Australian Coffee Industry Outlook – Trends, Challenges, and Predictions

For years, we’ve shared candid insights into the Australian coffee industry—from the rise of micro‑roasters to the realities of café culture, certification programs, and marketing hype.

Here’s our take on what unfolded in 2019 and what continues to shape the future of coffee in Australia.

Brands and Leaders

• New coffee companies keep emerging, especially in regional areas.

• The market is over‑crowded and saturated, but self‑belief drives roasters forward.

• Micro‑roasters face tough conditions yet remain passionate and principled.

• Café growth has declined in 2019 for the first time since 1995.

• Wholesale competition is fierce, often achieved using “drive‑by” customer poaching.

• Differentiation is harder—quality expectations are high and tolerance for mistakes is zero.

• Australia lacks a clear market leader; scale and price dominate over quality.

Key players to watch:

• Retail Food Group (RFG) – facing serious challenges and in decline from financial struggles.

• Mocopan – built Australia’s largest roasting plant to supply McDonald’s, Coles and other large private label clients. Dominant player and super-efficient.

• Veneziano – balancing specialty craft with spectacular supermarket/private label growth via Aldi and their Black Bag Roasters offering. Recent investment in new plant delivering impressive cost and scale efficiencies.

• Liverpool Partners - Sydney-based Private Equity fund, acquired Seven Miles, then Padre plus a few smaller NSW regional brands. May find the margins tighter now that costs are rising fast and has so far failed to undertake rationalization of operations to cut costs.

Mergers and Acquisitions

• Australia lags behind the US and Europe in coffee M&A activity.

• Notable deal: Zanetti’s acquisition of The Bean Alliance in Melbourne and picking up the remains of Coffex's implosion.

• Global beverage giants (Coca‑Cola, Lion, Schweppes) are diversifying into coffee, tea, and kombucha.

• Distribution channels are tightening, with large beverage companies leveraging retail and wholesale networks.

Coffee Competitions – Participation Medals

• Competitions peaked in silliness during 2017–2018, handing out medals to nearly everyone.

• Issues include:

  • Cheque‑book coffees entered at hundreds of dollars per kilo.

  • Winners “out of stock” soon after events, yet still promoting medals.

  • Judges awarding medals to their own companies.

  • Large events like Golden Bean struggle with volume and palate fatigue.

• Regional competitions (Royal Agricultural Societies) offer more controlled evaluations.

• Prediction: fewer roasters will compete, as consumers value reliability and everyday quality over medals.

Café Culture Challenges

• Fit‑outs focus on Instagram appeal rather than quality or service.

• Many cafés close within 12 months once lease incentives end.

• Wage fraud scandals damage reputations and highlight systemic issues in hospitality.

• Menu aggregators (delivery apps) erode margins, taking up to 30% of order value.

• Supplier debt pressures continue, with cafés defaulting on payments and suppliers forced into risky credit arrangements.

Final Thoughts

The Australian coffee industry is vibrant but faces saturation, rising costs, and credibility challenges. From mega‑roasters to micro‑operators, success depends on transparency, consistency, and everyday value—not medals, gimmicks, or fake marketing.