7 ms·

Coffee YouTuber James Hoffman makes a pretty convincing argument that we are living in the golden age of coffee. Lots of excellent coffee and it’s pretty afford

Coffee YouTuber James Hoffman makes a pretty convincing argument that we are living in the golden age of coffee. Lots of excellent coffee and it’s pretty affordable. But he thinks it could end soon. Everybody knows that climate change could be a problem, but he says an even bigger problem is urbanization. The average coffee farmer’s age is 50-something and their kids don’t want to take over the farm, they want to move to the city. The people who are willing to work the farms, want to be paid a lot more, so there’s upward pressure on prices. Right now cafes can charge $4-$6 for a coffee drink and people seem to be willing to pay it. As coffee gets more expensive, how many people are willing to pay $6-$8? For a lot of cafes, it won’t take much of a drop in business to kill them.

glitchc 2y ago
Nah, coffee can go to $12 a cup and people will still pay. We will see corporations subsidize the cost for their workers as necessary.
- woleium 2y ago
  Don’t they do that already?
yapyap 2y ago
I mean let’s be honest, coffee will rise to 6-8 bucks either way cause of inflation
ericjmorey 2y ago
Corporate agriculture will buy up the land and find ways to produce at a profit. Starbucks regularly charges $15 for coffee flavored drinks today. I'm not worried about coffee. I'm worried about climate induced resource wars.
- Kirby64 2y ago
  > Starbucks regularly charges $15 for coffee flavored drinks today. Uh, where? Worst I've seen is the extra large Frappucino, which could be as much as $10 after tax and a generous tip. I struggle to see how you could get to $15 for a single drink. If you buy regular coffee or a more basic non-milkshake drink, they're closer to $5.
standardUser 2y ago
I've been able to buy a pound of high-quality whole bean coffee for $15-$20 for about 20 years now. I assumed the cost at cafes had more to do with labor and rent.
9283409232 2y ago
I swear most cafes I've been to are already selling coffee for $6-$10.
- llamaimperative 2y ago
  That’s almost entirely for rent. IMO if we actually wanted to overhaul our economy, we could do it by just having POS’s print the portion of each bill that goes into rent. Then the culprit of COL increases would be quite clear. Especially given that wages are themselves also driven up primarily by rent.
  - brailsafe 2y ago
    Agreed, and the cost of any new building that went to taxes, permits, development fees.
    - llamaimperative 2y ago
      That is all baked into rent, including the developer's profit margins
      - brailsafe 2y ago
        That's my point, the data is obscured in such a way that all we see is an abstract price going up, but not how much of that price was directly or indirectly influenced by the cost of bureaucracy.
        llamaimperative 2y ago
        Permitting etc. is 0.5% to 2% of development costs, which is itself a small subset of what rent pays for, and only for the first 5-10 years. This number would be $0 for most cups of coffee (made in paid-for buildings) and <$0.02 for pretty much all the remaining ones, I think? Rent on the other hand is 15%+ for every cup of coffee in perpetuity (not counting second-order question of what % of wages go directly into residential rent).
paxys 2y ago
The cost of coffee beans in a standard espresso drink is ~25 cents, and that's if you are brewing ultra high-end $15-20/lbs beans. Raising the price of the beans by 15% or 30% or even 50% isn't going to make all that much difference to margins when the end product retails for $4-6 or more. The coffee shop business is only tangentially related to coffee. Whether you will be successful or not depends more on location, labor, branding, interior decor, music, bakery, food, upsells..
- TZubiri 2y ago
  I think there would be magnifying effects, but possibly in the opposite direction. If coffee becomes more expensive, buying a bag of coffee for your home and being terribly inefficient with doseages and such would not be so viable. If coffee houses can maintain price relatively stable they become much more viable. Especially since the other cost factors can keep coffee consumption in check.
  - thatguy0900 2y ago
    I really can't imagine home coffee reaching an expense of 5$+ a cup to equal out to cafes
- criddell 2y ago
  $15-$20 / lb is not ultra high end. That’s the normal price for beans from most roasters. High end is around $40 / lb and ultra high end is much more.
- kneath 2y ago
  Might want to check your math there. At $20/lb, zero waste (!!), 18g of coffee is $0.80/shot. Add in 10-15% waste (accurately predicting exact supply of beans is almost impossible, plus dialing in, mistakes, and training) and a more standard 22g basket, you get $1.12 per drink. Aiming for 25% COGS, that pushes up the price of a cup to $4.50 before milk, syrups, cups, etc. If the cost of coffee doubled, you'd be looking at the cost of coffee only being 38% COGS for a $6 drink. That kind of increase is not only going to completely remove all margins, but likely put you in the red per drink served.
TZubiri 2y ago
I'd take that chance to (slowly) quit coffee. Possibly go into lower caffeine beverages like tea.
yabatopia 2y ago
Not a big deal. Coffee is not a necessity. The coffee monoculture is devastating for the environment. Most small coffee farmers and plantation workers don't earn a livable income. Only 10% of the retail price of coffee goes to farmers. The whole industry is exploitative. Don’t drink coffee. It’s that easy.
- brailsafe 2y ago
  Ya but I love it, and there are plenty of small farms that do it for a living.
Yeul 2y ago
That's because coffee farmers don't make any money it's all going to Western corporations.
csomar 2y ago
> The average coffee farmer’s age is 50-something and their kids don’t want to take over the farm, they want to move to the city. The people who are willing to work the farms, want to be paid a lot more, so there’s upward pressure on prices. Good. Farmers are criminally under-paid when people doing nothing productive in the economy are getting paid for their annoyances. It is time the system gets a reset.
thatguy0900 2y ago
It's hard not to imagine we're in a golden age for most things at the moment.
lelanthran 2y ago
> Right now cafes can charge $4-$6 for a coffee drink and people seem to be willing to pay it. As coffee gets more expensive, how many people are willing to pay $6-$8? For a lot of cafes, it won’t take much of a drop in business to kill them. Sure, but to drive an increase of that amount using coffee bean prices alone requires coffee beans to double in price. The majority of that $6 coffee you are buying at a cafe is non-bean costs. IOW, of that $6 coffee, maybe $1 worth of beans are used. (If, like me, you drink only black coffee with no sugar or milk or flavouring added, you will also experience the frustration of paying almost the same as everyone else who is buying some flavoured coffee)

glitchc 2y ago

Nah, coffee can go to $12 a cup and people will still pay. We will see corporations subsidize the cost for their workers as necessary.

woleium 2y ago
Don’t they do that already?

yapyap 2y ago

I mean let’s be honest, coffee will rise to 6-8 bucks either way cause of inflation

ericjmorey 2y ago

Corporate agriculture will buy up the land and find ways to produce at a profit. Starbucks regularly charges $15 for coffee flavored drinks today. I'm not worried about coffee. I'm worried about climate induced resource wars.

Kirby64 2y ago
> Starbucks regularly charges $15 for coffee flavored drinks today. Uh, where? Worst I've seen is the extra large Frappucino, which could be as much as $10 after tax and a generous tip. I struggle to see how you could get to $15 for a single drink. If you buy regular coffee or a more basic non-milkshake drink, they're closer to $5.

standardUser 2y ago

I've been able to buy a pound of high-quality whole bean coffee for $15-$20 for about 20 years now. I assumed the cost at cafes had more to do with labor and rent.

9283409232 2y ago

I swear most cafes I've been to are already selling coffee for $6-$10.

llamaimperative 2y ago
That’s almost entirely for rent. IMO if we actually wanted to overhaul our economy, we could do it by just having POS’s print the portion of each bill that goes into rent. Then the culprit of COL increases would be quite clear. Especially given that wages are themselves also driven up primarily by rent.
- brailsafe 2y ago
  Agreed, and the cost of any new building that went to taxes, permits, development fees.
  - llamaimperative 2y ago
    That is all baked into rent, including the developer's profit margins
    - brailsafe 2y ago
      That's my point, the data is obscured in such a way that all we see is an abstract price going up, but not how much of that price was directly or indirectly influenced by the cost of bureaucracy.
      - llamaimperative 2y ago
        Permitting etc. is 0.5% to 2% of development costs, which is itself a small subset of what rent pays for, and only for the first 5-10 years. This number would be $0 for most cups of coffee (made in paid-for buildings) and <$0.02 for pretty much all the remaining ones, I think? Rent on the other hand is 15%+ for every cup of coffee in perpetuity (not counting second-order question of what % of wages go directly into residential rent).

paxys 2y ago

The cost of coffee beans in a standard espresso drink is ~25 cents, and that's if you are brewing ultra high-end $15-20/lbs beans. Raising the price of the beans by 15% or 30% or even 50% isn't going to make all that much difference to margins when the end product retails for $4-6 or more. The coffee shop business is only tangentially related to coffee. Whether you will be successful or not depends more on location, labor, branding, interior decor, music, bakery, food, upsells..

TZubiri 2y ago
I think there would be magnifying effects, but possibly in the opposite direction. If coffee becomes more expensive, buying a bag of coffee for your home and being terribly inefficient with doseages and such would not be so viable. If coffee houses can maintain price relatively stable they become much more viable. Especially since the other cost factors can keep coffee consumption in check.
- thatguy0900 2y ago
  I really can't imagine home coffee reaching an expense of 5$+ a cup to equal out to cafes
criddell 2y ago
$15-$20 / lb is not ultra high end. That’s the normal price for beans from most roasters. High end is around $40 / lb and ultra high end is much more.
kneath 2y ago
Might want to check your math there. At $20/lb, zero waste (!!), 18g of coffee is $0.80/shot. Add in 10-15% waste (accurately predicting exact supply of beans is almost impossible, plus dialing in, mistakes, and training) and a more standard 22g basket, you get $1.12 per drink. Aiming for 25% COGS, that pushes up the price of a cup to $4.50 before milk, syrups, cups, etc. If the cost of coffee doubled, you'd be looking at the cost of coffee only being 38% COGS for a $6 drink. That kind of increase is not only going to completely remove all margins, but likely put you in the red per drink served.

TZubiri 2y ago

I'd take that chance to (slowly) quit coffee. Possibly go into lower caffeine beverages like tea.

yabatopia 2y ago

Not a big deal. Coffee is not a necessity. The coffee monoculture is devastating for the environment. Most small coffee farmers and plantation workers don't earn a livable income. Only 10% of the retail price of coffee goes to farmers. The whole industry is exploitative. Don’t drink coffee. It’s that easy.

brailsafe 2y ago
Ya but I love it, and there are plenty of small farms that do it for a living.

Yeul 2y ago

That's because coffee farmers don't make any money it's all going to Western corporations.

csomar 2y ago

> The average coffee farmer’s age is 50-something and their kids don’t want to take over the farm, they want to move to the city. The people who are willing to work the farms, want to be paid a lot more, so there’s upward pressure on prices. Good. Farmers are criminally under-paid when people doing nothing productive in the economy are getting paid for their annoyances. It is time the system gets a reset.

thatguy0900 2y ago

It's hard not to imagine we're in a golden age for most things at the moment.

lelanthran 2y ago

> Right now cafes can charge $4-$6 for a coffee drink and people seem to be willing to pay it. As coffee gets more expensive, how many people are willing to pay $6-$8? For a lot of cafes, it won’t take much of a drop in business to kill them. Sure, but to drive an increase of that amount using coffee bean prices alone requires coffee beans to double in price. The majority of that $6 coffee you are buying at a cafe is non-bean costs. IOW, of that $6 coffee, maybe $1 worth of beans are used. (If, like me, you drink only black coffee with no sugar or milk or flavouring added, you will also experience the frustration of paying almost the same as everyone else who is buying some flavoured coffee)