Saturday, September 26, 2009

rising coffee prices

There was an article in yesterday's Seattle Times about rising coffee prices and the retail effect. I thought it was interesting for a couple of reasons. First, it quoted Maria at Sweet Maria's:
"People who are interested in home roasting are not necessarily interested in the price," she said. "They're interested in having the best coffee they can have. People who are interested in price go to Costco and buy cheap coffee."
Second, it had a supposed price breakdown of the cost components of a $3 latte: $2.23 for the 300% markup, 32 cents for two shots of espresso, 20 cents for milk, 15 cents for cup, lid, sleeve, and stirrer, and 5 to 10 cents for rent, labor, and utilities.

That last number seems absurd. A single operator would have to produce between 85 and 171 of these an hour just to make Washington state's minimum wage, even if rent and utilities are ignored! When have you ever seen an espresso stand put a car through in 30 seconds, let alone do it all day? The busiest coffee shop I've ever seen is a Starbucks outside the Moscone Convention Center in the morning before an event starts, and I'm sure it doesn't come close to serving that many items per employee per hour. Hmm.

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