Coffee Corner: This coffee is too expensive

Post by Grant Mouton

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As someone with almost a decade in the industry I can safely say that even your most expensive cup of coffee is, in fact, under-priced. For those of you who managed to attend the screening of “a Film about Coffee” at the Contemporary Art Platform in Shuwaikh last week, you might have noticed that this subject was briefly talked about.

So why is there this rift in thoughts? Why is it that coffee producers and coffee consumers disagree with the pricing of coffee? On the one hand we have the people in the coffee supply chain feeling short-changed and on the other the consumers feel that their cup of joe is costing far too much.

*Disclaimer: I am a part of the specialty coffee community, and you will see that the article is heavily in favor of this industry. I have however been as factual as possible, enjoy!*

First things first, we need to realize that there are three different types of coffee at three very different price points. It’s a concept we all know and understand with restaurants, but not with coffee. We can liken coffee stores to three different tiers of restaurants:

– Quick service restaurants (Global franchises; no trained chef) $

– Casual dining restaurants (More focus put on quality of ingredients, store aesthetics; entry level chef, mainly cooks) $$

– Fine dining (Utmost attention to details; traceable, high quality ingredients; well-trained chefs) $$$

To try and simplify, I will refer to the first two tiers as commodity coffee from hereon. So in coffee you have the same thing. The modern 3rd wave (or specialty) coffee can be thought of as “Fine dining coffee”. For this you pay a premium, but it is not just a greater mark up.

Labour
In commodity coffee the baristas are site trained according to the company’s standards and not recognized by the Specialty Coffee Association. Whereas in the 3rd wave stores, you will have at the very least one employee who has not only travelled the world to attend courses and seminars, but also constantly learns through online platforms to stay at the cutting edge of coffee knowledge – all to ensure a better coffee experience for you! Now one can certainly see that a more highly skilled barista bears a greater cost to company than an entry level barista.

Green Bean Sourcing
Just as quick service restaurants (QSR) constantly seek to drive the cost prices of the raw materials down, so too do commodity coffee shops. It is no secret that the giants in the industry use anywhere between 25-40% of Robusta coffee beans to make up their blends. But, so what if they use Robusta? Well it is a very cheap, low quality variety of coffee that has zero pleasurable flavor traits to it and is very bitter. I recently attended a course in Copenhagen where we trialled the use of the highest quality Robusta. During a blind tasting (I thought I was taste testing Arabica beans) I noted on my scoresheet that a particular bean was defective, i.e. not good enough to serve. Turns out said bean was in fact some high quality Robusta. This variety is more than likely the reason why the majority of people think of coffee as bitter. On top of that, the Arabica beans that commodity coffee shops do use is considered to be low grade, again it is cheap and has no desirable flavors. To put some numbers to it, Robusta retails for $1-$3/kg, whereas high quality, specialty Arabica coffee can retail anywhere between $25-$300/kg

These high prices are justified though. Specialty coffee is comprised of picked, sorted and processed coffee and is held to a much higher standard. Commodity coffee is grown on flat land and the process is almost fully mechanized. The reason that mechanization doesn’t work with coffee is because not all of the beans ripen at the same time and unripe coffee (unripe anything, really) simply does not taste as good.

Equipment
What if I told you that most commodity coffee chains don’t even have an espresso machine? Well, it’s the truth! Most of these commodity coffee giants have a “pseudo-espresso” machine which, again, is as automated as possible and yet they are serving you espresso based drinks! The reasons behind this are simple. Making a good espresso and steaming milk correctly is very difficult with incredibly small margins for error. I can assure you it will take months of practice just to learn to steam the milk correctly. Latte art? Forget about it! This is a craft that needs constant upkeep and at least a year behind a machine to become remotely good.

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Recipes
Commodity coffee shops will only use 6-8g of coffee when preparing a regular size coffee. In contrast, specialty coffee shops will use between 16-22g for the same size coffee. This is really important – specialty coffee uses at least double of an already more expensive raw material to prep your coffee, and yet we don’t charge twice or three times the price!

Economies of Scale
This is a pretty basic concept, but those who haven’t taken economics 101 it boils down to this: A company purchasing over 100,000 tonnes of coffee per year has much more leverage to negotiate prices than a company only buying 1-2 tonnes of coffee. This means that even if specialty coffee shops were to use the exact same low quality coffee beans as the larger coffee companies, the cost price would still be higher for those specialty stores.

When all things are considered, I hope you come to the same conclusion that I do, and that is: Specialty coffee is in fact under-priced, hence great value for money and commodity coffee actually has very high profit margins for a substandard product. The other thing you can consider is from a social responsibility point of view: Specialty coffee pays people in the supply chain, commodity coffee pays large corporations and favors mechanization; This in turn leads to higher rates of unemployment in developing areas (yes, I did just guilt trip you into buying specialty coffee!).

Keep sipping!

Post by Grant Mouton
Self–proclaimed coffee guru, coffee education addict, SCAA/SCAE accredited.
Brand manager at % Arabica.


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54 comments, add your own...


  1. Sami says:

    “highly skilled barista”…

    Are you telling me university degree was for nothing? And that I would have been more valuable to my employer as a barista?

    • Grant Mouton says:

      I’m not too sure of your point. I’m talking about the fact that baristas in certain coffee shops undergo extensive training to perfect their craft. This costs a lot and these baristas are in high demand which, in turn, drives labor costs up and ultimately the cup of your coffee.

      But it’s nots only the barista. (There’s more to coffee than you see, that’s the aim of these posts). You are also paying for the roaster and their equipment and training. You are paying the farm workers in Panama, Ethiopia etc.

      • Sami says:

        My point is, the high cost of a coffee cup in Kuwait translates into how much monthly salary for your baristas?

        Because maybe I should quit my day job and work as a barista in a coffee shop instead?

        • Mark says:

          ALL businesses be it a restaurant or a bank factor in the wages of the employees into the business. Paying higher wages for more qualified employees is also the norm like I’m sure you get paid more than your tea boy does.

          • Sami says:

            I would understand your argument, if you were talking about a coffee shop in Vienna for example, where workers are protected by labor unions and minimum wages, and where by the way, coffee is way more better tasting than anything served in Kuwait, while at the same time costing no more than 3 Euros.

            Now, are you telling me that a barsita in Vienna gets paid more than a barista in Kuwait which justifies the overpricing of a cup of coffee here? or is it a matter of greed by coffee business owners, because well, we Kuwaitis pay for anything that is thrown at us?

            • Mark says:

              Are you saying that because the employees are in Kuwait they should be paid a lot less? What operating costs are you also factoring in? The coffee shop in Vienna for example, where are they located? How much do they pay for rent? Are the employees full time or part time? Is it a franchise? Where are the coffee beans from? What machines do they use? Could you send over a copy of their financials so we can check that as well? Seriously what the fuck are you talking about?

              You gave an example of coffee costing 3 Euros in that random coffee shop. That’s 1KD. A latte in a speciality coffee shop in Kuwait costs KD1.350, I’m guessing an espresso is even less. So when you say Kuwaitis are being taken advantage of because of greed by coffee business owners, what are you basing that of?

              Why are you so angry? Please go away now and stop trolling. Seriously.

              • Mark says:

                Also just did a quick search, a latte at a popular coffee shop in Vienna costs 4.9 euro which is KD1.580 which is more expensive than Kuwait…

  2. Umair Shaikh says:

    After reading half of the article, i was just wondering what Mark is upto? he has just started liking Coffee and now he has started going to screenings of coffee, studying so much about it and talking such a deep shit. After scrolling further down i came to know that Mark is not the Author of this post…. Damn

    • Mark says:

      yeah I’m working on making it more obvious who the author of the post is with the next blog design update. A lot of people currently don’t notice the “Post by x” under the title

  3. Grant,

    Have you ever tried traditional Ethiopian coffee? Ethiopians are some of the first people in recorded history to drink coffee. The word “coffee” actually comes from the Ethiopian region of Kaffa.

    Italians, who tried in vain to colonize them, took coffee from them and capitalized on it.

    There’d be no espressos, macchiatos and cappuccinos without beautiful Ethopia.

  4. cajie says:

    It was just a coincidence that I was sipping on a Grande Latte from a famous commodity coffee shop when I opened this article.

    • Grant Mouton says:

      And how is that coffee treating you?

    • cajie says:

      lol. Well, I have a loyalty card and I get free stuff now and then.
      Speciality coffee shops is something new in Kuwait, but looking at comments from Mark, it looks like it may not be as expensive as I thought, so might be a good time to switch loyalty.

  5. k says:

    grant, where can i get a fucking bangin latte

    • Grant Mouton says:

      I’m going to say %Arabica for two reasons;
      Firstly, I work there.
      Secondly, the lattes are so go that despite my lactose intolerance I will have one a week. (To the dismay of my colleagues). This week you should try the Single Origin from Costa Rica as a latte. It will do your head in! Have it short, not tall.

      Of all the places in Kuwait, I’d have to say the next best latte would be at Boost in Shuwaikh.

      • k says:

        alright, i’ll try you guys out this weekend. just did some research and found out that %arabica has a couple chains worldwide. gonna be in hongkong in dec so i’ll make sure to swing by the branch there and sip on a latte when im really hungover or something.

        • Grant Mouton says:

          Yeah, we are originally a Japanese brand and you’ll see this is reflected not only in the decor, but also the attention to detail. Hope you enjoy the coffee!

  6. Eli says:

    Over-priced coffee place brand manager discussing how coffee is under-priced.

    A bit disingenuous.

    • Eli says:

      I’d believe it was under-priced in countries like Italy, where they highly value their local coffee shops yet prices are reasonable and the product is delicious. But not in Kuwait. Very few things are under-priced here, if at all.

      • Grant Mouton says:

        Hello Eli,

        (Let me start by saying that I wrote this article and comments in a personal capacity and it does not necessarily reflect the opinion of my employer)

        I wrote this article knowing someone would glance over the article and take me on on this point – hence the disclaimer that I am a part of the industry. First of all this conception that Viennese or Italian coffee is the best is unfounded. It’s like saying American cars are the best because Henry Ford was the first mass producer of cars. ( I can safely say it’s between the Germans and Swedes)

        Just because Italy invented the espresso does not mean they make good coffee. I’m talking about a different kind of coffee. Where passion flows throughout the supply chain.

        As someone who has lived in Italy and was actually taught to make coffee by an Italian I can assure you their modern coffee is not that good. Many Italians would agree.

        If you go to some of Europes best coffee shops (I.e. Coffee Collective, Copenhagen ; The Barn, Berlin etc) you will also see that your statement is horribly inaccurate with regards to the pricing.

        But don’t worry, I’m not asking you to pay the price for the passion. I’m asking for you to pay a fair price for a cup of coffee for the hundreds of people involved in hand picking beans during harvest, many elderly, who then carry a 60+kg bag of coffee kilometers to the processing plant. All this from a tree that takes 4 years to grow a commercially viable crop (hoping there wasn’t a drought in that period).

        After this it goes through more sets of hands who sort, package and deliver to export co-ops. And no, the don’t put it in the trunk of their car and drive there. They labour with it on their backs or on a bicycle.

        It’s then shipped to the roaster directly (in our case) to cut out the middle man and secure a better price for those labourers. We then roast it – a skill which takes years to perfect. After which we give you your cup of coffee in a nice shop, with a smile.

        *side note. Perhaps you need to also consider the costs of running a business in Kuwait. When rent is so horribly out of proportion for what you get, it does affect cost price.

        • Eli says:

          I’ll take your points regarding rent in Kuwait. As well as the quality of Italian coffee.

          Personally I don’t even like coffee, tbh. Though I am a fan of Arabic coffee.

          But when it comes to paying these laborers you mention, as with almost every business I highly doubt they get much compensation, they’re laborers after all and always underpaid though I’d love to be proven wrong. I imagine most of the profits go to management as per standard (though sometimes unfair) practice.

          The problem with Kuwait is that some people will always pay even when it’s not reasonable for them to do so, I mean we have folks taking out loans to go on vacation or buy luxury items…so we’re stuck with overpriced products in average, coupled with greedy landowners and here we are…

          • Eli says:

            Also take my words with a grain of salt as I’m unaware of your exact prices, i was speaking rather generally.

          • Grant Mouton says:

            I get what you are saying, Eli. But rest assured, %Arabica not only farms its own coffee but we also buy beans from a company called “NinetyPlus”. They not only ensure excellent quality coffee, but they practice direct trade and all farmers and the labourers benefit as a result. They have a movie coming out in 2017 to show the extent of the positive effect their business model has had on the coffee industry.

  7. Miss says:

    Personally, I am far happier to support a company who prides themselves on delivering a great product and am happy to pay extra for the transparency of their product. That, for me, is something worth paying for. In a world where it’s hard to succeed because big corporations are setting the benchmark for what is a fair price, but also have the greatest bargaining power in their respective industry, I am happy to not support this type of practice.

    Think about it this way:
    Commodity coffee – Lower cost per unit = Greater margin for mark-up (based on average industry pricing) = Greater sales (due to competitiveness) = Greater profits
    3rd Wave coffee – Greater cost per unit = Lower margin for mark-up (causing a smaller profit margin) = Fewer sales = Smaller profits

    Add the fact that I can aid that company in exploiting and exhausting everything in the industry just because I’d like to pay less… I hate that equation.

    I love my coffee and would rather pay extra for one great cup a day, than less for a cup that doesn’t rival my Nespresso machine.

    That’s just my two cents and how I see it. I am a passionate and considerate consumer, therefore these things matter a great deal to me. I feel the extra cost is justified due to this and if you have a different view, that’s absolutely fine. We all value different things and have different tastes.

    Thank you, Grant, for the insight.

  8. meh says:

    42 comments about coffee LOL

  9. Mohd says:

    A question for Grant,

    I’m a heavy coffee drinker, I used to buy my beans from starbucks and others like it but the beans are roasted more than five months ago, so I am now buying my beans from local raosters like “kings coffee, or Badawi coffee” they roast daily so it’s uber fresh, but they all come from india, Naibari, and no one really knows if they are Arabica or Robusto, so what are your thoughts on the fresh indian coffe in local kuwait roasters?

    • Grant Mouton says:

      Hello Mohd,

      India produces more than twice the amount of Robusta as Compared to Arabica. So it is more than likely Robusta (Does it taste good?)

      I haven’t had any Indian coffee whilst living in Kuwait. I have, however, in the past roasted Monsooned Basanally from India and it was exceptional! Tasted like a Snickers bar.

      At the end of the day, nothing beats freshness. I’ll try out the shops you mentioned and let you know the what beans they are!

      (You can also look at the shape of the bean – larger, more spherical beans are traits of Robusta. This method is not 100% accurate though)

      • Mohd says:

        Grant, thank you so much, I wasn’t expecting a reply, the taste is hit and miss, just yesterday I bought some from the international mill and it tastes amazing, last week it tasted SO bad that I just threw it away, I think as you’ve mentioned, and since even these shops themselves don’t know thier arabica from robusto, is that sometimes I get arabica by chance. But since it’s only 4 kd per kg, and it’s roasted the same day, I just take the chance.

        • Grant Mouton says:

          Absolute pleasure, Mohd! At 4KD/kg it’s going to be hit and miss. It’s likely robusta or low grade arabica. Could even be a blend!

  10. DeViL says:

    Good going Grant! Keep it up, your article is very informative.

  11. Noura says:

    As a coffee lover, these articles have been really interesting so far! Looking forward to the next one.


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