Australia’s Coffee Industry Sees Wave of Mergers

In Australia’s $4.3 billion coffee industry, no single company dominates—but that could soon change. With retail coffee sales alone worth $32 million annually and over 6,700 operators sharing the profits, competition is heating up. Now, major players are moving fast to consolidate.

Right now, no one company controls Australia’s coffee market. But that’s changing as big brands acquire rivals, buy equipment, and launch new ventures to boost their slice of a $4.3 billion pie.

Why the Coffee Market Is Consolidating

Australia’s coffee sector is unique. Unlike other industries, it lacks a clear market leader. Instead, around 6,700 individual coffee businesses share the market, generating more than $250 million in annual profit. But with steady growth in retail coffee sales—valued at approximately $32 billion—major companies are shifting strategies. Instead of staying small, they’re pursuing expansion through acquisitions and vertical integration to control costs, maintain quality, and increase their market share.

Big Players Making Big Moves

The first major move came from Retail Food Group (RFG), an Australian publicly traded retail food company. In 2023, RFG spent $164 million acquiring Gloria Jean’s, a well-known Australian coffee chain, and $47 million on Brisbane-based Di Bella Coffee. Following these purchases, RFG committed to a “farm to cup” model, sourcing beans directly and roasting in its own facilities across Australia, the United States, and New Zealand. The company also plans to expand into international markets including the Middle East and China.

Fast-food giants are also stepping up. McDonald’s, with $40 billion in total Australian sales, operates 750 McCafés nationwide and is opening a new concept store called The Corner in Sydney. Meanwhile, convenience store chain 7-Eleven, which has 600 outlets in Australia, reported a 30% rise in hot drink sales—including coffee and chocolate—last year. With its local arm controlled by the Withers Group, 7-Eleven is launching a “$1 coffee” promotion and expects hot drink revenue to hit $40 million. The group previously acquired Starbucks’ Australian operations and opened a 200-square-meter Starbucks outlet in Brisbane’s Garden City.

Trends in Equipment and Vertical Integration

A notable aspect of Australia’s coffee market is how many cafes rent their grinding and brewing equipment from coffee bean suppliers for terms of 3–5 years. But as the industry matures, larger franchise operators are shifting toward buying their own equipment—a move that supports vertical integration. Coffee Club, a major Australian coffee group, is another example. Dan Gallo, CEO of Coffee Club’s Melbourne branch, stated the company is pursuing further consolidation. They plan to stop using third-party roasters and instead purchase their own roasting facility. They also aim to sell packaged coffee both in-store and online.

Frequently Asked Questions

How big is Australia’s coffee industry?

Australia’s coffee industry is worth an estimated $4.3 billion, with the retail coffee segment alone accounting for around $32 billion in sales annually.

Who are the major players in the Australian coffee market?

Key players include Retail Food Group (owners of Gloria Jean’s and Di Bella), McDonald’s (with its 750 McCafé locations), 7-Eleven (which sells coffee through 600 stores and plans a $1 coffee promotion), and independent chains like Coffee Club. Starbucks is also present via its Australian franchise operated by the Withers Group.

What is vertical integration in coffee?

Vertical integration in coffee means a company controls multiple stages of the supply chain—in this case, sourcing beans, roasting, and retailing. Companies like RFG and Coffee Club are moving toward this model by owning roasting facilities and selling packaged coffee directly.

Are most Australian coffee shops independently owned?

Yes. Approximately 6,700 individual coffee businesses operate across Australia, sharing the market without any single dominant chain.

Why are coffee companies acquiring others?

To gain market share, control quality and costs, and streamline operations. Acquiring existing chains allows companies to expand quickly while maintaining consistent branding and product standards.

What is RFG’s coffee strategy?

RFG acquired Gloria Jean’s and Di Bella, and aims to roast its own beans in company-owned facilities across Australia, the U.S., and New Zealand. It plans to distribute coffee internationally, including in the Middle East and China.

FrontStreet Beans for Café Blends

For Australian-style café roasting, try FrontStreet Coffee’s Classic Blend: a balanced espresso with milk chocolate, caramel, and a hint of dark cherry. Also consider the Black Cocoa Blend for a bold profile with roasted nuts and dark berry notes—ideal for milk drinks. Both blends showcase the kind of roasty, approachable profiles common in consolidated coffee chains. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.