Australia Is Exporting Its $3.2 Billion Café Culture to the World

Barista training

Students undergo training at a Barista Basics class in Sydney. Photographer: Jeremy Piper/Bloomberg

Raj and Sharon Sidhu quit their steady public-service jobs in Singapore last year to open a cafe in the city-state, one of Asia’s most competitive coffee-selling markets. For an edge, they spent a month learning the trade in Sydney.

“That’s where our gurus are,” Raj said over the telephone from his “House of Commons” coffee bar in Singapore’s vibrant Little India neighborhood. “Everyone who’s got a cafe here is influenced by the coffee movement in Australia. Even our decorations -- clocks, scales, rugs, burlap coffee bags -- it’s all from Sydney.”

Once stereotyped as a land of meat pie-eaters and Foster’s lager-swillers, Australia has developed a A$4 billion ($3.2 billion) coffee-drinking market that devours more fresh beans per person than any other country. It’s also developed novel brews reproduced as far away as London and Seattle.

Starbucks Corp. last month credited the introduction of the flat white, a velvety variant of a latte first made in Australia or New Zealand in the 1980s, for helping to drive its fastest growth in quarterly sales in eight years. McDonalds Corp., which opened the world’s first McCafe in Melbourne 22 years ago, sought a U.S. trademark on the beverage in 2004.

A cup of flat white is prepared at the Barista Basics training school in Sydney. Photographer: Jeremy Piper/Bloomberg
A cup of flat white is prepared at the Barista Basics training school in Sydney. Photographer: Jeremy Piper/Bloomberg

Then last month, to reiterate Australia’s knack for a perfect crema, Canberra cafe-chain owner Sasa Sestic won the World Barista Championship in Seattle.

Perfect Brew

“We’ve perfected how to make a good, strong, milky coffee,” said Peter Hall, executive chairman of fund manager Hunter Hall International Ltd. Hall, an Australian, is also the founder of “Flat White,” one of two cafés he owns in London’s Soho district that, he says, introduced the city to antipodean coffee when it opened in 2005.

“What I wanted to do was be able to feed my caffeine addiction with some good coffee,” said Hall, adding that he was unimpressed with the drinks he was served in London when he moved there from Sydney in 1996. Almost two decades later, Hall isn’t surprised the flat white -- his favorite caffeinated drink -- has caught on abroad.

Before Starbucks added the flat white to its U.S. range in January, Whitbread Plc had been offering the hot drink in its U.K.-based Costa Coffee chain for four years. It’s on the menu in Bridgepoint Capital’s Pret a Manger restaurants, and JD Wetherspoon Plc is thinking about introducing it in its U.K. pubs, the Financial Times quoted founder Tim Martin as saying in March.

The flat white’s growing popularity is an endorsement of Australia’s evolving café scene, kick-started by visiting U.S. servicemen in the 1940s and influenced by European immigrants whose small, family-owned businesses represent tough competition for multinational chains.

Starbucks Struggles

There are just 24 Starbucks-branded coffee houses across Australia -- about the same number as can be found within a 10-minute walk of New York’s Times Square. The Seattle-based chain doesn’t even own those outlets; it sold them at a loss last year to Withers Group, the family-owned company that runs Australia’s 7-Eleven franchise.

“The coffee scene in Australia is different from that found in many other countries,” said Julia Illera, who tracks markets in Australia and New Zealand for Euromonitor International Ltd. “Australians expect their on-trade coffees to be made by specially-trained baristas, not just anyone pressing a button on the coffee machine.”

Carbon-Neutral

The nation is also an early adopter of premium coffee, Illera said. Organic, fair-trade, sustainable, single-source, carbon-neutral and micro-roasted artisanal products are included in the world-topping 1.3 kilograms of fresh beans consumed per person in Australia each year.

“It’s very hard to get bad coffee in Australia and, because of that, the bar’s been lifted,” said Jillian Adams, a food historian whose coffee academy in Melbourne was first in the country to offer barista accreditation.

In a red-painted kitchen above a barber’s shop and a discount clothing store in Sydney’s financial district, Tony Vitiello is teaching barista skills to students from Nepal, Japan, Colombia, Thailand, Malaysia and Italy.

“Some customers will drink maybe two or three of these a day,” he says, pouring freshly-brewed espresso into cups of hot water to make the Americano-style drink known locally as a long black. “That’s A$6 to A$9.”

$2,000 Course

Vitiello’s courses range from a three-hour session for A$99 to a two-month program that costs A$2,500 ($2,000) and is mainly taken by overseas students.

“It’s not easy to make coffee in Australia,” said Federico Galli, a 30-year-old from Florence. “In Italy we have four or five kinds of coffee. Here you have a lot: long black, flat white, chai latte -- piccolo latte, which I never heard of before.”

A two-minute walk away, Barista Basics has 22 pupils enrolled in its Sydney training school and the same number attending campuses in Melbourne and Brisbane. A quarter are foreign students or backpackers hoping to work in local cafés, said co-founder David Gee.

Singaporean Raj Sidhu took one of Gee’s coffee-making courses after being inspired by Australia’s café culture while on vacation there. He’s now sharing the allure in Singapore with each flat white and long black he serves.

“These people set up in different markets -- the U.K., Singapore, the U.S. -- and spread the news,” Gee said. “They’re the ambassadors of Australian coffee.”

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