Frankly Speaking: How much would you pay for a cup of coffee?
What is it that convinces customers to part with $6.20 on a coffee each day? As with anything, the cost has to be justified to get that tap of the bank card.
This morning I paid $6.20 for my regular coffee — an oat milk latte with one sugar — at one of my favourite Melbourne cafes.
I couldn’t help but wonder where my tolerance for coffee prices sits. Would I still tap at $6.50? $7.00? $7.50 a cup? Forget avocado toast, maybe it’s the daily caffeine fix that’s going to be what’s keeping millennials from a house deposit.
As prices for everyday items go up, they rarely come back down again. We’re in a whole new era of pricing and I’m working out how I feel about it.
Opening a cafe at the tail end of a pandemic, with rising inflation and skyrocketing costs of goods doesn’t help me sleep well at night. But if my ongoing experience in the challenging retail space is anything to go by, it’s that the general public will hold tightly onto their coffee.
It’s the routine, the “little treat” that so many people need to get through the day. They’ll cut back on dinners out and new homewares, but coffees made by a beloved barista are probably one of the last items to go in a money-saving life overhaul.
So what is it that convinces customers to part with $6.20 on a coffee each day? As with anything, the cost has to be justified to get that tap of the bank card.
I’ve spent the last few months meeting with coffee roasters, learning about extraction, tamping, dialing-in and brew ratios. I’m finding the more I learn about coffee, the greater my appreciation for coffee creatives and what goes into every cup.
On some level, it seems like the skill that goes into a great coffee is vastly underappreciated, unless you’re in the know. The stereotype is that pulling coffees is a casual, in-between job, something you do on the side while pursuing study or your “actual” career. Anyone can do it, right?
However, in any other industry, operating such heavy machinery, mathematically tweaking its system depending on climatic changes to craft a consistent output would be looked upon as a “real” trade, one that was respected and valued as a career in its own right.
The value of a cup of coffee isn’t just in the ingredients. Just like you don’t pay a plumber or electrician for the time they are physically working in your house — you pay them for their years of experience and knowledge.
So, you go into your favourite coffee shop to get your daily brew. What goes into that cup? It’s coffee, maybe milk, maybe sugar. But it’s also the years of practice and work of the barista. It’s their wages. It’s the lights on overhead. It’s the heating that you wait beneath for the staff to call your name. It’s the very cup itself that your order gets poured into.
In a chat with a friend of mine who runs a coffee subscription service, he told me that in the cafe world, you don’t make money on coffee. That’s just what helps keep the wheels of the business turning — instead, it’s the food, booze, merch and take-home pantry items that help keep your favourite local spot alive.
We’re in the midst of finalising our initial offering to open Two Franks. If I crunch the numbers and $6.20 is what I have to charge for a cup of coffee, that’s what it will have to be to keep the business moving.
That might not be palatable or possible for every single customer, but on our side, all we can do is work our hardest to make sure it’s the best cup of coffee we can make, every single time.
Small business is always challenging, but these days we’re facing a real perfect storm of disasters. If your favourite local has bumped up their coffee prices, I can assure you it’s not coming out of a place of money grabbing — they need to do this to survive.
Chryssie Swarbrick is a writer, small-business-juggler and mum of two. She is currently documenting her adventures in opening a cafe, Two Franks, opposite her childhood home.
