The bitter news of the increase in the price of the cup of coffee has now become established, and this has struck a chord in the hearts of many Italians.
But let’s try to understand why the increase is happening: is there a search for more profit or are there much broader and more concrete reasons behind it?
Is it due to the general increase in costs on each raw material, or are there other reasons as well?
The hidden costs behind the cup
What we are normally led to think is that coffee is a sip of flavored water, a little pill consumed in a few seconds that recharges our batteries, or again, such an important cultural gesture now regarded as an untouchable right.
But we never reflect on what is behind that “simple” cup of coffee.
So here are the hidden costs behind running a coffee shop:
- Payment of the professional bartender’s contract, which accounts for almost 50% of the price;
- Rent and utilities;
- The purchase and maintenance of equipment, first and foremost the professional machine, grinder and purifier;
- The complementary consumables, such as sugar packet, napkin and so on.
After that we must remember the profit margin of the grower, the plantation owner, the broker, the importer, the transporter, the roaster, the distributor, and finally the bartender.
When we think that all of this until a very few months ago was satisfied with only 1 euro it has the unbelievable!
Now I already know what you must be thinking, “so he raised the price to make more money,”but the answer is “NO!”
The motivation lies in the rising costs of all raw materials, as we have already experienced in the home or at the supermarket.
By raw materials, I mean not only the mere cost of raw coffee, but also the double-digit increase in the packaging used, namely plastic, aluminum (now almost unobtainable), cardboard and tinplate. What’s more, increases in energy carriers, namely electricity and gas, of fuels, which are critical to the distribution of the product.
The cup and saucer itself increased by 20%, the sugar packet by 30%, the milk by +60%, and the cocoa sprinkle on the cappuccino by +20%.
In this sense, we must try to make a mental effort and understand that that 0.10 cent increase will allow the entire supply chain and our dear bartender to survive and certainly not to make more money. We have to go beyond appearances and beyond what we have always thought, which is that “coffee has to cost 1€ and I don’t want to hear any stories!”… We try to understand that coffee is never simple and mundane and that it is an exceptional raw material that travels around the entire globe for months on end.
All this must be priced fairly, and it is by no means certain that 10 cents more will be enough.
I had already talked about this in a video posted on our various social channels:
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Why has the cost of raw coffee increased?
There are two factors:
- Environmental risks;
- Cost and logistics of transportation.
As we all know, the climate crisis is affecting every aspect of our lives and planet earth. Consequently, it also influenced coffee cultivation.
In fact, there was an initial dry spell and then intense frosts in Brazil, the world’s largest coffee producer.
Compared to 2020, farmers harvested nearly 40 percent less.
Excessive moisture then also damaged crops in Colombia, the world’s second-largest producer.
So the less raw material available, the more it costs.
Adding to the adverse weather is the logistics of transportation: ports have been congested, hundreds and hundreds of container ships have been stranded for months outside ports, with no possibility of docking. And the ones that left were so few that they would play catch-up for their loading-that is, even if you had already reserved your place for your goods, only the highest bidder’s product was loaded, causing their costs to fly through the roof.
To be concrete and practical a container a year ago cost 3 thousand euros, now it costs as much as 12 thousand.
Analyzing all these factors almost begs the question: how is it possible then that the cup is only increased by 0.10 cents?
Because, although it may not seem like it, in order not to burden consumers’ pockets too much, most of the increases have been absorbed by growers, importers and roasters.
Finally, I would like to draw attention to another aspect: quality.
An espresso coffee consumed in St. Mark’s Square in Venice, priced at €10.00 is not justified for the quality or these increases just mentioned, in this case you pay for the difficulty of transportation by couriers, the incredible location and the rent.
Indeed, one cannot compare the operating costs of a bar in St. Mark’s Square or downtown Milan with a small bar in the province.
Other times, however, the cost is not justified by the strategic location, but by the quality!
If, on the other hand, the coffee offered has certifications that determine quality, harvesting methods, processing methods, control over the sustainability of the entire supply chain; if it is roasted only by professionals who are aware of what they know how to do and so on, why not pay even €2.00 for it?
We find coffees on the market that do not even have the composition of the blend indicated on the label and others that even tell you the precise plantation of origin, the botanical variety, and so on.
There are baristas who do not even know the brand name of the coffee they buy-try asking at the bar next time and see for yourself-and others who know their product better than anyone else, have invested in their training, and have great communication skills.
You pay for quality!
We have already accepted it in everything: we understand the price difference from a large-scale manufactured bag rather than a designer one, and the difference between a frozen brioche and a fresh bakery one. We are aware that in the supermarket we can find packages of pasta that are more or less good, and so on for everything around us.
But we can’t accept it for coffee!
We know that if we want to be cheap, a bottle of wine for a few euros is enough, but if we want to make a good impression at a friend’s house for a dinner party, it takes at least €10.00 and we check the label and the winery of production.
The coffee is identical!
We are really convinced that coffee cannot be different, that one is as good as the other, and that it is a small thing…but it is not!
I hope that with this article it is now all a little clearer on the issue of the increases and that you succeed and understand the reasons for them.