Is coffee a luxury? Jacobs Coffee explains the price increase

Coffee has become a daily routine for many adults, with some only being able to smile and ‘wake up’ after their first cup.

The coffee culture is even bigger in corporate, with some companies having an in-house coffee shop or including coffee beans in their monthly budget for employees.

However, given today’s cost of living, coffee is a luxury. A decent cup of coffee costs approximately R40, while a 200g bottle, on sale, can cost R149 and last a month.

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Can South Africans afford coffee?

It would be difficult for South Africans living within poverty lines to afford coffee, as one person only has R796 to survive a month, which is approximately R26 a day.  

Statistics South Africa announces the national poverty lines, which change annually due to changes in the cost of living.  

R796 is the amount of money a person will need to afford the minimum required daily energy intake. However, the food poverty line is commonly called the “extreme” poverty line.

The food poverty line excludes other necessities such as transport, rent, headache tablets, soap and toilet paper.

Two other poverty lines, which include essential non-food items, are also calculated. The lower-bound poverty line is R1 109 per person per month, with the upper-bound poverty line at R1 634.

Is coffee included in the food basket?

27 food items were selected as the basis for the food poverty line to meet a nutritional standard of 2 100 calories per person daily.

The food items do include coffee; however, the brand or type is not specified.

Items included are mealie meal, brown bread, rice, canned pilchards, cabbage, potatoes, tea, and brown sugar.

However, those differ from foods exempt from value-added tax (VAT) in SA. Foods exempt from VAT include brown bread, maize meal, samp, dried beans, lentils, pilchards, milk powder, rice, vegetables, and fruit.

Minister of Finance Enoch Godongwana is expected to announce the expansion of the food basket when he delivers the budget speech on 12 March.

ALSO READ: South Africans call for VAT to be scrapped for more food as prices soar

Why are coffee prices high?

Domaine Rautenbach, senior brand manager at Jacobs Coffee, told Bizcommunity that global supply chain disruptions, currency fluctuations, and rising production costs are key drivers of increasing coffee prices.

Climate change is the biggest contributor to the rise in coffee prices, as extreme weather severely impacts green bean prices, reducing supply and driving up costs.

She also explained that currency exchange rates are important in determining coffee prices, as coffee is traded internationally.

“When the local currency weakens against major trading currencies like the Euro, importing coffee becomes more expensive.

“Additionally, fluctuations in global supply and demand for imported coffee beans have significantly impacted coffee prices.”

ALSO READ: Cocoa prices go up the roof due to shortage fears across Africa

More people drink ground coffee and beans

A study by MAPS showed that the number of people who drink instant coffee decreased by 12%, but the number of those who drink ground coffee and beans has increased by 58% compared to 2023.

Eighty20 said instant coffee experienced the highest consumer price increase year-on-year of any food or beverage item in August 2024, at 22.3%, which is also higher than eggs.

“Nearly half of coffee drinkers prefer Ricoffy, a clear favourite in South Africa, enjoyed by more people than the next five leading Instant Coffee brands combined—Jacobs Kronung, Frisco, Nescafe, Koffehuis and Douwe Egberts,” said Andrew Fulton, Director at Eighty20.

Rising costs in SA

Rautenbach said rising coffee prices drive South African consumers to seek more affordable alternatives while maintaining their coffee rituals.

“Instant coffee is a popular choice because it is affordable and convenient, offering a budget-friendly solution for daily coffee drinkers.

“At the same time, consumers are increasingly turning to speciality coffees and instant cappuccinos, which provide high-quality speciality coffee at home without the premium price tag.

“Additionally, coffee capsules and coffee beans are gaining traction as a cost-effective way to enjoy barista-style coffee at home, striking a balance between affordability and quality.”

Cocoa Prices

According to Trading Economics, cocoa prices have been at record highs, driven by supply shortages and weather concerns. 

In February 2025, cocoa was trading at $8,329.66 per ton. In December 2024, cocoa prices rose 50% in one month, reaching an all-time high 

“Recent rains in the Ivory Coast and Ghana are expected to boost cocoa tree growth and enhance conditions for the upcoming April-to-September mid-crop.

“However, Ivory Coast’s agriculture minister stated that cocoa production for the 2024/25 season is likely to remain near last season’s disappointing levels due to ongoing adverse weather and crop conditions.

“Latest data showed Ivory Coast farmers have shipped 1.36 million metric tons of cocoa to ports so far this marketing year (October 1 to February 23), a 17% increase from last year, though the pace has slowed from the 35% rise seen in December.”

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