The Cappuccino Price Index – A Year in Review 2011

Cappuccino Price Index

For the uninitiated, the Cappuccino Price Index (CPI) monitors the price of espresso coffee in Australia. In their own words “Cutting through the noise of oil prices, inflationary trends, exchange rates, and The All Ords we talk about what really matters – the price of the cup of coffee.”

It’s an interesting niche way to look at inflation in Australia, and is followed by many high-profile economists such as Craig James. It’s also an interesting look at prices throughout the state capitals.

Their year in review release showed an average price increase of 15 cents per cup of coffee and 17 cents per cup for dine-in coffee during the past 12 months across Australia.

The table below shows takeaway and Dine-in prices in most state capitals.

Coffee prices

The managing director of Gilkatho (publisher of the index) reported that 63.1% of coffee shops surveyed in 2010-2011 had increased their prices in the last year, but increases fell below market predictions.

Coffee futures rose 77% in 2010 however most cafe operators absorbed the increase in costs, choosing instead to increase prices of non-core items such as espresso shots and cups of tea in order to cover the increased coffee bean prices.

It’s interesting to note the factors that contribute to the fluctuation in the cost of coffee beans, such as heavy rains in South America last year dropping production levels. However, Gilkatho reports that increasing business costs and Australian commercial business conditions are the most important factors in determining the price of a cup of coffee.

For more information, and the complete 2011 year in review press release, visit