With Coffee, the Price of Individualism Can Be High
Single-Serve Coffee Brewers Make Convenience Costly
By OLIVER STRAND
Published: February 7, 2012
SOMETIMES it’s hard to tell how much coffee costs, even if you know what you spent. At least that’s the case with many of the single-serve brewing machines that are soaring in popularity.
For example, the Nespresso Arpeggio costs $5.70 for 10 espresso capsules, while the Folgers Black Silk blend for a K-Cup brewed-coffee machine is $10.69 for 12 pods. But that Nespresso capsule contains 5 grams of coffee, so it costs about $51 a pound. And the Folgers, with 8 grams per capsule, works out to more than $50 a pound.
That’s even more expensive than all but the priciest coffees sold by artisanal roasters, the stuff of coffee snobs.
An exclusive single-origin espresso like the Ethiopia, Gedeo Single Origin Espresso from Sightglass Coffee costs $19 for a 12-ounce bag, or about $25 a pound. La Cima beans for brewed coffee from Stumptown Coffee Roasters, a Grand Cru selection grown at Finca el Injerto, a renowned farm in Guatemala, is $28.50 for a 12-ounce bag, or $38 a pound.
In fact, most high-end coffees cost less than $20 a pound, and the coffees you find on supermarket shelves are substantially cheaper. A bag of Dark Espresso Roast beans at Starbucks is $12.95 a pound, and a bag of Eight O’Clock beans for brewed coffee at the Food Emporium is $10.72 a pound.
How much of that coffee goes into a cup varies according to who (or what) controls the machine. For instance, a Lavazza Gran Crema espresso capsule has 7 grams of coffee, the standard for most chain coffee stores. But independent coffee shops regularly pack 14 to 22 grams into an espresso shot.
When it comes to single-serve systems, you’re not just paying for coffee, you’re paying for convenience and the technology that makes it possible to brew a single cup in seconds. Pop in the pod, push the button: it’s a sure thing every time. Supermarkets and specialty stores are filled with items that make it easier on you, and it’s up to the shopper to determine if it’s worth it.
Some decisions are easy (rendered pork fat, fresh pasta); others are a toss-up depending on who’s in the kitchen (chicken stock, salad dressing). Where single-serve coffee falls on that spectrum depends on whether you regard coffee as something you make or something you drink.
“Americans under the age of 40 are thinking about coffee pricing in cups,” said Ric Rhinehart, executive director of the Specialty Coffee Association of America. “If you asked my mother how much coffee cost, she would have told you that the red can was $5.25 a pound and the blue can was $4.25. If you ask people in their 20s and 30s, they’ll say coffee is $1.75 to $3.75 a cup.”
This generational shift helps explain why single-serve coffee is the fastest-growing sector of the home market. According to a study from the National Coffee Association, single-serve coffee is now the second most popular method of preparation after conventional drip brewers, by far the dominant method. In 2011, 7 percent of the cups of coffee consumed in the United States were made with a single-serve brewer, up from 4 percent in 2010.
The premium that single-serve coffee commands makes it especially lucrative. Julian Liew, a spokesman for Nespresso, said single-serve coffee is 8 percent of the global market, but accounts for 25 percent of its value. It’s likely that the number will continue to climb.
According to Keurig, 4 million of the company’s K-Cup brewers, for regular drip coffee, were sold in the 13-week run-up to Christmas 2011. During that same period, Green Mountain Coffee Roasters sold more than $715 million in K-Cup packs. The pods and brewers are now front and center at stores like Bed Bath & Beyond and Staples. Keurig licenses its technology to other companies, and last year, Dunkin’ Donuts and Starbucks started making K-Cup pods. Keurig even sells a refillable filter that you can pack with your own coffee.
Nespresso has sold more than 27 billion capsules worldwide since it was introduced in 1986. Later this year Ethical Coffee Company plans to sell Nespresso-compatible capsules for around 20 percent less on Amazon.com. So the United States might see something novel for single-serve coffee: a price war.