Aussies won’t cut back on coffee despite cost pressures

Cafes are also turning to social media trending flavours to boost interest in the category.

Australians are still making room for cafés and restaurants despite tighter budgets, with hospitality spending rising 7.6% year-on-year (YoY) in May, with hospitality accounting for one in every $10 spent, according to National Australia Bank (NAB).

Western Australia recorded the strongest growth, up 8.5% YoY, followed by the Northern Territory at 7.8%. New South Wales and the ACT both lifted 7.1%.

Over the year to May, growth was recorded across all sub-categories. The strongest growth was in spending on catering services, whilst growth was more modest in takeaway food services.

“Australians are still finding room for cafés and restaurants, even as budgets tighten. What we are seeing is more selective spending, and businesses that move quickly are the ones winning it,” Victoria Dario Medugorac, NAB Head of Small Business said.

Café and restaurant spending rose 2.9% in May, outpacing overall consumer spending, which increased 1.1%.

Globally, coffee chains are turning to unique flavours such as ube to capitalise on social media-driven trends, a move to target younger consumers according to GlobalData.

Ube, a Southeast Asian purple yam known for its vibrant colour and subtly sweet flavour, has surged in popularity online, with analysts describing it as a potential successor to the matcha craze.

The report said that more than 60% of Gen Z and millennials use social media to discover new flavours, whilst many also share their food and drink experiences online.

Major café chains have quickly embraced the trend. Starbucks launched its Ube Vanilla Velvet Latte, Ube Vanilla Velvet Matcha, and Ube Vanilla Macchiato, supported by TikTok-focused campaigns featuring colourful drink visuals and seasonal slogans such as “spring is purple this year.”