Why coffee is worth so much more than the cost of it's ingredients

We seem to be at that time in the news cycle where media agencies scare us with headlines claiming an $8.00 coffee.

?As the CEO of a speciality coffee company, I find myself caught in the predictable cross hairs of opinion. Café owners are telling me they are scared to put price up and risk losing customers which will send them broke, and consumers are telling me it’s ridiculous that their daily ritual costs so much and that coffee made at home is just as good.

?Never has the cost of inaction been so high and without a structural change to café financials, the industry hovers unsustainably in a hand to mouth survival cycle, where trading down quality seems the only viable option. And that for me is the true definition of a race to the bottom.

?So, I stepped back for a moment and reflected on just how we as an industry in Australia and New Zealand (the founding fathers of the specialty coffee movement and the home of a world leading café culture) found ourselves in a place where café owners are going broke because they fear customers won’t pay more for better?

?Before we get to the why, lets rule out the what, cost inflation. It seems to be uncontroversial that the cost of green beans, the exchange rate, freight costs, rent, wages, electricity & insurance have all gone through the roof.

?By simply applying a cost-plus business logic, it stands to reason that a cup of specialty coffee, a product that is hand-picked from a farm, hand roasted by a trained professional, hand brewed by a trained barista and served fresh by a small business owner who likely work up at 5am to have their store ready for your commute to work should absolutely cost more today than it did 5yrs ago.

?So why is the price of a $6 latte so emotive when that same consumer often doesn’t blink an eye when paying $5 for a bottle of filtered tap water that sits on the shelf, made 12 months ago by a large multinational in an overseas factory.

?My 2c worth, as a coffee industry it’s our own fault. For years we spent so much time talking factually about the cost of ingredients (why one coffee is scientifically more special and more expensive than another), that we have trained consumers to see coffee as a commodity not an experience.

?We have forgotten to engage our customers with a much more important dialogue, the emotion of how a coffee makes you feel, the act of service in bringing a beverage freshly made to you and what I’ve come to realise even more acutely, just how integral a thriving independent café culture is to the fabric of our community.

At Coffee Supreme, we are driven by a social purpose. We aspire to “enhance people’s lives by cultivating greater connection, collaboration and creativity”.

?We will always put the kettle on because we believe in the power of coffee to bring people together to create real belonging and connection.

?Of course, this purpose is underpinned by an uncompromised quality and Supreme standards around sourcing, roasting and training, but we recognise the message can only be magnified by our wonderful café partners who share that experience day in and day out with their customers.

?What is a price of a cup of coffee worth? I could give you a number, but I believe the answer lies in whatever it takes for that business owner to financially sustain that essential part of our community, and I’m very confident it’s a fair bit more that we are paying today.

?So please ask yourself, what does my local café mean to me and what am I willing to pay to protect it. It’s in your hands …

?Do you agree?