Australia’s Coffee Industry Sees Major Consolidation Wave

With Australia’s coffee scene booming and no single company dominating the market, major players are racing to buy up rivals, invest in roasting infrastructure, and lock in supply chains to capture more of the $4 billion industry. The question isn’t whether consolidation is happening—it’s who’s moving fastest to control production, quality, and customer access.

The Australian coffee industry is worth over AUD 4 billion, with retail coffee alone accounting for around AUD 32 billion. Yet no single company leads the market—instead, roughly 6,700 independent operators split the profits, generating over AUD 250 million annually. But as the sector grows, companies are shifting strategies toward expansion via acquisition and vertical integration to gain scale and efficiency.

RFG Leads Acquisitions in Packaged and Retail Coffee

Retail Food Group (RFG), an Australian publicly traded food company, has been the most aggressive in consolidating well-known coffee brands. In 2014, RFG spent AUD 164 million acquiring Gloria Jean’s, one of Australia’s most recognised coffee chains, and another AUD 47 million on Brisbane-based Di Bella Coffee. Post-acquisition, RFG committed to a “farm to cup” model—sourcing beans directly and processing them in its own network of roasting facilities across Australia, the United States, and New Zealand. The company also plans to expand into the Middle East and China.

Fast Food Giants Expand Their Coffee Footprints

Beyond specialty and café chains, major fast-food players are betting big on coffee too. McDonald’s, which already operates 750 McCafé outlets across Australia with total coffee sales nearing AUD 40 billion, is expanding its coffee offering. The company recently announced plans to open a trendy new coffee concept, The Corner, in Sydney. Fast-food chains leverage their existing store networks to grow coffee sales with minimal additional overhead.

Convenience Stores and Vertical Integration

Convenience retailers are also getting in on the action. 7-Eleven Australia, operated by Withers Group, runs 600 stores and reported a 30% increase in hot beverage sales—including coffee and chocolate—in the past year. Withers plans to introduce a “AUD 1 coffee” option, aiming to push annual hot drink revenue to AUD 40 million. The group previously acquired Starbucks’ Australian operations and opened a 200-square-metre flagship store in Brisbane’s Garden City. Meanwhile, many coffee shops don’t own their grinders or espresso machines but lease them for 3–5 years from equipment providers. As the market matures, larger franchise groups are moving toward ownership and full vertical integration to control costs and quality.

Coffee Club Moves Toward Ownership and Direct Sales

Coffee Club, a major Australian café chain, is also pursuing vertical integration. Dan Gallo, CEO of Coffee Club’s Melbourne branch, stated the company is considering moving away from third-party roasters to operate its own roasting facility. The group also plans to sell packaged coffee both in-store and online, further integrating its supply chain and retail presence.

Frequently Asked Questions

Why is Australia’s coffee industry consolidating now?

Australia’s coffee market is worth over AUD 4 billion, with retail coffee contributing around AUD 32 billion, yet no single company dominates. As the market grows, businesses are pursuing acquisitions and vertical integration to achieve scale, control quality, and improve profitability.

Which companies are leading the consolidation?

Retail Food Group (RFG) has acquired Gloria Jean’s and Di Bella Coffee for a combined AUD 211 million. McDonald’s is expanding McCafé and launching new coffee concepts, while 7-Eleven is testing a AUD 1 coffee and growing its hot beverage sales. Coffee Club is considering owning its own roastery and selling packaged coffee.

What is RFG’s coffee strategy post-acquisition?

RFG follows a “farm to cup” model, sourcing beans directly and roasting them in its own facilities in Australia, the U.S., and New Zealand. The company also plans international expansion into the Middle East and China.

How are convenience stores like 7-Eleven getting involved in coffee?

7-Eleven Australia, with 600 stores, saw a 30% rise in hot drink sales last year. Withers Group, its owner, plans to launch a AUD 1 coffee offer and aims for AUD 40 million in annual hot beverage revenue. They also operate Starbucks locations in Australia.

Are coffee shops in Australia buying their own equipment?

Most coffee shops lease espresso machines and grinders for 3–5 years. However, larger chains are now purchasing their own equipment and moving toward vertical integration to manage costs and maintain consistency.

What is Coffee Club planning for growth?

Coffee Club may stop using external roasters and establish its own roasting facility. The company also intends to sell packaged coffee through its retail stores and online channels.

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