[EVG photo from May 2016]
In her Metro Money column yesterday at The Wall Street Journal, Anne Kadet tackled a popular topic — the price of coffee at NYC delis/cafes/coffee shops.
She mentions a deli in Brooklyn Heights that sells a small coffee for $1. The owner reportedly loses money on that deal. The piece, available to subscribers only, goes on to outline why inexpensive deli coffee is unrealistic — especially with NYC rents.
Mike Kruszewski, founder of Pourt, which recently closed on Cooper Square, crunched some coffee numbers for her:
The ingredients in a small cup of high-end, direct-trade, “sustainable” coffee costs 62 cents, he says. That includes 43 cents for the beans, 14 cents for the cup, sleeve, lid, and stirrer, and 5 cents for milk and sugar.
But a cafe owner also has to pay rent on a New York City storefront, not to mention wages, insurance, supplies, utilities, trash service, software and payment processing. All told, says Mr. Kruszewski, expenses easily reach $600 a day.
If a cafe only sold $1 coffee, he says, it would have to sell 2,150 cups a day to just break even. That’s 3.5 cups a minute. The barista would have to serve faster than humanly possible.
At $2 a cup, the cafe would have to sell 500 cups a day, or one cup a minute—still too much volume for a small business.
“At $3.50,” says Mr. Kruszewski, “we get to a doable 250 cups a day.”
Some exceptions to this are street carts, which don't pay rent, and chains such as McDonald’s and 7-Eleven "that enjoy massive economies of scale."
The owner of that Brooklyn Heights deli said that he hoped the $1 coffee deal would attract new customers.
It hasn't.
Previously on EV Grieve:
The 75-cent coffee at Subway