Price rises fragment coffee industry - ABC Bisiness

beanflying

Interesting program segment on the rise of coffee prices.  Also talks about direct sourcing a little. Worth a watch.

Also proves yet again why Choice doesn't know coffee  ::) "INGRID JUST, SPOKESPERON, CHOICE: A shot of coffee, the actual ingredient probably costs cafes around 20 to 25 cents, depending upon the beans. And the milk, around 100 mls, about 10 cents. So, 30-35 cents, is the actual cost of the ingredients."

Press the Play Video button toward the top of the page http://www.abc.net.au/insidebusiness/content/2011/s3276518.htm

Koffee_Kosmo

The cost of ingredients may well be true depending on the model used But as we all know the cost to make it is much much more Ask her if the cost of a home is for example 100K then after 20 years of paying it off costs 300K Then you sell it for 350K what is your profit 250K or 50K Before you answer add the tax & any repair's to that and see it shrink KK

askthecoffeeguy

margins are definitely tight all round and consumer confidence is way down - if anything customers are becoming more discerning how they spend their money personally as a relatively new operator (at my current location at least - I've owned cafes for the past ten years and managed cafes and bars previously for longer than that), I'm noticing a slow but steady increase in coffee sales, driven in part I believe by having an owner / operator manning the machine, and by having a strong dedication to consistency and to quality control with cafes charging $4 or more (say for a double shot soy latte), then the consumer has every right to be discerning, and understandably they will look elsewhere if the product is not of a consistently excellent standard - and it is here that savvy operators can potentially prosper I for one cant compete on price, and I know that for some customers, that's the main determining factor in making a purchase, as the cost of the raw materials that we use, combined with the way we make coffee, is way too high.  so i know that we've lost some potential customers to other establishments that charge less for their product but I would hope that we've more than made up for that by having a strong loyal base of regular customers, some of whom travel from far afield for their coffee, many of whom will consume two or three coffees at a single seating so yes, prices increases and low consumer confidence are hurting the industry, but this can also prove to be a blessing in disguise for those who are willing to put quality first, and who are not trying to compete on price alone p

RichardM

on 1311646512:

with cafes charging $4 or more (say for a double shot soy latte), then the consumer has every right to be discerning, and understandably they will look elsewhere if the product is not of a consistently excellent standard - and it is here that savvy operators can potentially prosper

Or, in regional areas (such as where I live) you can pay $5.50 for a double shot long black!