Why Is Starbucks Coffee So Expensive?

For some coffee aficionados, brewed coffee isn’t good enough. It has to be coffee shop coffee. And for others, it has to be from a particular chain, such as Starbucks. But it’s safe to say that Starbucks coffee isn’t “cheap.” The world record is a 77-espresso shot drink sold in West Virginia, which included ingredients such as white mocha, soy, protein powder, vanilla bean, and Italian roast drizzle. The price tag: $71.35. Here are some of the reasons why the company’s everyday coffee is so expensive:

 

  1. Demand

As much as people complain about the cost of Starbucks, the company seems to be doing OK. In 2014 the company had net earnings of $2.07 billion. As long as people pay big bucks for fancy coffee at Starbucks, they’ll keep charging the same prices.

 

  1. Branding

Without a doubt, Starbucks’ brand recognition is one of the highest in the world among coffee chains. It’s the largest in the world, with over 20,000 stores in over 60 countries (2014). Second place is Dunkin Donuts, with just half the number of locations. If you buy a cup of coffee from your local coffee shop or diner, there’s no branding involved. But if buy from Starbucks then you’re paying for the Starbucks logo plastered on everything from the storefront to the coffee cup.

 

  1. Beans

Starbucks use premium coffee beans from all corners of the Earth. Starbucks recently bought the whole lot of auction-sold Brazilian coffee beans from a family farm, and then sold coffee made for the beans, for $7.50 per cup. While Starbucks fans certainly enjoy cups of java with premium beans, the cost of getting those Class A beans from coffee beans to their coffee cups isn’t cheap.

 

  1. Baristas

Starbucks recently launched a program in some of its locations, in which the baristas were trained to initiate the topic of race relations with their customers. As awkward as the program is, such training costs money. And that’s on top of the training that the baristas get for actually making the tons of different coffee items on the menu at Starbucks.

 

  1. Convenience

Starbucks is constantly testing new ways to make its coffee more convenient. It’s currently testing a new delivery service in locations such as NYC’s Empire State Building. And if you want to brew Starbucks coffee at home, you can buy some premium roasted beans online or at their brick-and-mortar stores. Then there’s the convenience of simply going to a Starbucks location and ordering a cup of your favorite java. Yes, there’s the option to brew your own coffee at home. But for Starbucks fan, it’s safe to say that it’s not quite the same.

 

The “you get what you pay for” rule applies somewhat to the issue of Starbucks’ pricey coffee. However, demand is arguably the biggest factor for such costly cups. As long as people are willing to shell out more money for Starbucks coffee, the prices won’t be dropping anytime soon. Basically, they charge the prices they do, because they can.

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