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I have a friend who runs a brewery. They distribute a ridiculous amount of their product into stores around the world and have won many awards, yet they make ve

I have a friend who runs a brewery. They distribute a ridiculous amount of their product into stores around the world and have won many awards, yet they make very little margin from all that. He told me they make an overwhelming amount of money off of the tasting room attached to their physical brewery because the beer itself is effectively water in terms of cost so they make profit by not having to pay any middle men in the tasting room. My suspicion is that in the coffee world, if you source and roast your own beans and serve them direct in a venue you own you get a similar effect. I think it must be essential to run the roastery yourself to make it work. That work goes well beyond what is required to just open a cafe and serve someone else’s coffee. Starbucks has simply insane process automation, training, branding, marketing, custom drink labs pushing out new flavors every two weeks, complete control of their global supply chains. It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have.”

dragonwriter 8y ago
> It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have.” Source and roast your own beans, don't overroast the beans, charge a premium over Starbucks for not producing crap coffee from overroasted beans. Starbucks does some impressive work with the candy flavors it adds to distract from their coffee, but...
- gambiting 8y ago
  I never had any issue with the way Starbucks coffee tastes - it's just coffee. I definitely don't pick my coffee shops based on the coffee taste - it's only a matter of distance/price, nothing else.
  - Marazan 8y ago
    That's fine everything is personal taste. ... Starbucks coffee tastes like crap to me and the reason is they chose crappy quality beans and then over roast them.
  - valvar 8y ago
    Well, then you're not part of the segment that's targeted by specialist coffee shops.
    - intended 8y ago
      Which circles back to this question > It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have. Specialists stores have specialist profits - they wont be hitting the mass market, because the mass market taste profile is different. If you try to grow, then you may as well give up to starbucks which has the money to taste test and advertise enough to ride the wave of human attention.
  - dannypi921 8y ago
    If it's strictly distance/price, then you make all of your coffee at home and work, right? You would never even think about going to Starbucks if that is all you cared about. Now you may pick coffee shops based on atmosphere, which I think many people do.
    - gambiting 8y ago
      I do, I drink coffee at home before going to work, then at work we have a machine that's free to use. But obviously there are times when I am away and want a cup of coffee, and then I will occasionally have starbucks, because it happens to be the only thing available/nearest/cheapest - I honestly don't care for the taste.
      - pbhjpbhj 8y ago
        I'd expect it's not the only thing, but you choose it because of brand recognition? That's usually how brand advertising pays off.
- michaelcampbell 8y ago
  This is a thinly disguised rant of your tastes vs. Starbucks as opposed to any kind of actual answer. And kind of hipster pretentious douchey to those that may like it. Try again?
  - Daishiman 8y ago
    No dude, just like fine dining, wine tasting and other things there are definitely margins of wide preference but there's also very clear tastes that are objectionable to anyone who tastes them and is aware of them. You can have a preference of reds or whites but anyone who's trained can taste when a wine has oxidsized or turned sour and those are pretty objective statements of fact. Overroasted coffee is definitely a thing if you've done coffee tastings and actually know what coffee tastes like and how the roasting process affects flavor profiles.
  - dragonwriter 8y ago
    > This is a thinly disguised rant of your tastes vs. Starbucks as opposed to any kind of actual answer No, it's an actual answer of one way that a number of relatively small and some fairly large coffee shop chains can and do survive when Starbucks exists and is ubiquitous. It includes, of course, an endorsement of the taste to which those shops appeal as part of that strategy.
  - dang 8y ago
    Personal attacks will get you banned here, regardless of how annoying another comment may be. Please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and don't post like this to HN.
- mcguire 8y ago
  "charge a premium over Starbucks" $15 lattes, anyone?
  - tudelo 8y ago
    To be fair, a starbucks latte is more like 5 dollars..
- Terretta 8y ago
  Objections from sibling comments aside, roughly ‘everyone’ who has compared coffees for taste feels Starbucks is ‘overroasted’. Curious then why Starbucks doesn’t adjust. Is it something in the scale manufacturing, such as, more margin for error in the overroasted side, so taste will be the same signature burnt at every Starbucks in the world? Is it that their market is former fast food coffee drinkers used to bland and burnt drips from McDonalds who will try a Starbucks, find it so ‘robust’ (ahem) as to be obvious, and that’s the end of the experimentation? There has to be a data driven reason.
  - ghaff 8y ago
    One popular theory among people who don't like Starbucks coffee is that a dark roast tends to make variations in or quality of the coffee beans less important than in the case of a lighter roast. That said, Starbucks is obviously popular with a lot of people. Personally, I think their coffee and some of their other drinks are fine. I don't always go there (not that I'm a coffeeshop regular) but that's for reasons other than their coffee quality. (I admittedly tend to use darker roasts when I make coffee at home as well.)
  - lostlogin 8y ago
    > Curious then why Starbucks doesn’t adjust. Poor quality beans and robusta are ‘hidden’ with a dark roast as the flavour moves to bitter. This also lasts a long time and doesn’t go stale for ages. As a general rule in coffee, light roasts have a variety of tastes and dark ones are just bitter. This saves a lot of money. Low quality arabica beans are less than half the price of good ones, and that’s for me, purchasing a few kg at a time. Starbucks will be using a lot of low grade robusta and that stuff cheaper again. Combine this with a brand which makes coffee where the dominant flavour isn’t the coffee but the milk (if you can call miscellaneous juiced nuts etc that) which is often flavoured. I don’t think the coffee will be their primary cost in consumables, I’m guessing milk is. If you want to have a play, get a heat gun and a kilo of beans. Have a play about with different roast styles. It’s a slippery slope but it isn’t an expensive one. Edit: Here is a link with a breakdown of Starbucks costs. Not sure how accurate it is, but it puts the coffee as 16c per cup, and the milk at the same. The cup itself is about 32c according to the article. http://coffeemakersusa.com/pricing-breakdown-cup-coffee/ http://coffeemakersusa.com/pricing-breakdown-cup-coffee/
arendtio 8y ago
It sounds like all the beer they distribute is just promotion for their tasting room ;-)
ghaff 8y ago
Especially the branding although process and scale probably help too. I used to think that, when Starbucks started selling coffee to every hotel that filled up urns for meeting rooms, it would be some serious brand dilution. But it wasn't. Coffee snobs like those downthread notwithstanding, most people don't care. I don't care most of the time although I try to frequent local shops for the variety. So anything that gets a lot of people to default to Starbucks, especially for a morning caffeine fix habit, is a win.
- heronymus 8y ago
  Not a native speaker, I don't understand the meaning of "filled up urns for meeting rooms"?
  - ghaff 8y ago
    The big coffee containers with taps (e.g. https://www.walmart.com/ip/Hamilton-Beach-42-Cup-Coffee-Urn-Model-40515/14320941 https://www.walmart.com/ip/Hamilton-Beach-42-Cup-Coffee-Urn-...) that get set out by hotels and other event spaces for people to pour themselves coffee. They tend to sit out over a heat source and, if the coffee wasn't lousy to begin with, it is after it's been burning over a flame or other heat source for an hour or two.
  - seibelj 8y ago
    The big coffee buckets used for big meetings and conferences. Usually the coffee is bad in them.
  - simonebrunozzi 8y ago
    heronymus, if it is still not clear, the "urn" is the large coffee pot. (not a native English speaker myself, and I tried my best to interpret your difficulty).
  - deleted 8y ago
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deleted 8y ago
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raverbashing 8y ago
Don't forget the "tax advantages" of Starbucks

dragonwriter 8y ago

> It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have.” Source and roast your own beans, don't overroast the beans, charge a premium over Starbucks for not producing crap coffee from overroasted beans. Starbucks does some impressive work with the candy flavors it adds to distract from their coffee, but...

gambiting 8y ago
I never had any issue with the way Starbucks coffee tastes - it's just coffee. I definitely don't pick my coffee shops based on the coffee taste - it's only a matter of distance/price, nothing else.
- Marazan 8y ago
  That's fine everything is personal taste. ... Starbucks coffee tastes like crap to me and the reason is they chose crappy quality beans and then over roast them.
- valvar 8y ago
  Well, then you're not part of the segment that's targeted by specialist coffee shops.
  - intended 8y ago
    Which circles back to this question > It would be more accurate to ask: “How the F can anyone make any money when Starbucks is on every other street corner and has the advantages of scale they have. Specialists stores have specialist profits - they wont be hitting the mass market, because the mass market taste profile is different. If you try to grow, then you may as well give up to starbucks which has the money to taste test and advertise enough to ride the wave of human attention.
- dannypi921 8y ago
  If it's strictly distance/price, then you make all of your coffee at home and work, right? You would never even think about going to Starbucks if that is all you cared about. Now you may pick coffee shops based on atmosphere, which I think many people do.
  - gambiting 8y ago
    I do, I drink coffee at home before going to work, then at work we have a machine that's free to use. But obviously there are times when I am away and want a cup of coffee, and then I will occasionally have starbucks, because it happens to be the only thing available/nearest/cheapest - I honestly don't care for the taste.
    - pbhjpbhj 8y ago
      I'd expect it's not the only thing, but you choose it because of brand recognition? That's usually how brand advertising pays off.
michaelcampbell 8y ago
This is a thinly disguised rant of your tastes vs. Starbucks as opposed to any kind of actual answer. And kind of hipster pretentious douchey to those that may like it. Try again?
- Daishiman 8y ago
  No dude, just like fine dining, wine tasting and other things there are definitely margins of wide preference but there's also very clear tastes that are objectionable to anyone who tastes them and is aware of them. You can have a preference of reds or whites but anyone who's trained can taste when a wine has oxidsized or turned sour and those are pretty objective statements of fact. Overroasted coffee is definitely a thing if you've done coffee tastings and actually know what coffee tastes like and how the roasting process affects flavor profiles.
- dragonwriter 8y ago
  > This is a thinly disguised rant of your tastes vs. Starbucks as opposed to any kind of actual answer No, it's an actual answer of one way that a number of relatively small and some fairly large coffee shop chains can and do survive when Starbucks exists and is ubiquitous. It includes, of course, an endorsement of the taste to which those shops appeal as part of that strategy.
- dang 8y ago
  Personal attacks will get you banned here, regardless of how annoying another comment may be. Please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and don't post like this to HN.
mcguire 8y ago
"charge a premium over Starbucks" $15 lattes, anyone?
- tudelo 8y ago
  To be fair, a starbucks latte is more like 5 dollars..
Terretta 8y ago
Objections from sibling comments aside, roughly ‘everyone’ who has compared coffees for taste feels Starbucks is ‘overroasted’. Curious then why Starbucks doesn’t adjust. Is it something in the scale manufacturing, such as, more margin for error in the overroasted side, so taste will be the same signature burnt at every Starbucks in the world? Is it that their market is former fast food coffee drinkers used to bland and burnt drips from McDonalds who will try a Starbucks, find it so ‘robust’ (ahem) as to be obvious, and that’s the end of the experimentation? There has to be a data driven reason.
- ghaff 8y ago
  One popular theory among people who don't like Starbucks coffee is that a dark roast tends to make variations in or quality of the coffee beans less important than in the case of a lighter roast. That said, Starbucks is obviously popular with a lot of people. Personally, I think their coffee and some of their other drinks are fine. I don't always go there (not that I'm a coffeeshop regular) but that's for reasons other than their coffee quality. (I admittedly tend to use darker roasts when I make coffee at home as well.)
- lostlogin 8y ago
  > Curious then why Starbucks doesn’t adjust. Poor quality beans and robusta are ‘hidden’ with a dark roast as the flavour moves to bitter. This also lasts a long time and doesn’t go stale for ages. As a general rule in coffee, light roasts have a variety of tastes and dark ones are just bitter. This saves a lot of money. Low quality arabica beans are less than half the price of good ones, and that’s for me, purchasing a few kg at a time. Starbucks will be using a lot of low grade robusta and that stuff cheaper again. Combine this with a brand which makes coffee where the dominant flavour isn’t the coffee but the milk (if you can call miscellaneous juiced nuts etc that) which is often flavoured. I don’t think the coffee will be their primary cost in consumables, I’m guessing milk is. If you want to have a play, get a heat gun and a kilo of beans. Have a play about with different roast styles. It’s a slippery slope but it isn’t an expensive one. Edit: Here is a link with a breakdown of Starbucks costs. Not sure how accurate it is, but it puts the coffee as 16c per cup, and the milk at the same. The cup itself is about 32c according to the article. http://coffeemakersusa.com/pricing-breakdown-cup-coffee/ http://coffeemakersusa.com/pricing-breakdown-cup-coffee/

arendtio 8y ago

It sounds like all the beer they distribute is just promotion for their tasting room ;-)

ghaff 8y ago

Especially the branding although process and scale probably help too. I used to think that, when Starbucks started selling coffee to every hotel that filled up urns for meeting rooms, it would be some serious brand dilution. But it wasn't. Coffee snobs like those downthread notwithstanding, most people don't care. I don't care most of the time although I try to frequent local shops for the variety. So anything that gets a lot of people to default to Starbucks, especially for a morning caffeine fix habit, is a win.

heronymus 8y ago
Not a native speaker, I don't understand the meaning of "filled up urns for meeting rooms"?
- ghaff 8y ago
  The big coffee containers with taps (e.g. https://www.walmart.com/ip/Hamilton-Beach-42-Cup-Coffee-Urn-Model-40515/14320941 https://www.walmart.com/ip/Hamilton-Beach-42-Cup-Coffee-Urn-...) that get set out by hotels and other event spaces for people to pour themselves coffee. They tend to sit out over a heat source and, if the coffee wasn't lousy to begin with, it is after it's been burning over a flame or other heat source for an hour or two.
- seibelj 8y ago
  The big coffee buckets used for big meetings and conferences. Usually the coffee is bad in them.
- simonebrunozzi 8y ago
  heronymus, if it is still not clear, the "urn" is the large coffee pot. (not a native English speaker myself, and I tried my best to interpret your difficulty).
- deleted 8y ago
  [deleted]

deleted 8y ago

[deleted]

raverbashing 8y ago

Don't forget the "tax advantages" of Starbucks