Monday, January 21, 2013

Article: Hidden Costs of Coffee

Profit Margins....
Business Model.....

A Coffee shop is a business, and as all businesses start out to be - they must be profitable. I often hear  - "The coffee here (insert) is tooo expensive. I'lll stick to the double-double (referring to Canadians sweetheart Tim Horton's)" But this is my VICE, my choice....

Transparency is a great thing... soo Serious Eats did a great article about the cost of coffee with Erin Meister of Counter Culture.

A pound of coffee equals 448 grams. According to convention, most brewing methods take between 1.5 and 2 grams of coffee beans per ounce of liquid, which means your 10-ounce cup might require anywhere from 15 to 20 grams of coffee to prepare, adjusted to taste. One pound of the stuff, then, has the potential to yield about 30 10-ounce cups, when brewing with the absolute minimum coffee-to-water ratio. (Note: That probably wouldn't be the best-tasting coffee, though it sure would be more cost-effective for the shop owner.) More likely, factoring in waste and other considerations, a café might squeak 23 or 24 cups out of a pound of beans.
"Sure," you might be thinking, "but if they charge $2 for that 10-ounce cup, they're making almost $40 profit off an $8 bag of wholesale beans!"
In a vacuum that might be the case, but that money is by no means pure profit for a café. Besides the beans, there's the cost of the filter to use in the brewer (which itself costs money, plus electricity to boot); the water that passes through the grounds; the cup it gets poured into; the milk and sugar you add before your first sip; the lid you put on it to avoid spilling on your shirt; and the wad of napkins you snag before walking out, "just in case."
Yes, that 6-pack of beer ($13) for 6 x 473ml of deliciousness seems cheap, $1.33/10-oz cup
In comparison to coffee ($17 for 1 lbs. 448 g) results in $0.70/10-oz cup...

As our economies start to tighten their fiscal/budgetary belts it's no wonder we start to focus on the micro details as opposed to the macro.

Choose your battles.
Maybe that $3 Cup of coffee isn't your thing. It's not for everyone.

Full article here

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