The Price Footprint

When did coffee get so expensive? Unfortunately, we probably have Starbucks to thank.

Starbucks is not known for cheaply brewed coffee. Looking at the prices of any specialty drink you will find extremely high prices considering it is just coffee and considering the relatively small amount. At Starbucks, according to Smithsonian.com, you can order a drink that costs more then $45! But, let’s examine the rest of the market.

I, a new college student, splurged on a Keurig. It might possibly be my new best friend. It brews specialty drinks within seconds in the comfort of my own room.

But, for a box of Keurig K-cups, which are the only coffee pods that work in the Keurig machine, typically cost upwards of $11.  For 30 ounces of coffee grounds from Folgers, I would spend less than $10.

The point of a Keurig and Starbucks is the specialty drinks that cannot be easily made at home. But for the price, I can’t help but question if this is really what I, a college student, should be spending my money on. Unfortunately, it seems as if Starbucks has set a precedent. People like special coffee drinks they can’t find anywhere else. And if they can’t find it anywhere else, the prices can just keep on rising.

The Starbucks precedent has seemed to have bled into the rest of the coffee industry as well. As I discussed in last week’s post, Pumpkin Spice Lattes have overrun the coffee industry this fall.

Dunkin’ introduced its own Pumpkin at Dunkin’ campaign. As Dunkin’ tries to catch up with the strides that Starbucks seems to be making in the coffee industry, their prices rise with it. This means that Dunkin’, a once notably cheaper coffee chain compared to Starbucks, now has to raise its prices to stay relevant.

This sounds as if coffee brands feel as if raising their prices will make them comparable to other brands. This might be because some people associate price with value. Dunkin’ is still brewing the same coffee they always have, but now, maybe, people will see it as a true player.

For Starbucks, the decision to raise already high prices wasn’t an easy one. In fact, the company cites the need to close all of its locations last May for anti-bias training (which I discussed a few posts ago) as the reason it had to raise the price of its coffee by 20 cents in an article with Fortune. Though it does not seem like that much of an increase, it is sure to add up over time. And, more than anything, if consumers to continue to buy Starbucks despite the increase, who is to say that Starbucks will not continue to push the limit.

Let’s face it: those of us who drink Starbucks are probably going to continue to drink it for a long time. The price increases are just subtle enough that we miss it. And c’mon… a little price increase for anti-bias training… I can’t be mad about that. Overall, Starbucks makes good, specialty drinks that I can’t make myself. If I have to pay 4 bucks for it, I guess that’s what I’ll do.