Specialty Coffee. Is It Still The Affordable Luxury?


Mar 03, 2008

For me the question of affordable luxury leads down a winding, scrambling, path of discussion around the word “luxury” itself. Like any conversation about coffee this discussion is also hopelessly mired in considerations of culture and society.  The United Nations defines the “forced isolation” of human beings as a form of torture, in certain cases.  Extended periods of isolation can lead to neurosis, resulting in severe mental illness or even death.  In contrast, traditional coffee rituals are social acts.  They bring people from a community or family together in often elaborate, though usually informal, ceremonies in which the beverage is prepared and shared according to prescribed methods, sometimes handed down through generations. This does not make coffee rituals an antidote to anything.  But it does make them a key part of healthy human behavior. In this context, the word luxury doesn’t seem to fit. The type of social ritual surrounding the preparation and enjoyment of coffee — and I would argue even when coffee is prepared and served in a commercial setting — is not really optional human behavior.  It is a fundamental requirement for living well. 

We work in an industry that believes with all its collective heart that our coffee offerings are immuned to the ravishes of economic downturns.  People will forgo lots of other things, like tickets to professional sporting events, or new cars, or even organic vegetables, before they will give up their indulgence of a daily vanilla latte.  


This is what we have believed anyway.  And remarkably this postulate seems to have held fast until recently.  Now there is some doubt.  This is mainly due to Starbucks‘ extremely well-reported decline in customer return visits and slowing growth as measured in same store sales.  Starbucks’ bad news makes some people wonder if coffee is truly the “affordable luxury” after all.  Will customers spring for coffee in the worst of times as they do in the best of times?


If you’re reading this blog you may have asked yourself already, how coffee, a beverage so central to our lives and to North American culture, could be considered a luxury any more than bread or automobiles?   How could something as versatile and useful as coffee, which plays a role, not just in specialty beverages, but in baking and now it would seem as a curative for skin cancer, be considered a luxury any more than post-it notes, paper towels, or laundry detergent?


I frequently spend $12-14 per pound for the coffee I like.  I share a lot of French pressed coffee with others, so I probably prepare more coffee than most people do.  Plus, the premium Ethiopians, Guatemalans, and Cup of Excellence coffees I prefer are twice as expensive as the typical whole bean coffees you find at grocery stores.  (But before you judge me for my profligacy, keep in mind that I spend far far more than this on locally brewed ales and eating out with friends–so my coffee habit is a virtue by comparison).  Anyway, even at comparatively high prices, I figure that a cup of coffee costs less than seventy-five cents a cup, when I make it myself.


This is peanuts considering I am drinking some of the world’s best coffee.  This is peanuts compared to the cost of a can of Diet Coke.  Remember that nine times out of ten, the coffees I am talking about are personally sourced in the tropics by local greenies.  In many cases, these are people I actually know.  If you live in this area you can meet and talk with them too–in person, I mean.  These dedicated souls fly off for months at a time to traipse through verdant high-altitude volcanic landscapes, visiting farms and co-ops, profile-roasting and cupping as they go. This is hard work, but it is also a lot of fun.   


(Recently Jason Prefontaine visited Nicaragua on such a trip.  His notes from this trip are in an earlier posting)   


The small lots of coffee they find are shipped back to be meticulously roasted by hand.  Within a week of roasting this coffee is sold through channels featuring tons of personalized service, where often surprising levels of insight into each selection are offered by a cheerful coffee maven or aficionado.  This kind of attention to detail is rare in any specialty food category–but in coffee it is the standard by which serious roasters are measured.  It is also really expensive to offer products and services this way.  My point is that even at the “premium” prices I pay, the beans I buy are the equivalent of getting bags full of Hope Diamonds for mere pennies.  Call this a luxury if you must–I call it a fantastic bargain. 


So if premium coffee is such a great deal what’s the worry?  Who could possibly forgo such a boon? 


As you may be saying to yourself already, my discussion assumes that I am preparing my own coffee.  I am not actually having someone prepare the coffee for me.  To buy a professionally prepared coffee outside the home, you would need to pay $2-3  for the cup of coffee I’m talking about here.  If it’s prepared on a Clover get ready to ante up $4-5 per cup.  Since most people buy milk-based beverages they are also spending up to $4 a drink, depending on size and complexity.   


This is all true, and I admit to the narrowness of my argument in this respect.  However, I also argue that most people don’t realize the full value of their professionally prepared coffee investment.   In particular, people who get a coffee to-go, and simply walk out of a cafe, give up their opportunity to lounge around with friends discussing everything under the sun in often sumptuous environments generously provided to them by their roaster or retailer. This opportunity is worth up to 40% of the total value of their drink, if you consider the expense incurred by the store owner to pay for the rent and build-out for these spaces.  I won’t even guess at the value of free WiFi.   


Languoring around a cafe sampling and enjoying cups of exotic coffee and rich espresso until the spirit takes hold may seem like sloth at first.  But it is the right thing to do, if tradition is your guide. Historically coffee was first embraced in the west as a mild stimulant to enhance conversation between friends and provide a catalyst for hatching new ideas among colleagues and co-conspirators.  However, coffee’s role as the commuter’s little helper along with the rise of the Solo Traveler cup and sip lid is a more recent and less savory development. (Even the name of the best selling disposable hot cup, the Solo Traveler, suggests the alienation of the individual commuting down a congested freeway en route to a windowless cubicle–solo does mean alone).   Often time, coffee for the commute is all about the chemical, the coffee junk.  All in all coffee like this can be a lonely affair.  


In prosperous times, the cost/benefit of simply walking out of a cafe with a cup of coffee in hand, tossing away a perfectly good opportunity to while away a few enjoyable hours with friends or reading a good blog, may not even be a consideration–like having a canoe or boat you never use–whatever.   


However, right now the economic conditions in the US are not reassuring. Financially nervous customers are looking more closely at many of the lifestyle costs they once took for granted.  Commuters entrapped and alone in their cars and SUV’s may very well give up or cut back on their daily coffee spending, at least their spending at drive-thrus, especially as other costs like fuel rise and force stark economic choices. 


These coffee drinkers may also look for a lower cost alternative, like McDonald’s.  This behavior may partly explain why Starbucks’ sales are slowing, while during the same period McDonald’s reported sales growth of over 11%, with “specialty coffee” rollouts at over one thousand US locations, offering yet another super-automated interpretation of latte, cappuccino, and breve, only at cut rate prices.  However, I wonder if a daily latte in this case is really the indulgence of a luxury or just the fulfillment of a soulless “caffeine habit”?


My recommendation for everyone is to spend more time with other people, ideally in cafes, but even while driving if possible.  Coffee is the drink that invites us to come together.  If you’re drinking coffee alone from a disposable cup most of the time, you are probably doing something wrong, and you are definitely missing out on all coffee has to offer.  Fortunately, it is never too late to start enjoying coffee and the culture surrounding it for the affordable, soul-enriching luxury it is.  Whether you have a car or not, everyone, is encouraged to pull over and take time to enjoy a cup of coffee in the company of friends and companions at the cafe that makes you most comfortable.  Repeat often for best results.  


If you need tips on where to find this, please feel free to email me. (eperkunder@mac.com)  


Eric Perkunder



Slayer Corporate Headquarters

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