SOUTH Africans have come a long way since the days when they’d order a cappuccino in a restaurant and expect coffee with a splash of cream dunked on top. Now, you have to navigate between lattes (single shots or double), Americanos, flat whites, zebra mochas, frappés, macchiatos, skinny or full-fat, to stay or with wings. And that’s just at your local garage shop.
Step into a dedicated coffee shop, like a Seattle Coffee Co and Vida e Caffè, or the many others which take pride in how they serve as community hubs, and it is even more mind-boggling. Even mass-market burger flippers like Wimpy, Spur or McDonald’s now serve speciality coffees.
Last month, Starbucks opened its doors in Rosebank, Johannesburg, followed by a second in Mall of Africa out at Midrand. Days later, the queues are still out the door for those seeking to dip into the wares of the largest speciality roaster in the world (it operates in 71 countries). (See Shop Talk April 28-May 4.)
Not all your rands will be flying to company headquarters in Seattle. Starbucks has opened in SA thanks to the JSE-listed Taste Holdings, which brought in the brand through a 25-year licence agreement (including renewals) It had planned to open 12-15 stores in the next two years, at a total cost of R130m. This has now been revised to a longer-term goal of about 150 outlets.
And the price per cup? A grande Americano at Starbucks will cost R24 and a grande cappuccino R30. It may sound like a lot, but you’re getting a good deal. In the US, an Americano at Starbucks will set you back $2.95, about R42 at the current exchange rate. A cappuccino in the US costs $3.95 (about R56).
The local Starbucks prices aren’t too out of whack with those in other shops.
Woolworths, for example, charges the same for an Americano. At Seattle, an Americano will cost R18 and a cappuccino R21. At Vida e Caffé, you will pay R17 for a single Americano, and at Mugg & Bean (the home of the super-sized muffin), you’ll have to fork over R19.90 for a cappuccino.
Of course, you can head to a swish hotel if you’re really keen to feel as if you are paying in foreign currency — try the Hyatt (R35 for an Americano or R40 for a cappuccino).
So why are people spending more money on coffee? Especially since times are supposed to be so tough.
Clearly, there’s big money to be made. According to Euromonitor, local SA coffee sales were R2.5bn in 2014. That is expected to grow to R2.9bn this year. By 2019, coffee sales are estimated to be R3.5bn — a 40% jump in five years. Last year, coffee shops contributed 2.8 percentage points of the growth in takeaway and fast food, according to Statistics SA.
One answer is the “lipstick effect” — the theory that in a financial squeeze, people “trade down” to less costly luxury goods. So instead of buying a new handbag, people will treat themselves to a coffee instead.
Wayne Burrows of Urban Grind Roasters in Parkhurst has been in the industry for 14 years. Where coffee used to be all about big cups of overheated dark roasted coffee, where you needed a deluge of milk and sugar just to sip it, things have changed.
“Over the past 10-15 years we’ve had access to direct trade with farmers,” says Burrows. “We’re now able to bring in and roast better coffees, to give the customer a better speciality coffee. Customers are travelling to better coffee markets. They’re able to experience better coffee and the knock-on effect of that is when they come back to SA they want a better coffee.”
Burrows believes South Africans are still getting coffee far too cheaply. “Cup on cup we’re still undervaluing our coffee about 60% a cup,” he says.
Burrows says there’s no reason why it should be so much cheaper in SA. After all, the green bean raw coffee that a roaster is selling in Hong Kong is exactly the same green bean you buy in SA.
“My costs here are exactly the same as his costs there, so why are we paying 60% less for our coffee per cup?”Partly, this is because the local market has a history of expecting to pay low prices for coffee. Now that quality is more sought after, prices are inching up. “Our market is historically a country that survives on franchises — not a country that survives on individuals.
“We’re not trendsetters, we’re followers,” he says.
As South Africans learn about coffee — something which will be given a boost by Starbucks’ arrival — tastes will change. If Burrows had his way, cups would be smaller and there’d be less milk and more of a focus on tasting the product.
And perhaps coffee will become a more frequent treat.
Sebastian Schneider, one of the founders of niche outlet Motherland, said that when his first shop opened in Rosebank six years ago, artisan coffee was an occasional thing, rather than an obligatory don’t-start-your-day-without-it drink.
“Coffee has grown exponentially in the past two to three years,” he says. “It’s more than just a physical need; it gives you a stimulating injection in the form of a caffeine kick, but it’s more about that two minutes with that barista, or the conversation you have with a friend in the line.”
Today, regulars come in three or four times a day. “You see the same faces and people regularly, and we’ve grown a community around our shops,” he says.
Motherland has two locations in Johannesburg and one in Cape Town.
Is there space for Starbucks?
“In terms of the brand’s salience, it can’t be matched. They don’t even need to market themselves much, and people know they’re arriving. In SA’s growing coffee market, I’d like to think there’s room for everyone, including Starbucks.”
While Schneider expects the queues outside Starbucks to continue for a few weeks, “I think pricing could have a role to play when it comes to how long the queue lasts.”
So what should a cup of coffee cost? “It’s what the ritual is worth to you. We want guys to focus on and know about the quality of the bean and Africa’s coffee heritage,” says Schneider.
But he says it’s more than just about what’s in the cup.
“I’d like to think the experience that good coffee houses offer is worth more than your average R25.”
At Motherland, a Coffee Americano will cost R19 and a cappuccino R21.