Why Are Cafés So Expensive: The Untold Truth Revealed


When you walk into a café you see a great selection of different coffees made from a variety of coffee beans, sandwiches, toasts, cookies, smoothies, and baked goods. After browsing the selection you take a look at the price and oh boy it is high in most cases.

In this article, I will reveal why on earth are cafés so expensive and some additional aspects about cafés, coffee, and the expenses. It’s important to really understand why this is so you can see that it isn’t just the ingredients that are added to the final price tag. But first, let’s see why coffee shops and coffee houses are so expensive?

In short, cafés are so expensive because they are businesses that need money to cover rent, employee payments, a huge variety of condiments and coffee supplies, espresso machines and grinders that aren’t cheap, and all the running costs such as electricity and maintenance among other things.

All these factors added together will now make more sense why cafes actually need to charge the amounts they do to even break even in most cases. Running a café isn’t cheap and every single thing costs money and the customers usually don’t recognize the different factors that add up to the price.

Why Are Cafés So Expensive

Let’s dive more in-depth into the subject and see all the different factors individually so we can have a better understanding of the bigger picture.

Equipment & Supplies

So the first thing that the coffee shop needs before they can serve coffee is the equipment and supplies. These include espresso machines and coffee grinders that cost +$1000, especially the espresso machine that can cost $5000-$10,000 each and the biggest cafés need maybe 2 or 3. Also, there are drip coffee makers, furniture, tableware, cutlery, decor, and everything else that a coffee house possibly needs.

All this will cost substantial amounts of money and most cafés have them on monthly payments, therefore they need to get the money from somewhere.

Ingredients & Condiments

If you have ever been to a café, you might have noticed the absolutely huge variety of different specialty coffees, baked goods, snacks, foods, and the modification options for each one of the offerings. Upholding these standards will cost a lot of money and all the things that are added to a cup of coffee such as milk, sugar, flavor syrups, sauces, and whip creme aren’t free either.

When you look at the coffee cup in this way, you will notice that it isn’t just the coffee that costs but there are many other factors that are added to the price. The coffee mug and the coffee itself with all of its condiments aren’t the only factors that will determine the cost because there is the service as well.

Service

One of the biggest expenses is the employees for sure. Hiring, training, and keeping the workers up to date will cost money and time without talking about the salaries, insurances, and the additional cost behind the hiring that customers don’t see. They as their own is quite an expense.

Also, depending on the coffee house there is a brand that can increase the price, and the employees are often paid more for working for a well-known brand, therefore the employees need to have more expertise and professionalism which will further increase the service cost and training time.

Running Costs

There are a ton of running costs for cafés, coffee houses, and coffee shops. There is so much to keep in mind so I have made a list where you can see different costs in a more easy way. Take a look!

  • Rent
  • Ingredients
  • Electricity bills
  • Labor
  • Business & Tech subscriptions
  • Wi-Fi
  • Maintenance & Repair
  • Marketing
  • Consultants
  • Insurance
  • Taxes

As we can see the list isn’t short and the usual monthly cost for an average-sized café with an okay location is multiple thousands of dollars, therefore if the coffee would sell their products and coffees with $2 each, there is no way that the café would survive until next month. All these factors considered it is no surprise that the café is expensive and yet there are more other expenses so let’s talk about those now.

Other Expenses

There are certainly other expenses that the café needs to pay from time to time, therefore the prices for the customers need to be increased even further. For example, a coffee shop needs to update their equipment or even get new ones when they expand or they might need to hire more people for the holidays due to an increase in customers.

Believe me, there are always surprise costs when it comes down to any business and a café isn’t an exception. If the coffee house isn’t prepared for other expenses that might occur suddenly, then they would be in a real pickle that could cause serious problems to the whole business.

All in all, cafés don’t differ so much from a restaurant because the cost to start and uphold them can be pretty much the same, yet people have an idea that a cup of coffee and a panini should cost $2 each which would result in the cafés bankruptcy in a heartbeat.

Of course, the ingredients aren’t as expensive as the restaurant’s steak meals, however, the ingredients are just the tip of the iceberg when it comes to running a café.

Why is coffee so expensive

Black coffee in itself isn’t so expensive, however when you order a Latte, Macchiato, Frappuccino, or some other specialty coffee it can get expensive. This is because it includes milk, sugar, other condiments, and they require more time and effort to prepare.

There are some places that charge a lot of money from just a regular black coffee. For example, I remember when I was visiting Madeira and the airport charged $4.9 for just a black coffee and to my disappointment, it was the worst coffee I have ever had in my life.

Why are some coffee beans more expensive

Generally, there are so big differences between coffee bean types because of supply and demand. In addition, the farming location, altitude, bean type, and distinctive aroma will have an effect on the final price.

For example, Kenya Kahindu Estate coffee beans cost a little over $10, however, a similar-sized package of Jamaican Blue Mountain beans costs around $80. This is because the cheaper beans have a lot of supply and not so large demand, whereas Jamaican Blue has extremely limited supply due to the small farming area and extremely high demand because of the unique taste loved by many.

Should I buy whole bean or ground coffee

The choice is ultimately yours however if you are a coffee lover that really appreciates the days coffee moments, I would highly advise buying the whole bean because it will offer more fresh coffee which will result in a much more aromatic and fuller taste when compared to ground coffee that has been in an airtight package for a long time.

If you decide to get the whole beans from now on, you will need a proper coffee grinder for the task but more on that below.

Is it worth it to grind your own coffee

Grinding your own coffee isn’t a big operation, in fact, it is extremely fast when you simply pour the coffee beans into the grinder, press a button for 5-10 seconds and your fresh coffee is ready to be used.

There are many benefits to grinding your own coffee. Your coffee will be in its most fresh state when you just have ground it, therefore the taste and aroma are superior. In addition, the grinding process is enjoyable and your mornings will get started better with a fresh scent of freshly ground coffee.

Below is the picture, you can see the grinder I personally use. It is a blade grinder that will do the job perfectly. However, if you are even more coffee enthusiast than I am, you can use a burr grinder which will do even finer ground coffee than a blade grinder, resulting in more aromatic coffee. You can see my recommended blade grinder here and my best choice for burr grinder here.

I use a simple blade grinder to ground my own coffee every day.

Why are bar drinks so expensive

Alcoholic beverages are so expensive in bars because of supply and demand. People are willing to pay the high price in a bar which allows the establishments to keep the prices so high because they simply can. In addition, there are the purchasing costs, service, and utilities that are also included in the price.

Conclusion

There are many valid reasons why cafés can and need to ask the prices that they are. The cost of running a café really don’t differ so much from restaurants, therefore even if the offerings aren’t as expensive as a full restaurant meal, the rent, utilities, employees, and all the other things we talked about have the same cost as in a restaurant, therefore the prices need to set accordingly in order to keep the business running.

I hope that you enjoyed this article and got some great value from it so you can understand better how the café and coffee business really works and why they need to ask such high prices.

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Omar Abdalla

I’m the owner of JRS and while I love working in a busy restaurant, I also enjoy more peaceful and relaxed cookouts at home.

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