- As global coffee prices soar, 70% of coffee drinkers now brew at home
- With OOH consumption slipping, brands like Nestlé are cashing in on the at-home growth
- The rise of home brewing is also fuelled by Gen Z’s TikTok trends, social media influencers, and new gadgets
“STOP buying lattes – instead invest that money and become rich.” The simplistic advice, a millennial stereotype despite plenty of backlash, is finally taking hold – not to get rich, just to survive inflation. Now, many are trading in their daily café latte for a home brew.
While “latte shaming” (it even has a name) received considerable indignation and pushback until now, it seems that the tables are turning as inflation gets people to tighten their belts.
In Australia, the cost-of-living crisis has significantly boosted the popularity of instant coffee, as consumers, particularly younger ones, seek more affordable and convenient alternatives to cafe visits.
Martin Brown, who heads Nestlé’s coffee division, says that Nescafé Gold is now the fastest-growing coffee brand in the market, achieving growth of more than 10%. This shift is driven by soaring coffee bean prices, which have seen dramatic price increases due to poor weather and supply chain disruptions.
Despite rising costs, Australians continue to demand quality, resulting in higher consumption of premium instant coffee options and pre-mixed cappuccino sachets. Nestlé’s Nescafé Gold, now the fastest-growing coffee brand, and innovations like coffee concentrates for homemade iced coffees, are meeting this demand. These concentrates, offering customisation at around 90 cents per drink versus the $7–$8 for cafe versions, are particularly popular among younger consumers.
“A lot of the bigger specialty roasters have been able to adapt to this and make products that are convenient, and, to be honest, pretty good quality,” says Kirk Pearson, Founder of Project Zero Coffee.
“I’ve noticed that many roasters have expanded into new markets by going direct-to-consumer rather than relying on wholesale partners – whose volumes have been declining. Interestingly, recent years have seen many roasters acquired by larger investment firms, and those with significant capital have been able to invest in super convenient products that Australian coffee drinkers have embraced.
I think the biggest driver of home coffee making here in Australia has actually been the huge work-from-home culture. With Australia’s service-based economy, over a third of workers now regularly work from home. That’s why home brewing has exploded – making coffee at home has become hugely popular.”
This trend is not confined to Australia. Globally, at-home coffee consumption is on the rise.
Deloitte’s first ever global coffee study for 2024, which surveyed 7,000 consumers across 13 countries, reveals that convenience and rising coffee prices are driving a preference towards instant coffee made at home.
The study shows that more than half of respondents (55%) say price hikes have pushed them away from out-of-home coffee. Making coffee at home remains the top choice for many consumers, with 70% reporting that they brew coffee daily at home.
Between 2021 and 2023, inflation led to a significant decline in purchasing power for many, affecting their spending choices.
Brands are taking note – capitalising on the growing shift toward home coffee consumption. One LinkedIn ad even reads: “Did you know the price of coffee has gone up this year? With an average of over $3.08 per cup, you could spend at least $1,100.00 a year on coffee. However, if you drink [brand’s] coffee at home, it could cost as little as $.84 per cup, which is a savings of over $800.00 a year” – straight to the point.
According to the Fall 2024 National Coffee Data Trends (NCDT) analysis by Dig Insights for the National Coffee Association (NCA), home remains the preferred setting for coffee drinkers: 81% of those surveyed said they drank coffee at home the previous day, while just 36% reported having it out-of-home.
Brands are responding with a surge of new products tailored for home use. Nestlé, for instance, has introduced coffee concentrates and premium instant options to cater to this growing demand.
A year of economic turbulence
A year ago, the shift towards home brewing was influenced by rising inflation and the lingering effects of COVID-19. Now, the situation has intensified.
Coffee prices have skyrocketed, reaching unprecedented highs. The global economy faces a recession, and tariffs have disrupted supply chains, making the world feel less secure.
In this climate, consumers are not only unable to afford cafe visits but are also less inclined to go out. In Australia, more than half of consumers are cutting back on cafe visits due to cost-of-living pressures. This sentiment is echoed globally, with many opting for the comfort and affordability of home-brewed coffee.
“Australia is enduring a severe cost of living crisis that is heavily impacting consumers’ disposable income and discretionary spending,” says Kirk. “Australians don’t want to do without coffee, so they do it cheaper at home.”
“Interestingly, I’ve noticed there are different tiers of at-home coffee brewers. Of course, there are those who just need a coffee and don’t fuss about making it perfectly, usually buying cheaper, lower-quality coffee. But there’s also a huge wave of new enthusiasts who now brew at home and seek out good quality coffee wherever they can find it.
Some cafes have adapted to this shift, especially since they’re making less coffee than they did before the pandemic. For example, at Project Zero Coffee, sales of coffee beans account for 20% of our business – which is pretty good. Even with high coffee prices globally, Australians still love buying great quality coffee. Despite the cost-of-living challenges and record-high coffee prices, roasted bean sales remain strong, serving a growing home-brewing market.”
In the U.S., while out-of-home coffee consumption has returned to pre-pandemic levels, the majority of Americans still prepare their coffee at home, indicating a lasting shift in consumer behaviour.
Starbucks sales were down 2% in the U.S. according to its latest earnings report, with fewer visits driving the decline; even though individual orders were slightly more expensive. This doesn’t necessarily mean that people are drinking coffee at home instead, but it does show that they’re paying more attention to how much they spend. This is happening in China too, where more people came through Starbucks’ doors, but spent less, leaving overall sales flat.
The future of coffee consumption
Looking ahead, the trend towards home brewing is expected to continue, particularly among Gen Z consumers.
This generation values customisation and convenience, making home brewing an attractive option. Social media platforms like TikTok have popularised the “home café” trend to combat rising prices, where users create personalised coffee experiences at home. This movement emphasises aesthetics, hosting, and self-expression, aligning with Gen Z’s preferences.
Many coffee drinkers today, especially among Gen Z, prefer staying home, where home coffee products cater to their love for endless customisation – DIY coffee, just the way they want it.
Influencers like Emma Chamberlain exemplify this trend, whipping up creative recipes at home and pouring them into mason jars. Now, the trend has expanded to experimenting with everything from matcha to spirulina to collagen. The options are endless. So, is the cafe dead?
“A lot of the cafes in Melbourne that are thriving right now are the ones making these cocktail-like beverages that appeal to Gen Z and TikTokers,” says Kirk. “Some cafes get short bursts of success with a viral drink, but others have become powerhouses because of it.”
“The best example is a cafe called Good Measure, which serves a drink called a ‘Mont Blanc’ – iced filter coffee with lightly whipped cream, garnished with nutmeg and orange peel. They’ve practically become a tourist attraction – it’s unbelievable how much social media and this younger generation have transformed cafe culture so quickly.
If you’re opening a new cafe and want to succeed, I don’t see how you can avoid planning an offering that appeals to this younger crowd. Even at my cafe, we’ve made drinks that cater to the younger, TikTok audience. I even walked past a place with a 200m line because they went viral for serving a hot chocolate in a croissant that you drink from – people went absolutely bananas for it!”
Meanwhile, brands are now exploring the demand for home consumption products, introducing lines that cater to these preferences. Nestlé’s coffee concentrates and flavoured instant options are examples of innovations aimed at the home brewing market.
The rise of smart coffee machines, offering features like remote control and personalised brewing settings, also caters to this demographic.
While cafes are unlikely to disappear entirely, their role may evolve. They may become venues for social gatherings or specialty experiences rather than daily rituals.
Coffee Intelligence
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