Does coffee have to be expensive to be great?  Why does the price, of one roaster’s coffee vary, from that of another roaster’s, for the exact same coffee?  My coffee loving friends, and I, have debated these questions over many a cup of expensive and inexpensive coffee.  I have had expensive coffee, that was absolutely terrible, inexpensive coffee, that made me want to weep, because it was so flavorful, and vice-versa.

Why does one roaster sell a pound of coffee, for $12, and another roaster sells the exact same coffee for $16?   Is it due to the initial market price for green coffee, exceptional coffee quality, company overhead, or just that some roasters take a "What the market will bear attitude" to selling their product?

Many of us know, by now, that green coffee prices have increased over the past several months.  This directly affects which beans roasters are buying, roasting, and at what price they will ultimately sell their finished product.  Of course, many other things factor into what the final price of the coffee will eventually be sold for. The world’s supply, and demand for coffee, being one of them. The fact that, a large roaster, buys coffee in greater quantities, thus, receiving better pricing on their purchases of unroasted, green, beans.  Smaller roasters, who cannot afford to buy thousands of pounds, at a time, have to pay more for their green beans initially. Company overhead (i.e.) equipment, payroll, utilities, shipping costs, etc. all factor into what the final price will be as well.  Obviously, the quality of the coffee that was grown affects price.  Was it tended to properly in the fields?  Was it picked at the peak of ripeness?  Was it processed, packaged and shipped properly?  Are the beans being sold in full pound quantity or in a smaller quantity just to make it “appear” more affordable?  Is the coffee “blended” with a lesser grade coffee, to make it more affordable, while sacrificing flavor and quality?  Lastly, profit margin, as determined by each individual roaster, plays a major role in what you, the consumer, will eventually pay.  Is the coffee fairly priced or are some companies just being greedy?

With all this in mind, does coffee have to be expensive to be great?  I say, no, not overall.  A few coffees are very expensive, and rightly so.  Many times though, such as with Kona, and Jamaican Blue Mountain, companies go overboard with their pricing, or blend it, to make it appear that you are getting more, for your money, than you really are.  Yet, there are many treasures, out there in the vast world, of retail coffee, staring us right in the face.  Simply do a little research.  Go to various web sites that rate coffee.  One of my favorites is Coffee Review.  Look at what professionals, aficionados, regular "Joes", and your own friends, and family, are saying about the coffee market, origin, roaster, and each individual coffee.  Then, make an informed decision as to what will give you the most for your hard earned dollars.

Sure, what you eventually purchase will depend on what you can afford, but that is up to each individual person.  People are always telling me “You get what you pay for”.  But I believe that, often times, you can get far more for what you are willing to pay.  There are truly great coffees, on the market, at affordable prices.  Knowing your particular tastes, understanding what it takes to bring coffee beans, from the farm to your cup, and doing some simple research will help you to find them. 

 

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Comments

Submitted by EricBNC on
<br>Sure, some really good coffee is going to cost more because the roaster paid more when purchasing directly from the grower to secure a particularly good bean. The coffee that comes from the same place but is sold by several roasters is a different situation. If I like the roasting style from a supplier (I like Klatch, and the coffee from them is light roasted and on the higher side price wise) then that is where I buy it. If it is the same bean but from different roasters, usually the price is very close - if not then watch out for the hype tax. I tried the Ethiopia Michicha Natural Sun Dried from PT's (back when you could buy it through ROASTe) and Counter Culture. I came down to the roaster's style more than anything else. Neither took it very dark since this single origin had a unique taste. Both were great and both were priced very close, as it should be.

Submitted by donnedonne on
Of course not. Most of the beans I like are in the $1/ounce range, which I wouldn't call expensive in the coffee world. Dialing in a certain bean is time-consuming and no doubt many pounds are more or less sacrificed for the sake of bean-specific knowledge. When I buy a bag I'm paying overhead and I'm also paying for time. The roaster's and mine. Works for both of us.

Submitted by Rick Applegate (not verified) on
Great article. A couple of points that I believe are salient. I believe that...local is better. But can someone tell me why local products are often more expensive than non local products? We have become so marketing savvy that local products and brands are designed to extract maximum profitability. We create local brands that exude excellence and we are taught that by pricing them lower with our competitors that we might commodify our brand. But shouldn't a local product cost less to distribute? Shouldn't the value added proposal of a local product be that the customer receives a fresher, high quality, local product at a price point better than a non local product? At Mt. Hood Roasters we continue to sell a pound of coffee retail and internet at $10/pound. We don't believe that it damages our brand and we fiercly believe that we must price our product to be a "locals choice" both in terms of quality, freshness and cost. If we deliver all 3 components (quality, freshness and competitive pricing) we always see our sales grow. The other interesting "cost" discussion focuses on the business models of the current roasters. This isn't the first time the world has seen coffee commodity prices where they are right now. What makes this different about the last time is that the prices very well might stay significantly higher than where they were last year. What we may be seeing is that some of the mid to larger specialty coffee roasters are going to have to change their business models to survive. Their overhead is just too high and they are not diversified enough to pull through this without raising thier prices so high that they will surely lose market share making thier financial problems only worse. Most of these companies have not had to purchase coffee at the prices some of the smaller roasters have learned to deal with over the past year. Larger companies locked in contracts they thought were high last year but in hind sight were sweetheart deals. Now, they are dealing with the reality that the cost of finishing a pound of coffee is going to cost them much more in 2011. I fear that some of them are already trying to cut corners by purchasing coffees and grades of coffee that they would have never considered before in an attempt to lower costs. They will have to significantly raise prices in 2011 if the commodity market doesn't lower in the very near future. We had 4 walk in's last week by coffee shop owners looking to change from their current vendors. Most of them cited cost as one concern but a couple of them cited the drop in quality from their vendor as equally frustrating. One owner stated that they have to send back at least one 5# bag every other week because it is just not very good (their coffee company was a large NW roaster). I had rarely heard anything like this in the last 10 years but it is becoming more common. Of course, small roasters (under 20,000 pounds) are probably at the biggest risk. Large roasters have the experience and probably the resources to grow through this current problem set. However, small roasters may have no other choice but to price themselves out of the market. If their only option is to raise prices to survive...they are in serious trouble. I think the smaller roasters that have achieved a reasonably significant distribution (40,000 pound, or more) are in a very good position. They do not have the overhead and can grow their companies to better fit tomorrow's marketplace. They can absorb the price increases better and will have numerous opportunities to expand their marketshare in 2011. Finally, they are in a better place to diversify to protect their long term goals.

I have a local brand that is good, not great, but good and they do a lot of business because they sell a pound of coffee at about 10-12 dollar mark, which is better than other roasters 12-15 mark at 12 ozs. I will continue to use them for this reason.

Coffee doesn't have to be more expensive to prove that they're good. Often than not, they're not. Also, I find it intriguing that some of the famous roasters are selling their coffee for almost $16-18 per pound, which is pretty high in my experience. This is probably because they have a good 'branding' and to deter too much demand on them.

Does Coffee Have To Be Expensive To Be Great?

| by

Does coffee have to be expensive to be great?  Why does the price, of one roaster’s coffee vary, from that of another roaster’s, for the exact same coffee?  My coffee loving friends, and I, have debated these questions over many a cup of expensive and inexpensive coffee.  I have had expensive coffee, that was absolutely terrible, inexpensive coffee, that made me want to weep, because it was so flavorful, and vice-versa.

Why does one roaster sell a pound of coffee, for $12, and another roaster sells the exact same coffee for $16?   Is it due to the initial market price for green coffee, exceptional coffee quality, company overhead, or just that some roasters take a "What the market will bear attitude" to selling their product?

Many of us know, by now, that green coffee prices have increased over the past several months.  This directly affects which beans roasters are buying, roasting, and at what price they will ultimately sell their finished product.  Of course, many other things factor into what the final price of the coffee will eventually be sold for. The world’s supply, and demand for coffee, being one of them. The fact that, a large roaster, buys coffee in greater quantities, thus, receiving better pricing on their purchases of unroasted, green, beans.  Smaller roasters, who cannot afford to buy thousands of pounds, at a time, have to pay more for their green beans initially. Company overhead (i.e.) equipment, payroll, utilities, shipping costs, etc. all factor into what the final price will be as well.  Obviously, the quality of the coffee that was grown affects price.  Was it tended to properly in the fields?  Was it picked at the peak of ripeness?  Was it processed, packaged and shipped properly?  Are the beans being sold in full pound quantity or in a smaller quantity just to make it “appear” more affordable?  Is the coffee “blended” with a lesser grade coffee, to make it more affordable, while sacrificing flavor and quality?  Lastly, profit margin, as determined by each individual roaster, plays a major role in what you, the consumer, will eventually pay.  Is the coffee fairly priced or are some companies just being greedy?

With all this in mind, does coffee have to be expensive to be great?  I say, no, not overall.  A few coffees are very expensive, and rightly so.  Many times though, such as with Kona, and Jamaican Blue Mountain, companies go overboard with their pricing, or blend it, to make it appear that you are getting more, for your money, than you really are.  Yet, there are many treasures, out there in the vast world, of retail coffee, staring us right in the face.  Simply do a little research.  Go to various web sites that rate coffee.  One of my favorites is Coffee Review.  Look at what professionals, aficionados, regular "Joes", and your own friends, and family, are saying about the coffee market, origin, roaster, and each individual coffee.  Then, make an informed decision as to what will give you the most for your hard earned dollars.

Sure, what you eventually purchase will depend on what you can afford, but that is up to each individual person.  People are always telling me “You get what you pay for”.  But I believe that, often times, you can get far more for what you are willing to pay.  There are truly great coffees, on the market, at affordable prices.  Knowing your particular tastes, understanding what it takes to bring coffee beans, from the farm to your cup, and doing some simple research will help you to find them. 

 

Category: BLOG

Right

November 16, 2011 | by samuellaw178

Coffee doesn't have to be more expensive to prove that they're good. Often than not, they're not. Also, I find it intriguing that some of the famous roasters are selling their coffee for almost $16-18 per pound, which is pretty high in my experience. This is probably because they have a good 'branding' and to deter too much demand on them.

I have a local brand that is

November 16, 2011 | by intrepid510

I have a local brand that is good, not great, but good and they do a lot of business because they sell a pound of coffee at about 10-12 dollar mark, which is better than other roasters 12-15 mark at 12 ozs. I will continue to use them for this reason.

no it doesn't

November 6, 2011 | by wakeknot

there is lots of great coffee out there that is not too expensive.

Coffee Doesn't Have to Be Expensive

November 28, 2010 | by Rick Applegate

Great article. A couple of points that I believe are salient. I believe that...local is better. But can someone tell me why local products are often more expensive than non local products? We have become so marketing savvy that local products and brands are designed to extract maximum profitability. We create local brands that exude excellence and we are taught that by pricing them lower with our competitors that we might commodify our brand. But shouldn't a local product cost less to distribute? Shouldn't the value added proposal of a local product be that the customer receives a fresher, high quality, local product at a price point better than a non local product? At Mt. Hood Roasters we continue to sell a pound of coffee retail and internet at $10/pound. We don't believe that it damages our brand and we fiercly believe that we must price our product to be a "locals choice" both in terms of quality, freshness and cost. If we deliver all 3 components (quality, freshness and competitive pricing) we always see our sales grow. The other interesting "cost" discussion focuses on the business models of the current roasters. This isn't the first time the world has seen coffee commodity prices where they are right now. What makes this different about the last time is that the prices very well might stay significantly higher than where they were last year. What we may be seeing is that some of the mid to larger specialty coffee roasters are going to have to change their business models to survive. Their overhead is just too high and they are not diversified enough to pull through this without raising thier prices so high that they will surely lose market share making thier financial problems only worse. Most of these companies have not had to purchase coffee at the prices some of the smaller roasters have learned to deal with over the past year. Larger companies locked in contracts they thought were high last year but in hind sight were sweetheart deals. Now, they are dealing with the reality that the cost of finishing a pound of coffee is going to cost them much more in 2011. I fear that some of them are already trying to cut corners by purchasing coffees and grades of coffee that they would have never considered before in an attempt to lower costs. They will have to significantly raise prices in 2011 if the commodity market doesn't lower in the very near future. We had 4 walk in's last week by coffee shop owners looking to change from their current vendors. Most of them cited cost as one concern but a couple of them cited the drop in quality from their vendor as equally frustrating. One owner stated that they have to send back at least one 5# bag every other week because it is just not very good (their coffee company was a large NW roaster). I had rarely heard anything like this in the last 10 years but it is becoming more common. Of course, small roasters (under 20,000 pounds) are probably at the biggest risk. Large roasters have the experience and probably the resources to grow through this current problem set. However, small roasters may have no other choice but to price themselves out of the market. If their only option is to raise prices to survive...they are in serious trouble. I think the smaller roasters that have achieved a reasonably significant distribution (40,000 pound, or more) are in a very good position. They do not have the overhead and can grow their companies to better fit tomorrow's marketplace. They can absorb the price increases better and will have numerous opportunities to expand their marketshare in 2011. Finally, they are in a better place to diversify to protect their long term goals.

Of course not

November 27, 2010 | by donnedonne

Of course not. Most of the beans I like are in the $1/ounce range, which I wouldn't call expensive in the coffee world. Dialing in a certain bean is time-consuming and no doubt many pounds are more or less sacrificed for the sake of bean-specific knowledge. When I buy a bag I'm paying overhead and I'm also paying for time. The roaster's and mine. Works for both of us.

I do not think coffee has to be expensive to be great either.

November 27, 2010 | by EricBNC


Sure, some really good coffee is going to cost more because the roaster paid more when purchasing directly from the grower to secure a particularly good bean. The coffee that comes from the same place but is sold by several roasters is a different situation. If I like the roasting style from a supplier (I like Klatch, and the coffee from them is light roasted and on the higher side price wise) then that is where I buy it. If it is the same bean but from different roasters, usually the price is very close - if not then watch out for the hype tax. I tried the Ethiopia Michicha Natural Sun Dried from PT's (back when you could buy it through ROASTe) and Counter Culture. I came down to the roaster's style more than anything else. Neither took it very dark since this single origin had a unique taste. Both were great and both were priced very close, as it should be.

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