of 50c or less is fair. While 31% say there shouldn’t be a surcharge at all.

Some cafés are ditching surcharges altogether and raising the base price of all coffees by about 15c. This approach can be a win-win, especially if your crowd is younger and values inclusivity.

Café or convenience store? The line is blurring

It’s not always one or the other. While convenience store coffee is on the rise, 96% of regular servo coffee drinkers still buy from cafés too. That tells us one thing: people will buy coffee wherever they are, but when they want quality they come to you!

The bottom line…

Coffee drinkers are savvy, loyal, and surprisingly price-tolerant as long as the quality matches the cost. So, what should your café focus on in 2025?
– Keep taste front and centre.
– Don’t cut corners on beans, training, or equipment.
– Adjust prices gradually, customers will follow if the coffee’s worth it.
– Know your audience. Younger crowns are more flexible and values-driven. While Older people are more budget-conscious, but loyal.
– Consider your milk game, removing surcharges might just give you a competitive edge.
– Focus on loyalty, customers aren’t actively shopping around for cheaper options, they’re sticking with what they know and love.

(Information within this blog is based on research put together from our friends at Seven Miles and Lightspeed Research)