6 ms·

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 bean

by 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.
- paxys 2y ago
  There is no "standard 22g basket". Regular 8-12 oz drinks at most coffee shops have a single 7-10g shot. Double shots and larger sizes always cost more.
  - Arch-TK 2y ago
    Outside of Italy nobody uses single shot baskets. All espresso based drinks you will find will be double-based. And especially any place which is doing specialty coffee is going to be using larger doses to make extraction more consistent with lighter roasted coffee (in the realm from 18g to 28g). It's pretty normal nowadays to see 20g or 22g baskets used in specialty coffee shops. You can obviously order a single but the price difference is just a trick, the other shot gets dumped unless two people order singles at the same time.
    - paxys 2y ago
      I have no idea what you are talking about. The world's largest coffee chain (Starbucks) uses a single 1 oz/7 g espresso shot in their short (8oz) And tall (12oz) drink sizes. To get two shots you have to upgrade to "grande" (16oz), or specifically ask for (and pay for) an extra shot. Most coffee shops do the same for their smaller drinks.
      - Arch-TK 2y ago
        Starbucks makes coffee flavoured desert drinks. We are talking about specialty coffee shops. I've also never seen starbucks use a single shot basket to pour a single shot. They always just split, this is broadly the standard. Nobody outside of Italy is making single shots with a single shot basket.
        rightbyte 2y ago
        > Starbucks makes coffee flavoured desert drinks. You don't have to order the caramel drinks? There are coffee, latte, cappuccino etc too everywhere, right?
Arch-TK 2y ago
25 cents (20 pence)? Ultra high end $15-20/lbs (£6.40-£8.50/250g) beans? Where are you getting good coffee that cheap? You're pulling shots out of 7.5g of coffee? I am buying some nice beans here in the UK and my espresso coffee cost has now reached £1.10 per. I'm doing relatively standard 19g shots.
- apelapan 2y ago
  I think you are using a very narrow definition of "nice beans". At one pound per cup in bean cost, you are doing some coffee equivalent of having a glass from a £500 champagne bottle or listening to music from a pair of £10k speakers. Amazing for sure, but not a reasonable floor for defining "nice". Normal premium beans are around €15 in a 450g bag over here, and I can't imagine they are all that much more expensive in the UK. If you buy in bulk, they will be a lot cheaper.
  - Arch-TK 2y ago
    The actual premium beans are even more expensive. Yes at £20 per 350g I am paying slightly more than normal for "nice beans". But most places sell for no less than £10 per 250g of light roast. That's still 76p ($1) per shot. The only things going for less are darker roasts, supermarket coffee and blends.
    - OJFord 2y ago
      Pact is £7.95/250g (or I think £8.95 to new customers) for the mid-tier (any roast) bags. House blend & premium tier are iirc £1 either side.
      - Kirby64 2y ago
        250g bags are only 70% of the size of a 350g bag. Also, they don't seem to offer anything except blends. Their actual more expensive coffee (which even then, it's unclear if this is a blend or not) is 14 pounds a bag, which... when you scale to 350g comes out to, unsurprisingly, about 20 pounds.

by paxys 2y ago

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.

paxys 2y ago
There is no "standard 22g basket". Regular 8-12 oz drinks at most coffee shops have a single 7-10g shot. Double shots and larger sizes always cost more.
- Arch-TK 2y ago
  Outside of Italy nobody uses single shot baskets. All espresso based drinks you will find will be double-based. And especially any place which is doing specialty coffee is going to be using larger doses to make extraction more consistent with lighter roasted coffee (in the realm from 18g to 28g). It's pretty normal nowadays to see 20g or 22g baskets used in specialty coffee shops. You can obviously order a single but the price difference is just a trick, the other shot gets dumped unless two people order singles at the same time.
  - paxys 2y ago
    I have no idea what you are talking about. The world's largest coffee chain (Starbucks) uses a single 1 oz/7 g espresso shot in their short (8oz) And tall (12oz) drink sizes. To get two shots you have to upgrade to "grande" (16oz), or specifically ask for (and pay for) an extra shot. Most coffee shops do the same for their smaller drinks.
    - Arch-TK 2y ago
      Starbucks makes coffee flavoured desert drinks. We are talking about specialty coffee shops. I've also never seen starbucks use a single shot basket to pour a single shot. They always just split, this is broadly the standard. Nobody outside of Italy is making single shots with a single shot basket.
      - rightbyte 2y ago
        > Starbucks makes coffee flavoured desert drinks. You don't have to order the caramel drinks? There are coffee, latte, cappuccino etc too everywhere, right?

Arch-TK 2y ago

25 cents (20 pence)? Ultra high end $15-20/lbs (£6.40-£8.50/250g) beans? Where are you getting good coffee that cheap? You're pulling shots out of 7.5g of coffee? I am buying some nice beans here in the UK and my espresso coffee cost has now reached £1.10 per. I'm doing relatively standard 19g shots.

apelapan 2y ago
I think you are using a very narrow definition of "nice beans". At one pound per cup in bean cost, you are doing some coffee equivalent of having a glass from a £500 champagne bottle or listening to music from a pair of £10k speakers. Amazing for sure, but not a reasonable floor for defining "nice". Normal premium beans are around €15 in a 450g bag over here, and I can't imagine they are all that much more expensive in the UK. If you buy in bulk, they will be a lot cheaper.
- Arch-TK 2y ago
  The actual premium beans are even more expensive. Yes at £20 per 350g I am paying slightly more than normal for "nice beans". But most places sell for no less than £10 per 250g of light roast. That's still 76p ($1) per shot. The only things going for less are darker roasts, supermarket coffee and blends.
  - OJFord 2y ago
    Pact is £7.95/250g (or I think £8.95 to new customers) for the mid-tier (any roast) bags. House blend & premium tier are iirc £1 either side.
    - Kirby64 2y ago
      250g bags are only 70% of the size of a 350g bag. Also, they don't seem to offer anything except blends. Their actual more expensive coffee (which even then, it's unclear if this is a blend or not) is 14 pounds a bag, which... when you scale to 350g comes out to, unsurprisingly, about 20 pounds.