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Techly explains: Why is instant coffee so expensive?

There are two kinds of people in this world: those who curse themselves when they run out of their brand of instant coffee and have to fork out a fortune to ensure the next day isn’t a total write-off due to drinking the cheap stuff, and people who buy up big when the good stuff is on sale.

When not on sale, a 200-gram jar of Moccona or Nescafe Gold can go for more than $20 at major supermarkets, which puts to shame that old saying ‘the best things in life are free’.

Sure, you can get a 500-gram tin of International Roast for $11, but you also can get a four-litre goon bag for next to nothing as well – you ain’t gunna enjoy drinking either.

So why is decent instant so expensive?

The first thing to take into account is how many cups you’re going to get out of a single jar. Since single-serve sachets come in two-gram packs, a 200-gram jar should get you 100 cups of coffee – call it 50 cups if you like your coffee with a bit of bite.

That’s less than 50 cents per strong cup on pure coffee costs. Nespresso’s cheapest pods sell at 68 cents apiece, and while a bag of beans might end up cheaper per cup, when you factor in the time spent milling the beans and then waiting for your coffee to brew or percolate, it’s not really the cup of choice for someone who needs to get up and go in the morning.

But still, mixing freeze-dried coffee in a cup with boiling water and some milk is hardly an art, so you shouldn’t expect to pay cafe prices. So what’s with the pricetag?

Instant coffee takes time, and money

Well, there’s significantly more work involved in making the coffee ‘instant’ than simply picking and roasting beans, and then drying them out overnight.

For starters, coffee beans aren’t the easiest thing to grow, only being found in a spread of regions sometimes referred to as the equatorial belt, which – as the name suggests – are areas of the globe either directly north or south of the equator.

So in countries that aren’t lucky enough to have access to their own delicious coffee beans, Australia included, there is an instant premium incurred because of the cost of getting the good stuff there in the first place. That goes for all kinds of coffee, not just instant (more on that next).

Another huge factor in the cost of processed instant coffee is the process itself. You can find a much more detailed explanation of the drying process on Made How, but the short version is as follows:

  • The coffee flavour from roasted beans is extracted via an industrial scale French press.
  • The brewed coffee is concentrated, filtered, rapidly frozen and then broken into pieces.
  • The concentrated coffee is dehydrated under low pressure to remove all water.
  • The dehydrated coffee is then packaged and shipped.

It’s a complicated process that takes significant amounts of time to make happen, with vast sums of money involved at every stage.

According to most recent available figures published on The Coffee Guide, in 2009 Australia imported 129,000 bags of roasted coffee beans and 425,000 bags of soluble coffee (a bag is a unit of measurement between 60 and 70 kilograms).

While the witch’s brew of complications that make up international trade and import stats make it more difficult to nail down individual prices, if it costs as little as $AU10 to import a bag of processed coffee, then that comes out at a cool $AU5.5 million a year. That’s just the cost to get a bag into the country.

The Australian Coffee Traders have figures that state that the instant coffee market is worth $AU42.5 million and that 70 per cent of that is hoovered up by the guys at Nescafe.

Suffice to say, then, that we are dealing with significant cashflows.

If one cause of that is simply the costs involved in import, and the fact that the majority of the market is cornered by one company, who can therefore have a huge influence on the price, then that tells some of the story.

From the coffee farmer, through the industrial scale drying process, through the export/import trade, to the wages of the shelf stackers and till operators that help it to your home to make that first couple of hours of your day a little easier, it quickly adds up.

So there we have it, instant coffee; an astonishing worldwide trek that finishes in your mug every morning.

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Comments (1)

    Simon

    Friday 5 February 2016

    The price of coffee beans is determined by the coffee exchange and not by the cost of growing! A farmer can easily find he has to sell his crop for less than it cost to produce!! The price of the world’s coffee beans is fixed by people who wouldn’t recognise a raw coffee bean if it was on their nose!

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