Are you charging enough for your coffee?
ROSLYN COOMBE, HEAD OF CUSTOMER MARKETING AND NEIL COYLE, SENIOR ACCOUNT MANAGER
The results of our winter pricing survey are in and some of the findings may surprise you.
Matthew Algie’s Winter Survey
The Matthew Algie Winter Pricing Survey was conducted from 9th to 23rd December 2022 providing a two-week snapshot of menu prices in over 400 sites across the UK and Ireland. More than 10,000 items were checked on availability, price, size, and type.
Both Chains and Independents were visited, and sites were identified by the sector in which they operated (Food-focused Chains, Coffee-focused Chains, Independents, Hotels & Leisure, Retail & Supermarkets, Restaurants & Pubs, Speciality Coffee, Convenience/To Go). The geographic location and location type were also recorded within categories: Inner City, Suburban, Retail and Travel.
Our 5
Key Takeouts
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1
Is it time to update your coffee menu?
The UK Consumer Prices Index (a measure of inflation by the ONS) rose 9.2% in the 12 months leading up to December 2022. The Irish Consumer Price Index rose 8.2% in the same period.
The mean average price in the UK of a 2oz double espresso rose just 3.7% (9p in real terms) between June and December 2022, while the mean average of a 12 oz latte in the same period rose by just 2.3% (7p in real terms), both significantly below the Consumer Price Index.
The mean average for a double espresso in Ireland rose just 2.5% (7p) between Jun and Dec 2022 and a latte 12 oz rose by a mere 1.3% (5p) between Jun and Dec 2022. Again substantially lower than the price index.
Is it time to review your pricing?
2
Are you charging enough for your flat white?
In December 2022, the UK mean average for an 8oz flat white broke a £3 barrier by 1p with location premiums being clearly evident (circa 20p+ for Inner-City / 30p+ Travel locations). Yet over 25% of all sites surveyed in December 2022 charged £2.80 or less for an 8oz flat white.
In Ireland during the same period, the mean average of an 8oz flat white was €3.31. How do you compare?
What does this mean for me? - Coffee bean prices are rising. If a hypothetical site were to raise their price for an 8oz flat white from £2.80 to the national average of £3.01, it would mitigate a £13 price increase on the cost of 1 kilo of coffee beans (for 16g dose double shots). Meaning you could invest in higher quality, more sustainable coffee and/or make extra profit – what’s not to love?
3
Filter coffee is becoming more expensive...
In the 6 months between our summer and winter surveys, the average price for filter coffee increased by more than any other drink in this period with the average price of a 12oz filter coffee at £2.67/€2.90
Filter coffee is a very broad term covering everything from cost-effective bulk brew to single-serve speciality coffees at premium prices. Anecdotally, batch brew in the middle ground appears to be growing in popularity, where speed of serve doesn't need to come at the expense of quality. Food for thought if it's not already on your menu!
4
Independent cafés are still charging for plant-based mylks
On average, independent cafés charged more for alternative milks than the big coffee chains (with coconut and almond being the most expensive options). The average additional charge for soya mylk in December 2022 is 23p/€0.34
5
Adding flavour to your coffee can add a whole lot more profit...
By adding 1 pump of flavoured syrup to your coffee you are able to charge customers an additional 50p per drink. On average, large coffee chains charge more than independent cafes for syrups as an additional item (54p and 45p respectively Dec 22). The average price for syrup in Chains increased in price by approximately 6p (12%) within the six-month period between surveys, whereas the average price for syrup in Independents did not change.
In Ireland, the additional charge for a syrup was less at €0.46 on average by comparison to €0.59 in a coffee focussed chain.
Customers of Matthew Algie have full access to our pricing report with many additional findings. Please contact your coffee sales manager for more information.