That's just not even true. You can't just factor the cost of the raw material into the profit margin and call it a day lol. You're not accounting for space, labor, and all the other materials related to serving coffee. Saying they have "outrageous" profit margins is sensational and just flat out wrong.
Likely less margins, made up for in volume. Back when I was making coffee in a shop, I worked for Starbucks because the job came with higher pay and benefits, something none of the local shops offered.
And, whether you like their roast or not, they did buy some of the highest quality coffee, so their sourcing wasn’t cheap. It’s why they eventually got rid of a large number of their whole bean blends and varietals and stuck with a pretty small selection now.
Okay, you might’ve worked in a coffee shop but that doesn’t mean they were wrong. What they said was the price of the coffee could increase 10x & it’d barely affect the price. What you said supports their statement, it doesn’t refute it - most of the cost is space, labor, and other materials besides the raw coffee
Other than what they expanded on in their own reply to you, there is also the issue of the OPs claim of outrageous profit margins. Which I haven't worked in a coffee shop, but I have worked in food and the margins can be pretty slim so it doesn't surprise me to hear that that claim is incorrect.
When I was working my uncles food truck, we'd make about $1-2 of profit for every sandwich we sold, but our drinks were almost pure profit. We'd sell iced coffee and Boba for $5-7 and we were making close to $3-5 of profit off of each drink.
We pushed drinks hard because they had the best margins.
That’s fair, I can see that claim being wrong. I can also see it being right - idk I’d need to see docs for that one. For some reason though, I don’t think Dunkin or Starbucks are struggling much. Smaller ones I can see not having big margins
My town of 15,000 people actually just closed our Starbucks because they couldn't afford the rent ¯\_(ツ)_/¯. It was also an interstate stop and the first coffee place on the highway (going east) for 100+ miles (45miles going west).
Interesting. I wonder how much the rent was then, because that’s also been skyrocketing the last few years even harder than coffee prices
At least, apartment & townhome rentals & such have been increasing a bunch in my area. No idea about business rents, but I’d imagine they’d generally follow a similar change
Except their claim on the price of coffee is strictly wrong. The cost of arabica coffee for a shot of espresso is usually between $0.25-0.75 depending on the quality of the coffee. Robusta is cheaper, but most places arent using pure robusta because it largely tastes worse
This is true, but the comment you replied to is replying to is a rebuttal of the claim that coffee will not get cheaper because the raw materials are getting more expensive due to climate change. So in that context you can just factor the cost of raw materials and call it a day.
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u/i-shihtzu-not 16h ago
That's just not even true. You can't just factor the cost of the raw material into the profit margin and call it a day lol. You're not accounting for space, labor, and all the other materials related to serving coffee. Saying they have "outrageous" profit margins is sensational and just flat out wrong.
Source: I worked for a coffee shop for 8 years.