When Kieran Spiteri, the co-owner of Collingwood\u2019s Terror Twilight cafe, talks about coffee, he uses words like variety, uniqueness, even authenticity.<\/p>\n
In his cafe in the heart of Melbourne\u2019s wide and well-caffeinated hipster belt, Spiteri says people will wait in line for 10 minutes, or travel across suburbs, if it means they get their hands on a consistently quality cuppa \u2013 bonus points if it\u2019s a one-of-a-kind, locally sourced blend.<\/p>\n
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Kieran Spiteri, owner of Terror Twilight cafe in Collingwood.<\/span>Credit:<\/span>Scott McNaughton<\/cite><\/p>\n \u201cPeople know value and they want something different,\u201d he says.<\/p>\n Australia\u2019s coffee scene is changing. Customers at cafes like Spiteri\u2019s and the eight outlets run by Melbourne roaster Market Lane are looking for a more bespoke experience. According to Market Lane co-owner Fleur Studd, micro coffee roasters, like micro breweries, are catering to drinkers who are more discerning, more willing to experiment, and more ethics-focused.<\/p>\n \u201cI think what\u2019s changed in the last decade or so has been the provenance of the coffee and where the coffee is sourced, where it comes from,\u201d said Studd, who is also the founder of specialty coffee-importing business Melbourne Coffee Merchants.<\/p>\n Market Lane has developed long-term relationships with coffee producers from Ethiopia, Kenya, Rwanda, Guatemala, Columbia, Bolivia and Brazil; its customers want coffee beans sourced ethically and transparently.<\/p>\n Market Lane, Collins Street, Melbourne.<\/span><\/p>\n \u201cWe\u2019re really trying to build up individual farms and individual producers, in the same way that you go to your favourite wine shop \u2013 there\u2019ll be things you might know about a particular variety or region of wine,\u201d Studd says.<\/p>\n Her customers are even \u201cembracing full-cream milk that\u2019s got great traceability\u201d.<\/p>\n And they are prepared to pay: milk coffee at Market Lane is sold at $6 a cup, irrespective of extra coffee shots or alternative milks. Studd says the premium comes from paying growers a rate \u201cway above\u201d fair trade and commodity market prices, as well as from inflation on fertiliser costs that have risen by 300 per cent.<\/p>\n But Les Schirato, the founder of Vittoria Coffee and one of the forefathers of espresso-based coffee in Australia who started in the 1960s, has a warning for coffee drinkers seeking out smaller brands.<\/p>\n \u201cWhere I always have a bit of a chuckle is all the hipsters and the trendies who think they know so much \u2013 they don\u2019t even know who\u2019s behind the coffee brands,\u201d he says. <\/p>\n Vittoria coffee founder Les Schirato sees himself as one of the \u2018last men standing\u2019 when it comes to Australian-owned coffee.<\/span>Credit:<\/span>Rhett Wyman<\/cite><\/p>\n Some brands such as Allpress, Toby\u2019s and Campos have been bought out by multinational giants: Toby\u2019s Estate, established in 1998 in Sydney\u2019s Chippendale, hasn\u2019t been independent since 2010, and is now owned by Japanese coffee giant UCC Holdings. Beverages behemoth Asahi acquired Melbourne coffee company Allpress in April 2021. Two months later, iconic Sydney roaster Campos was scooped up by Dutch giant JDE Peet\u2019s.<\/p>\n Schirato, a former long-time president of the Australian Coffee Traders Association, doesn\u2019t begrudge competition, but says it\u2019s a misapprehension to think his company is \u201cbig\u201d. It\u2019s not when compared to the multinationals.<\/p>\n \u201cI\u2019d like [people] to support the local cafes that support local brands [like Vittoria],\u201d he says.<\/strong><\/p>\n While COVID-19 brought swaths of the hospitality sector to its knees, particularly in business districts, Australians\u2019 unwavering love of a cup of joe has arguably made the coffee sector one of Australia\u2019s most resilient industries.<\/p>\n Generating more than $8 billion in revenue a year, about nine in 10 Australians (88 per cent) like coffee in some form, according to figures from social researcher McCrindle. Per person, we\u2019re consuming 1.9 kilograms of it per year.<\/strong><\/p>\n According to IBISWorld estimations, revenue is forecast to grow at an average of 2.1 per cent a year to $11.9 billion by 2026.<\/p>\n \u201cAlthough spending on cafes and coffee shops is discretionary, many consumers consider coffee an affordable luxury,\u201d IBISWorld senior industry analyst Suzy Oo says in an April 2022 report. \u201cConsumers are often unwilling to forgo their daily coffee.\u201d<\/p>\n Australians\u2019 relatively steady consumption, even through lockdown, was precisely what made coffee businesses like Allpress so attractive to Asahi.<\/p>\n \u201cIt\u2019s an opportunity for these big companies to [have] a presence in Australia. It\u2019s also a huge opportunity for the small coffee businesses, which were local, to expand on a mammoth level … their operating efficiencies increase, their reach increases, and purchase costs would decrease,\u201d says IBISWorld industry analyst Disha Jeswanth who expects there to be further consolidation in the future.<\/p>\n Lockdowns weren\u2019t just a boon for suburban cafes that benefited from people working from home, retail sales of beans also jumped, as did sales of coffee machines and pods. Even Schirato, who swore his company would never make instant coffee, was forced to do so by the pandemic.<\/p>\n \u201cIt was the supermarkets that saved us,\u201d he says. \u201cIf I didn\u2019t have supermarkets, we probably would not have made it through COVID.\u201d<\/p>\n But much as we love coffee, there are few home-grown options: 99 per cent of the beans we consume are imported. What is grown in Australia comes from just 50 commercial growers, who produce 600 tonnes of coffee beans a year.<\/em><\/strong><\/p>\n But there are research efforts under way to ramp up these figures. AgriFutures, a government-funded research organisation aimed at strengthening rural industries, is conducting a five-year project on developing Australia\u2019s local coffee-bean industry.<\/p>\n The biggest barrier so far, according to AgriFutures emerging industries senior manager Dr Olivia Reynolds, has been a factor no one can control: the weather.<\/p>\n Brazil is a popular region for growing coffee. 99 per cent of coffee consumed by Australians is imported.<\/span>Credit:<\/span>Bloomberg<\/cite><\/p>\n \u201cWhat\u2019s really limited the coffee industry is a lack of suitable varieties for our growing conditions,\u201d she says. \u201cSo what we need to do is identify cultivars that grow really well and are adapted to Australian growing conditions, hence our investment in the variety trials.\u201d <\/em><\/p>\n The regions best-suited to growing the plant that produces coffee seeds are far northern NSW to tropical Queensland. Reynolds believes that these regions, particularly far north Queensland, have perhaps historically focused too heavily on tourism \u2013 but the pandemic\u2019s closed borders have been something of a wake-up call to not rely too heavily on any one sector.<\/em><\/p>\n Market Lane coffee bags<\/span><\/p>\n Reynolds has just wrapped up the first year of the five-year project, which has yielded some early indications of about four varieties that perform well in the northern NSW region, though this will have to remain confidential.<\/p>\n It\u2019s not that demand for Australian-grown coffee isn\u2019t there \u2013 in fact, quite the opposite. \u201cThere\u2019s a huge enthusiasm for Australian-grown coffee, but there\u2019s just simply not the supply available at the moment for it to be expansive,\u201d she says.<\/p>\n To encourage growth of the local industry, Reynolds\u2019 team is also using artificial intelligence to develop a coffee \u201cflavour wheel\u201d to better articulate the particular flavour profile and mouth-feel of Australian-grown beans.<\/p>\n \u201cCoffee taste can be affected by plant variety by climates, soils, crop management, all these variables, and they can really impact the flavour, the acidity and also the mouthfeel of coffee; this is what\u2019s known as our terroir. And that\u2019s where we\u2019re using machine learning, artificial intelligence, to quantify the distinctive characteristics of each of those coffee descriptors. <\/p>\n \u201cWe\u2019ve got such potential because we\u2019re a coffee-obsessed culture, with one of the highest per capita coffee consumption rates in the world … [it\u2019s] extraordinary.\u201d<\/p>\n Australian beans or not, according to Spiteri, nobody in Collingwood, whether they are \u201ccoffee snobs\u201d or \u201carbiters of java\u201d, is a fan of \u201cany sort of chain\u201d. Terror Twilight, which opened about six years ago, imports beans from overseas and then contracts local roasters.<\/p>\n Beyond the classic latte, Spiteri says the most popular order is a magic \u2013 a double ristretto with milk that has its origins in Melbourne.<\/p>\n \u201cPeople are definitely more adventurous with their coffees,\u201d he says. \u201cPeople are really open to trying something different if you have a special on or a different blend \u2026<\/p>\n \u201cWe\u2019re just so passionate about it.\u201d<\/p>\n The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. <\/i><\/b>Sign up to get it every weekday morning<\/i><\/b>.<\/i><\/b><\/p>\n<\/p>\n
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