Photo: joeycheung / Adobe Stock
Any seasoned traveller knows you can’t hit the road without your morning cup of coffee. After an early morning flight or red-eye bus trip, it’s often the only thing keeping us awake.
But coffee is no longer just a caffeinated drink. It has developed into a culture, a trade and an art form, backed by an international economy. It should therefore come as little surprise that it ranks third on the list of the world’s most popular beverages (after water and tea).
And while the popularity of coffee is fairly standard across the globe, prices can vary significantly between countries. One person’s $2 cup of joe is another’s $8 luxury.
As a backpacker on a budget, it’s important to know what you can expect to pay for your brew when you touch down in New Zealand. So where do Kiwis sit in the global hierarchy of coffee prices?
To find out, the folks at Finder created the 2019 Starbucks Index. This detailed list compares the differences in price for the same cup of coffee in 76 countries around the world.
Despite the general movement towards local barista coffee (at least in New Zealand anyway), Finder decided to use Starbucks because the coffee giant operates in all 76 of the countries featured on the list. This makes it a pretty accurate yardstick. The coffee in question is a 375ml tall latte.
The good news for New Zealand-bound travellers is that Kiwi coffee prices aren’t sitting at the top of the price list. But they aren’t quite at the bottom either.
New Zealand came in as the 32nd least expensive country to purchase a cup of coffee, with a tall latte costing $5.10[1].
For some travellers, this might seem slightly pricey. After all, it’s double the cost of the world’s cheapest coffee, found in Turkey. In Turkey, a tall latte will set you back just $2.77.
But it’s also a far cry from the world’s most expensive cup of coffee, found in Copenhagen, Denmark, where a tall latte costs a whopping $9.42. A tall latte in Australia, one of New Zealand’s closest neighbours, costs just $4.81 in comparison.
Coffeenomics: the latte line
To give more context to the coffee index prices, it’s important to break down the methodology in further detail.
The price of coffee is typically higher in wealthier countries and lower in poorer ones. This is due to a range of issues affecting the cost of goods and services. The cost of raw materials, labour and production costs, tariffs, taxes and retailer pricing strategies will all affect coffee prices in the country of operation.
When calculating the index, the GDP-per-capita value for each country was assessed alongside the coffee cost in US dollars. This was to see how far each country deviates from the average.
In Denmark, for example, a coffee costs US$6.05, whereas the expected coffee cost based on the country’s GDP of more than US$60,000 per capita is US$4.20. This means the coffee is 44% more expensive than it should be.
When applied to New Zealand, this index suggests a coffee is 14.5% cheaper than it should be based on GDP, and that the New Zealand dollar is 14.5% overvalued.
What does this mean for travellers visiting New Zealand?
This depends on how you like your coffee – and how often you drink it!
Budget travellers might be better off with instant coffee if they want to stick to a daily food allowance (although there’s nothing wrong with treating yourself here and there). But those with cash to spare might prefer to get their daily dose of caffeine from one of the many cafes scattered throughout New Zealand.
As with any trip overseas, make sure you take conversion rates into account when transferring your currency over. This is the best way to put local prices into perspective when budgeting.
[1] All currency in NZD
This article is provided by Bessie Hassan, a money expert at Finder.
