By Richard Corney
Managing Director of Flight Coffee
Monday February 23, 2026
Over the last two years I have been vocal about a simple reality, rising coffee commodity prices and rising café operating costs will, and should, show up in the price of a cup of coffee.
Now we are seeing the coffee market soften. The Arabica C benchmark has dropped meaningfully from recent highs, most recently sitting around the mid 280s US cents per pound.
In my experience, consumers will take this as a signal that coffee should get cheaper, and by virtue, the price you pay for a cup of coffee should follow. This does not match how this industry actually works, nor why cafés are still under pressure, even if the market is easing.
Down does not mean normal.
Yes, the market has come off. But it is still historically high. And for roasters, the pain does not disappear the moment the market turns.
Coffee is bought forward. Most roasters the world over do not buy on a spot or ad hoc basis, we contract ahead, hold inventory via third party agents, and work through stock purchased at those contracted levels. This means margins remain compressed for many months after the coffee market moves. In practical terms, today’s lower headline price does not immediately change what is landing in our factory, and it certainly does not immediately change what cafés are paying.
The real issue is café economics, not just green coffee.
Even if green coffee halved tomorrow, cafés would still be wrestling with wages, rent, insurance, utilities, compliance, and the general cost of doing business.
From $3.50 to $7.00 the price of a flat white in my own cafes has increased by 100% over 20 years, representing a catch up move against a cost base that has risen faster again. By comparison, a Big Mac in New Zealand has risen from roughly $4.45 in 2006 to around $8.40 in 2025, about 89%.
Nationally, the picture is similar but less dramatic. Stats NZ data, as reported by RNZ, shows the weighted average takeaway coffee price has moved from $2.89 in June 2006 to $4.79 in June 2024.
More recent Stats NZ food price data places the average takeaway coffee at approximately $5.16 per cup.
That represents an increase of roughly 79% since 2006. Even since January 2020, when the average sat at $3.91, the movement has been steady rather than explosive.
Now compare that to the cost base behind the counter.
Over the same period, the minimum wage has risen from $10.25 per hour in 2006 to $23.95 per hour from 1 April 2026, an increase of about 134%. Meanwhile, the Living Wage for 2025 and 2026 sits at $28.95 per hour, the base rate we pay at The Hangar and Flight Coffee.
In other words, labour, the single largest cost input for most cafés, has risen materially faster than the average price of a cup of coffee. So too have other fixed costs such as rent and utilities. At The Hangar, our lease costs have more than doubled over the 13.5 years we have operated from the same site.
Back to the Big Mac: Large multinational operators manage that shift through global procurement scale, automation, brand power, and efficiency. Café operators do not have that leverage, nor do they operate with global purchasing power or institutional scale.
It may be an apples and oranges comparison, but many consumers do not differentiate between the two. A burger and a flat white sit in the same mental price bracket.
When you line up the numbers, the claim that coffee has become disproportionately expensive simply does not hold up. Café operators, especially in New Zealand, face the same wage, rent, insurance, and compliance pressures with far fewer buffers. Prices therefore have to reflect rising costs more directly in the cup to remain viable, yet often they still do not.
A neutral reference point for inflation across that time is the Reserve Bank of New Zealand inflation calculator. When you run café inputs through that lens, you quickly arrive at a confronting conclusion, a $5 coffee is not a neutral price point, it is a subsidised one.
Money is a proxy for value.
A flat white is not just beans and milk. It is the wages of skilled staff, training and retention, equipment and maintenance, rent and fit out amortisation, compliance, insurance and utilities, and the time and space to serve customers quickly and well.
When people say coffee is too expensive at $6 what they are actually saying is that coffee has been underpriced for so long that $6 feels expensive. Those feelings do not match economic reality.
The structural shift in hospitality.
Even if input costs ease, hospitality in New Zealand, particularly cafés, is going through structural change. Hospitality closures over the last 12 months have been widely reported and very real on the ground.
This is not about one commodity spike. It is about a prolonged period where pricing has lagged reality.
Free market capitalism means consumers ultimately determine what survives. If we anchor value to an artificially low cup price, the outcome is predictable, operators underinvest in people and maintenance, burnout increases, quality declines, and cafés close.
If you love your local café, the most practical support is not just loyalty, it is accepting that sustainable pricing is part of keeping good venues alive.
Yes, coffee markets fluctuate. But the broader economics of cafés have permanently shifted. Unless cup pricing reflects that, the industry will continue to contract, one closure at a time.
