Since its inception in 2005, St. ALi has been a leader in relationships with farmers, in-house roasting & brewing. They’ve diversified their offering by manufacturing coffee capsules and cold brew cans and also collaborated with brands like Mercedes-Benz, Mr Black, Archie Rose and Coco Black – just to name a few.
We sit down with Lachlan Ward, Co-CEO of St. ALi, to discuss the rise of one of Australia’s most successful coffee brands, the future of the coffee industry in Australia and why the price of coffee is set to change.
Shifts in the market
Aussies love their coffee. Unsurprisingly the coffee market in Australia has boomed over the last decade, and the market, particularly in Melbourne, has become saturated.
St.ALi has been around for 16 years and has had to evolve and grow with the market to establish itself as a key player. Over the years, as the market has shifted, it’s transformed from a craft coffee brand into a more mainstream brand for everyone to enjoy.
“We’ve never strayed from our original ideals around the quality of our products, and that will never change no matter how big or small we get.”
Creative coffee
Lachlan also believes that St.ALi has remained true to its core values and has prioritised creativity to stay one step ahead.
“I think we’re probably one of the only coffee brands in the market that really values creativity as one of its core business values.”
“We’ve always seen ourselves as more of a creative agency that does coffee rather than a creative coffee brand. And I think that sort of shines through with how we represent ourselves, how we speak to the market, how our products look.”
Lachlan feels that St.ALi’s innate creativity also continues to give them the edge in such a competitive market.
“There’s heaps of good coffee in Melbourne and in Australia these days. But, I think [our creativity is] where we will remain focused and where we hope continues to give us an edge amongst a pretty crowded space.”
Price rises: a long time coming
“People are sensitive about the price of a cup of coffee more so than a head of lettuce or a banana or something like that.”
As a nation of coffee lovers, the price of a daily cup of joe sits close to our hearts. With price rises happening in all corners of our lives, this one hits close to home – but for cafes and coffee retailers, the recent price increases have been a long time coming.
“I think the coffee price did need to come up. I think, adjusted for inflation, it has been at historic lows the last few years, and it is an incredibly difficult time to be a coffee producer.”
“With climate change and constant pressures elsewhere, it’s not getting any easier for them. So I think the price rise had to come. I don’t see any sort of short-term relief on the buyer side anytime soon.”
Gaining confidence
Lachlan firmly believes that the price of coffee should be higher than it currently is, and that recent pressures in the market have give businesses more confidence to raise their prices.
“I think probably the biggest thing out of this period is seeing more operators being more confident to adjust their prices.”
“We’ve always been confident to lead on price, but I speak to so many of our customers who are reluctant to put the price of a cup of coffee up.”
However, in the last six to 12 months, cafes and coffee retailers across the country have now taken the leap and started to increase their prices to keep up with rising costs and inflation.
“[It’s great] seeing our friends and peers in the industry having more confidence to push prices up to where they should be.”
Coffee in the spotlight
We’re a nation of coffee lovers, and if there’s one thing guaranteed to get people talking, it’s coffee. Where’s the best place to get a coffee? Where should you avoid? Which city has the best coffee culture? The list goes on.
“Coffee is one of those really emotional products that people have real loyalty to.”
“If there’s a slow news week, there’s a story about the price of coffee or coffee’s good for you, coffee’s bad for you. It’s very topical.”
As a result, selling such a popular product comes with its pressures. And, in recent years, Lanchaln believes that many coffee shops have been hesitant to raise their prices for fear of losing customers in a saturated market.
“Melbourne, in particular, is a super-saturated market. You know, there’s great coffee and great cafes almost on every street, right? So inevitably, out of that comes a sense that you don’t want to be the first mover because you might lose market.”
The value of coffee
While Lachlan believes the price of coffee should rise, he also understands that it might not always be well received by customers, as coffee prices have remained relatively stagnant for so long.
“I guess what coffee’s got going against it is its value or perceived value, right?”
“It has been very much seen as a commodity for so long. So changing mainstream perceptions of it might be hard.”
While changing consumer perceptions of the value of coffee might be hard, it’s something that needs to happen. After all, coffee is a speciality product that takes a long time to craft, and its price and value should reflect that.
“It’s a speciality product that’s been laboured over for hours, days, years… Will we start to see prices like $6.50 or $7? I think, absolutely… because that’s the right price, that’s what it’s worth.”
“There’s been so much care put into these products, but the price or value hasn’t really adjusted for that. So yeah, I think that’s here to stay.”
Listen to Raw Podcast
Listen to the full interview with Lachlan on pushing the boundaries of what a coffee brand can be.
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