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Coffee The Australian Way, Tea and Coffee Asia, fourth quarter 2005

Appearing in Tea & Coffee Asia

4th quarter, 2005


                    Coffee The Australian Way

It may be a long way from anywhere but Australia boasts one of the world’s most vibrant coffee cultures. The specialty coffee industry has grown not from coffee chains but through top quality independent cafés born out of the early Greek and Italian immigrants, write Matthew Gee and David Gee. Current drinking trends are also analysed to give a snapshot of coffee in Australia today.

The Greek and Italian Influence

From the 1930’s to 1960’s Greek cafés dominated the Sydney and Melbourne street landscape. They became a focal point for eating, drinking and perhaps more importantly – socialising. Freshly roasted coffee was probably introduced into Australia by three Andronicus brothers who had packed up and left their home in Greece in the late 1800s to build a new life in Australia. Drawing on their wealth of European coffee-making experience the trio established one of Australia's first coffee roasting businesses in 1910, roasting 90kg of coffee every day from a store in George St, Sydney. In 1952 the family imported into the country Australia’s first espresso machine and suddenly Australians started enjoying espresso in the true European tradition. Hundreds of people would stream into their café at lunchtime and drink espressos. Cappuccinos were rare. Caffe lattes and flat whites were non existent. Now three generations on, Grant Andronicus is still heavily involved in the coffee scene in Australia, owning several espresso bars in Sydney.

At this time, a plethora of fine Italian coffee houses was emerging in Melbourne. Pelligrini’s Espresso Bar and Legend Café often lay claim to being Melbourne’s first ‘real’ espresso bars opening their doors in 1954 and 1956 respectively. The first espresso machine in Melbourne dates back to 1954 to Don Camillo Restaurant. It was this year also that three young Italian immigrants by the names of Monaci, Coperchini and Panettieri formed the company Mocopan to deal in smallgoods, spices and coffee. A few years later their company was transformed by the Dimattina family. They began to roast imported beans locally – thus carving out a huge competitive advantage over companies that imported roasted beans. The Dimattina family continue to be a huge name in coffee in Melbourne and beyond.

And so espresso was born in these traditional mosaic-exteriored cafes with stone floors and marble bars. Today there are over 16,000 restaurants and cafés employing over 190,000 people operating throughout Australia. It’s true to say that most are no longer designed in that European stand-up bar configuration but with comfortable yet functional seating and alfresco seating wherever possible.

These days they are owned and operated by Australians from a wide range of ethnic backgrounds. Chinese Australians make up a large proportion of new café owners in Australia.

Coffee Chains in Australia

The three largest coffee chains in Australia are Gloria Jeans Coffees, Starbucks Coffee and Hudson’s Coffee.

Starbucks Coffee began in Australia in 2000 but because all stores are company-owned, growth has been slow compared to Gloria Jeans Coffees which is franchised. Gloria Jeans now has over 300 stores and have representation in every state and territory in Australia compared to Starbucks’ 50 stores.

Gloria Jeans has become so successful in Australia that the Australian operation has recently purchased its US parent.

Hudsons Coffee is a 100% Australian owned and operated company. The first Hudsons Coffee opened in Melbourne in 1998. It now has over 30 stores in Australia and has begun to franchise its operation to achieve more rapid growth.

Other chains now selling espresso-based coffees include McDonalds, Donut King, Muffin Break, Jamaica Blue and Subway, with Burger King soon to follow suit.

The Coffee Chains’ Struggle for Market Share in Australia

To this day the coffee chains still have very little market share in Australia. One reason for this is that unlike in the United States and Asia, Australians already had decent espresso before the chains came in.

Whilst it is true to say that there have always been alternatives to chain coffee in Australia it has also been slow to take off for other reasons. Some people dislike the fact that certain chains insist upon serving all coffees in paper cups, whether the customer is drinking in the café or not. Before the chains came in, ceramic cups and glasses were always used for espresso-based coffees in Australia. It is no wonder then that some consumers are affronted when charged $3.50 for coffee served in paper cups. Others dislike the whole order-and-pay-at-the-counter-and-wait-for-your-coffee-before-you-sit-down model that a lot of these chains are based on.

In 2000, we purchased four cafés that were part of a small emerging Australian coffee chain that was established based on the American model of paper cups and no table service. For these reasons the cafés were given terrible reviews in newspapers and on the internet. Within months of taking them over it had become apparent that in order to flourish we had to introduce proper ceramic cups and glasses for customers who were drinking-in and deliver coffees to customers rather than make them wait near the espresso machine for their finished coffees.

The other major gripe that Australians have with chains is their increasing use of fully automatic and semi-automatic espresso machines rather than making espresso and steaming milk the traditional way using manual espresso machines. When chains train staff to use 1.5litre jugs and simply leave them under the steam wand as they go and do other things and come back when the froth has risen to the top of the jug customers start to notice. No longer is each and every coffee a labour of love.

Having said all of this, we are not chain bashers and we are not saying that all independent cafés are fantastic in Australia. Coffee chains have their place. Whilst living in Singapore for four years we devoted a fair bit of our spare time frequenting Starbucks which was popping up on every street corner where nothing existed before. Chains can educate people about coffee and introduce them to products like syrups and frappes - which end up helping everyone in the business.

Why Independent Espresso Bars Are So Good in Australia

The word ‘barista’ was unknown five years ago in Australia. Now it is part of the vernacular and some espresso bars pay well above the minimum wage for qualified baristas who make great coffee, make it consistently and make it quickly.

The closest thing to a qualification that exists in Australia is a standard that has been developed by the TAFE (polytechnic) system. Only the best barista schools in Australia have accreditation and people wanting to make coffee their profession usually make the effort to gain this accreditation. It ensures that they cover all aspects of coffee-making from the history of coffee, to how coffee is grown, harvested, roasted and blended to texturing milk, extracting espressos and learning the proper procedures for cleaning the espresso machine and coffee grinder.

Good coffee companies will top-up this third party training with their own in-house training to help their clients train new staff as they are hired.

In any major city in Australia it is not hard to find a café whose baristas will be proficient in getting a 30ml espresso extraction in 30 seconds, creating finely textured milk and presenting their coffees with flare.

Current Coffee Drinking Patterns of Australians

We recently conducted a survey involving a huge sample size of 300,000 cups of coffee consumed over a period of a year from four Australian espresso bars. The results were analysed with the assistance of software that worked in conjunction with the cash registers in each location.

The Decline of Tea

Australians may drink tea at home but they definitely don’t drink it when they go out. Of coffee and tea drinks taken together, tea accounted for only 2.5% of the total. This means that it would be fair to say that for every hundred people that come in to a typical Australian café, only about 2.5 order a cup of tea.

The Most Popular Coffees

Taking a look at the figures below it is obvious that whilst the Australian-invented flat white still ranks highly, no longer is it the most popular coffee.

As a percentage of coffees that were ordered:
29% were cappuccino
28% were flat white (cappuccino without most of the froth)
20% were caffe latte
7% were caffe mocha
5% were hot chocolate
4% were long black
1% were espresso/short black

These 7 drinks made up about 95% of all coffees ordered. That means that only 5% were made up of drinks such as short macchiato, long macchiato, doppio, white hot chocolate, chai latte, vienna, mocha vienna, steamer, white mocha vienna and ristretto.

The above statistics also tell us that almost 80% of coffees that are made in a typical Australian café consist of just three coffees: the cappuccino, the flat white and the caffe latte.

It is amazing to see just how different the coffee culture is in Australia (and New Zealand, for that matter) from Asia and the US. Probably more like the Italian coffee culture (but a far greater proportion of coffees sold being milk-based coffees), the industry boasts a huge number of independent cafés born from the Greek and Italian immigrants that loved and wanted to share espresso with the rest of the country. With the coffee boom in Australia still continuing we will be seeing more and more cafés and coffee chains setting up shop and for that matter, more coffee roasters as well. It’s full steam ahead for the coffee industry in the land down under.



Matthew Gee and David Gee currently run a wholesale coffee business in NSW and a barista training school called BARISTA BASICS Coffee Academy that operates in Melbourne, Brisbane, Sydney and Newcastle. They have also owned four cafes in Brisbane (still own one), have been partners in a specialty coffee roaster, have written Australia’s first textbook on coffee (bean there, drunk that...), produced several coffee training videos on commercial and domestic espresso machines and are currently producing a book focussing on domestic espresso machines.

Last year Matthew and David appeared on Bert Newton’s Good Morning Australia and Channel 9’s Fresh with Jeff Janstz. They have also worked as official espresso tasters for Choice Magazine’s 2004 and 2005 review of home espresso machines. They also periodically appear on Ella James’ Saturday night radio program on Sydney’s 2UE. In 2005 they appeared on Mornings with Kerrie-Anne Kennerley on Channel 9 and Today Extra with Nat Jeffrey on NBN3.

Ó & Ô 2005 David Gee and Matthew Gee

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