It costs $1 to make a cappuccino.
So why are we spending so much on our coffees? Starbucks has a pricing strategy that factors in both the cost of production and the target profit. Starbucks has also raised their prices on drinks over the years due to inflation and to cover increased labor costs. Starbucks does an exceptional job marketing their drinks, and tricking you into paying for more. Trendy drinks like the infamous “Pumpkin Spice Latte” and “Summer Skies Refresher” are at a price point that tricks customers into thinking they’re paying a reasonable price, but after all of the add-ons like cold foam, pumpkin syrup or raspberry flavored pearls, the price has skyrocketed a whole $2.75.
There are 20,228 Starbucks stores in North America. Aside from the 38,137 stores worldwide, 75% of Starbucks global net revenue is from North America. Practically everybody is paying for Starbucks and because of how expensive most of their drinks cost, it starts to feel more like a luxury item. Smaller coffee shops feel the need to hike their prices to compete in this competitive market, often feeling like they have no choice on the matter. Public employee criticism against Starbucks has been for a number of reasons pertaining to tax and the raise in prices.
If we were to compare the cost of a Starbucks drink at home, such as a latte, to Starbucks’ iced lattes, we would see that overall someone would save $5,000. While espresso and Keurig coffee machines are an investment, they can save you thousands of dollars in the long run. Clive Coffee reports that “over five years, the coffee shop goer spends close to $8k, whereas the at home barista spends closer to $3k.” Greenlight debit card company shares how an at home coffee can cost just 26 cents per cup, “the average cost range for a pound of ground coffee is $8-$20. The average pound of coffee can make roughly 24-46 cups of coffee.” While this is obviously dependable on the brand of coffee, this math is mostly accurate for everyone who is willing to be disciplined enough to save the money.
Although the Starbucks experience may seem like it is worth the amount of money you’re paying, the price on these drinks can be seen as outrageous when added up.
