If im asked, I'll explain very politely that all of our costs have risen so we have unfortunately had to raise prices. Luckily, all other prices in every other industry are also rising and most sensible people do understand. if they don't understand, then they're quite likely to try another coffee shop where the prices there will also be going up. People do get used to the higher prices very quickly in my experience. Thanks for the amazing videos!
Some good discussion. Businesses need to make a profit so a baseline business should have calculated cost of materials, overhead and operating costs and set prices to make a reasonable profit. If costs go up, and your model was reasonable, you should be able to increase prices. Don't increase prices solely to increase profit. I can make an expresso at home, including cost of coffee, milk, overhead and amortization of equipment for about US $1.50. Based on the plethora of cafes in the greater New York area, coffee at home is better. So time at a cafe is for convenience or sometimes ambience, thus a price of US $3.50 - $4.50 is to be expected ONLY if it is a terrific cup. Go beyond that, just to make profit and you won't have money to reinvest, you'll start having problems making ends meet. But never try to operated a business without a reasonable profit. That is a Death Knell.
I think there’s also an opportunity for cafes to support the boom of home baristas and home roasters that has risen since Covid - I love how Artisti supply green as well as roasted coffee. I’m in Melb, you don’t have a cafe here (as far as I know) and I’m a regular customer as a home roaster and coffee enthusiast 👍🏻
Hey, our green sales have constantly increased over the last few years. So has the price of our green though so yes, we’ve recently had to realign our online prices. Still much cheaper than roasted if you know what you’re doing. So much opportunity to support cafes with retails sales to offset the home market taking cup sales from them. Thanks for you support 🙏🏻 Jimmy
Hi Jimmy, how high is the price increased in Australia? Green bean specifically compare to last year or two? We have increment of 30-100% compare to 2-3 years ago 😢
Although the price of a coffee might be justified in terms of a what goes into the service that provided. But there is a limit of what a coffee is worth to someone. It's different to everyone. It's a luxury not a necessity. If you push the higher price with all the quality but it's not what people want they are happy with lower quality but more affordable and more often. So in the end you have to price services at the price and quality that the customer wants in your location. That maybe high or low you are only as good as your customer base.
Knowing many different businesses I have to say that it’s better to make a few smaller coffee price increases during a year than one, but a big one (like 20%). People don’t like sudden big increase of anything
Hi I am Arjun Lama from Abu Dhabi, uae. We are sailing every coffee at 12 aed. But the beans are very expensive. Our brewing beans is 90+ grading. Now I want to increase price. So how can I? Give me more idea please. Thank you so much for help🙏
I get the price rises, absolutely. I think the problem I have is: as a person who has a commercial grade single group machine and high end grinder at home, and someone who gets a lot of enjoyment out of using it, learning, and trying different coffees at home, the idea of paying $7 out somewhere (like i did the other day), sincerely loses its shine.
Coffee industry is hard. If we look back 10 years ago, how much does breakfast menu cost compare today and how much coffee price? I’ve been in this industry for 14 years and I fully understand how hard it is to increase coffee price, but it has to increase, unfortunatelly
I am sorry - I know this advice is all well intentioned, however, price increases in coffee have outstripped the component inflation - particularly when wage inflation has not been that high. In cities like Melbourne, where there is alot of good coffee, including at home, it’s not as easy as jacking up coffee prices.
Whilst I'm not denying anything you've stated, it always needs to be said that for most cafe's, coffee has the largest profit margin of anything sold. So, rather than raising the price of coffee, raise the price of something else. For many cafe's people mostly come for the coffee, but will buy other things. Therefore, the business plan/model is key. Of course that varies from business to business. Cheers!
I have recently stopped buying daily coffee when my piccolo hit $5, it's just too much. Some of the suggestions for rising prices: 1. Try and negotiate cost reductions instead of just passing them all on (rents, etc). 2. Maybe think about charging people that bring their own cups less, less for piccolos etc. 3. As a PR move, try and put some pressure on right wing cafe owners (via industry associations) who endlessly appear on tv moaning about staff wages, remote working etc. It is a real turn off.
Hi Jimmy, Great video, love the insight! Would love to connect and have a discussion about how AWOL can help get new customers and help with retention.
![Lp. Сердце Вселенной #60 РОЖДЕНИЕ ЛОЛОЛОШКИ [Финал] • Майнкрафт](http://i.ytimg.com/vi/YoR0pAV9FVQ/mqdefault.jpg)
If im asked, I'll explain very politely that all of our costs have risen so we have unfortunately had to raise prices. Luckily, all other prices in every other industry are also rising and most sensible people do understand. if they don't understand, then they're quite likely to try another coffee shop where the prices there will also be going up. People do get used to the higher prices very quickly in my experience.
Thanks for the amazing videos!
Thanks for you comment and I’m glad you enjoyed it ☺️
Jimmy
thanks for the wisdom and insight
Some good discussion. Businesses need to make a profit so a baseline business should have calculated cost of materials, overhead and operating costs and set prices to make a reasonable profit. If costs go up, and your model was reasonable, you should be able to increase prices. Don't increase prices solely to increase profit. I can make an expresso at home, including cost of coffee, milk, overhead and amortization of equipment for about US $1.50. Based on the plethora of cafes in the greater New York area, coffee at home is better. So time at a cafe is for convenience or sometimes ambience, thus a price of US $3.50 - $4.50 is to be expected ONLY if it is a terrific cup. Go beyond that, just to make profit and you won't have money to reinvest, you'll start having problems making ends meet. But never try to operated a business without a reasonable profit. That is a Death Knell.
I think there’s also an opportunity for cafes to support the boom of home baristas and home roasters that has risen since Covid - I love how Artisti supply green as well as roasted coffee. I’m in Melb, you don’t have a cafe here (as far as I know) and I’m a regular customer as a home roaster and coffee enthusiast 👍🏻
And I noticed you upped the green price .. 👀
Hey, our green sales have constantly increased over the last few years. So has the price of our green though so yes, we’ve recently had to realign our online prices. Still much cheaper than roasted if you know what you’re doing.
So much opportunity to support cafes with retails sales to offset the home market taking cup sales from them.
Thanks for you support 🙏🏻
Jimmy
Depends on the market your serving. A great coffee can be a meal tho. A darn good one too😊
👍🏻
Hi Jimmy, how high is the price increased in Australia? Green bean specifically compare to last year or two?
We have increment of 30-100% compare to 2-3 years ago 😢
Although the price of a coffee might be justified in terms of a what goes into the service that provided.
But there is a limit of what a coffee is worth to someone. It's different to everyone. It's a luxury not a necessity.
If you push the higher price with all the quality but it's not what people want they are happy with lower quality but more affordable and more often.
So in the end you have to price services at the price and quality that the customer wants in your location. That maybe high or low you are only as good as your customer base.
Compare to Starbucks. That junk cost -7-8$ latte with regular milk! And .80 cent for syrup 😮
Knowing many different businesses I have to say that it’s better to make a few smaller coffee price increases during a year than one, but a big one (like 20%). People don’t like sudden big increase of anything
💯!! Don’t freak them out! Slow and steady wins the race.
Hi I am Arjun Lama from Abu Dhabi, uae. We are sailing every coffee at 12 aed. But the beans are very expensive. Our brewing beans is 90+ grading. Now I want to increase price. So how can I? Give me more idea please. Thank you so much for help🙏
I get the price rises, absolutely. I think the problem I have is:
as a person who has a commercial grade single group machine and high end grinder at home, and someone who gets a lot of enjoyment out of using it, learning, and trying different coffees at home, the idea of paying $7 out somewhere (like i did the other day), sincerely loses its shine.
Coffee industry is hard. If we look back 10 years ago, how much does breakfast menu cost compare today and how much coffee price?
I’ve been in this industry for 14 years and I fully understand how hard it is to increase coffee price, but it has to increase, unfortunatelly
Thanks for your input 🙏🏻
Lovely
🙏🏻
I am sorry - I know this advice is all well intentioned, however, price increases in coffee have outstripped the component inflation - particularly when wage inflation has not been that high. In cities like Melbourne, where there is alot of good coffee, including at home, it’s not as easy as jacking up coffee prices.
Whilst I'm not denying anything you've stated, it always needs to be said that for most cafe's, coffee has the largest profit margin of anything sold.
So, rather than raising the price of coffee, raise the price of something else. For many cafe's people mostly come for the coffee, but will buy other things.
Therefore, the business plan/model is key. Of course that varies from business to business.
Cheers!
Agreed. Changing the business model to take the pressure of coffee sales is a must these days.
Jimmy
I have recently stopped buying daily coffee when my piccolo hit $5, it's just too much.
Some of the suggestions for rising prices:
1. Try and negotiate cost reductions instead of just passing them all on (rents, etc).
2. Maybe think about charging people that bring their own cups less, less for piccolos etc.
3. As a PR move, try and put some pressure on right wing cafe owners (via industry associations) who endlessly appear on tv moaning about staff wages, remote working etc. It is a real turn off.
That’s unfortunate 🥲
Hi Jimmy, Great video, love the insight! Would love to connect and have a discussion about how AWOL can help get new customers and help with retention.
Thanks ☺️
@@ArtistiCoffeeRoasters sent you guys an email, I hope it reaches you.