Sunday, January 18, 2015

Coffee Economics

We usually don't think about this as we drink our coffee, or sip or latte, but what is the real cost of that drink? Yes, you just paid between $2.00-$5.00 for your beverage, but you know that is not the true price of the drink. After reading a few articles and surveys on this, here are some costs, based on the averages of what I found:

Drink          What You Pay          What it Cost          Profit

Latte               $3.35                         $0.77                $2.58

Drip Coffee    $1.90                         $0.56                $1.34

Vanilla Latte  $3.75                          $1.02               $2.73


If you buy a bag of whole bean coffee(or ground, but I would rather you grind your own), you generally pay between $10-$18 a bag(note that is not per pound - not all companies sell coffee by the pound). The coffee roaster/company buys their coffee at wholesale, so they may pay between $7.50-$10 per pound(average).

For the record, I tend to drink more coffee that I purchase and brew at home, than going to a coffee house. The reason being it will be far cheaper for me to make my own coffee than to go to a local Starbucks. Depending on the coffee I buy, my cost per cup is in the $0.30. That's a great savings over going to the local coffee house a few times a day. Attention K-Cup lovers - your cup of coffee costs about $0.60-$0.70 per cup(not saving much there). If you drink a traditional grocery store canned coffee, your costs are even lower.

Now, let me be clear, I am NOT saying we all need to brew coffee at home and stay away from the coffee house. No no no..... I bring this up, because I think it helps coffee lovers understand what they are paying for.

Coffee companies have a lot of overhead. Rent, payroll, marketing, utilities, all the things that go into a business all cost money. My suggestion is if you are trying to save money, brewing at home is a good option. Otherwise, do what some people I know do, create a coffee budget and stick to it.

I've had friends tell me they think I spend a lot on good coffee, but in reality, that money is a savings over what I would spend if I went out every day.

Something to think about.

Charlie





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