If it is so expensive -why do you still drink it?

by chee Leng (on coffee makers)
(Singapore)

Is this coffee expensive?

Is this coffee expensive?

We, human is an interesting breed. We complained about a situation but we still go head on into it! Take cafe coffee for instance, the whole world is shouting about how expensive it is -but sales grew year on year!


From Global brands like Starbucks to local India brand CCD (cafe Coffee Day), they are all expanding. So, is cafe coffee really more expensive, or are consumers just making it up?

Take Starbucks as an example, a cup of coffee on average cost about $3.00. If you would to make a single serve coffee say, Keurig per serve, it is about $0.50-$0.60, depending on your discounts.

Even if you factor in the machine cost, and assuming that you only use it for a year, cost of Keurig is about $100/365 days, per day depreciation works out to be about $0.27.

So, per cup of coffee would cost you no more than $1.00. And, later part of this year, when Starbucks start offering their coffee in k-cups, you would get to drink what you are paying for in the cafe.

Although, the cost is only 30% of what it would cost in cafe, and even if you can drink the same thing at home, the sales of cafe is unlikely to dwindle.

It is the experience or a habit we have that once on it, it is difficult to shake off.

Can you imagine not clutching a cup of coffee on the subway to work. Or, not going to the cafe round the corner for a coffee break?

Or, what about a day off and relaxation in the cafe and flipping a book.

Cafe offers much more than a coffee and the experience is what consumers is looking forward to.

My $0.02.

If you are a cafe owner, take note of two things and your coffee sales should do very well.

1. Ensure that your interior is well done up so that the experience for the walk in customer is good.

2. Put in place a loyalty program so that customers that buys from you frequently can enjoy lower pricing and thus buy even more frequently from you

3. Give back to the community off and on, in the form of free sandwich, free coffee, even some free candy bars.

In the end, wherever you are based, you want to be part of the community, you want to be part of the daily lives of the folks there.

In my opinion, cafe coffee is not really that expensive, in fact if you consider the effort in making it, the set up cost, the variables just to deliver that experience to you -it is quite reasonable.

Comments for If it is so expensive -why do you still drink it?

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by: Anonymous

For myself the quality of coffee and its preparation is something that is hard to match outside the speciality coffee/cafe scene. When you look at coffee that has more flavor profiles then wine I believe you can argue coffee is a modern delicacy, especially when you get into roasting styles and the origin from which the bean was grown from. Plus you pay for the experience.

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by: Chee Leng (oncoffeemakers)

Hi Mycoffeepro,

It depends on the currency and also the place where you come from. In my area, it is about $3.00 for a drip coffee.

While, there is definitely some difference, I would say a drip coffee from a cafe is not that different from one that you are going to have it at home.

Somewhere later this year, Keurig is going to offer Starbucks coffee in k-cups. Everything is pre-measured. That means consistent quality coffee with every brew, I believe they would try to make the experience as close to Starbucks as possible.

In fact, I think it might even be better! In my area, Starbucks are mostly staff by part-timers, and the coffee is not consistent and the quality differs.

And of course, you pay much more in Starbucks compared to a Starbucks k-cups you are going to make at home.

That is my justification. But, I still think people would go to cafe, and experience is the key rather than the coffee.

As I said, that is really my $0.02 (but the facts which is there is correct).

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wrong presumptions
by: MyCoffeePro

You have your pricing wrong for a Cafe's price of "drip" coffee which I believe is what you're referring to in the rest of the article.

Drip coffees range from .95 cents to 2.25 max from the coffee shops I frequent. Now different brewing methods cost higher, but you're also paying for the brewing method and labor involved in making the coffee in that method (like French Press).

Specialty drinks (capps, lattes, mochas, etc) cost considerably more, but that's because of the art and ingredients involved in making them.

In short, the comparison your making in price points, Cafe drip coffee versus Keurig pod coffee, are not for the same drink at all.

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