The Economies of Coffee

I would like to point out that I am in no way trained in the the dark arts of being and Economist, however I am rather cheap and observant. These are the only credentials that I need in order to write this post.

Four years ago when I got my full time Web Development job in Montreal after 8 years in England, I was buying a brand new Toyota Matrix and needed some winter tires. After getting the feeling that the dealer was not exactly giving me the best possible deal, I looked around me and quickly noticed that I knew at least 4 other people with the same car. So being the cheap guy that I have become (too many years working with tight Scots), I walked into our local tire store and asked him if he offered any discounts for 4 sets. He didn’t quite understand what I wanted at first but when I said that I was going to buy 16 winter tires on rims and need them installed all on the same day, his eyes lit up. I had just done all of his selling work and his only possible reaction was to give me a good price. Well 4 years down the road and I’m back in his little shop with 5 new Mazda 5s, no I am not about to break into any songs, but I will say this: Zoom Zoom, we got our deal again.

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Fast forward a few weeks and I’m in line at Tim Horton’s with the Burg and we’re buying our second or third round of coffee for the day and it hits me. The four of us each spend about $5 on coffee a day, that’s $25 a week and we work on average 48 weeks a year (hoping to make it 47 this years). So Tim Hortons gleams $1200 CDN from us a year. I know that is nuts, but we’re geeks and geeks need coffee for fuel right? It’s as much of an essential to the job as Internet access, shiny new laptops and iPhones & BlackBerrys. I know what you’re thinking, this is a first world problem, make coffee in the office or get over it: end of blog post. Maybe you’re right but we are geeks and that’s when the TECHnology took over, I was playing around with TwitPic and uploading a picture of what we refer to as the USB Espresso machine, my little desktop Melita espresso maker which is very cool but quite slow and requires a lot of maintenance. Hence the frequent trips to Tim Hortons. This is when the right and honourable Patrick Ferguson contacted me through the Twitter vaunting the wares of the Tassimo coffee maker: The Barack Obama of all coffee makers. According to the good sir we could be enjoying the same high quality Starbucks and Nabob coffees for $0.30 – $0.40 a cup without any of the messy clean ups of the French Press (Bodum) or having to wait for the Espresso machine pressure tank to cool down. So I ran his thoughts through my Tim Hortons analytical formula:

THLc x 4/day x 5 days a week x 48 work weeks = Annual Office Coffee Spend

Where THLc is a Tim Hortons Large Coffee at $1.45 (Refill cup ). So Timmies works out to $1392CDN, Second Cup is about $1536CDN and Starbucks will run you about $4800 CDN but that is just an estimate as there are no prices whatsoever on the Starbucks site, and every time I have gone, I’ve just bought soemthing really silly. Just for the record neither Second Cup nor Tim Hortons post the price of a cup od Coffee online, although Tim Hortons does have a shop online section where you can buy coffee beans and coffee making accessories.

So our analysis of the current coffee prices at Tim Hortons and the realistic feasablity of making our coffee while maintaining the equipment and actually getting our work done in the same day brought us all to seriously consider the Tassimo system to make our everyday coffee. The only draw back is that the system costs between $150CDN and $180CDN for the machine depending on whether you get the additional water filter. We work in an industrial park near the airport and the thought of double filtered coffee just makes us all feel a little better. So after a week or two of deliberation, using the one week wait per hundred dollars rule of TECH buying I heard about on LifeHacker.com, five of us office geeks each put in $30CDN and bought the Bosch Deluxe machine with the filter. We also bought a wide selection of coffees and teas to properly test out the coffee making prowess of the Tassimo system. I will admit that we might have overdone it a little bit, but as the honeymoon phase winds down, I’m sure we’ll settle in to our Nabob Columbian and morning blends as well the occasional Eearl Grey tea. Needless to say that after the first week, we had all paid for the expense of the machine in our savings alone.

According tо ѕоmе, women whо ran houses оf іll repute wеrе аmоng thе fіrѕt great coffee makers. In 1674, men wеrе spending ѕо muсh tіmе drinking аt local houses thаt thе women іn England tried tо outlaw coffee. Thе makers іn thе 1600’s аnd 1700’s wеrе designed іn аn array оf styles, mоѕt featuring a fat bulge іn аn effort tо help retain thе grounds whеn pouring оut thе coffee. Sоmе creative individual рut coffee іn a sock іn аn effort tо contain thе grounds іn 1780. Thіѕ heralded thе birth оf thе Mr. Biggin coffee maker. Thе Mr. Biggin used a cloth filter. Fans tried cotton, wool, burlap аnd оthеr fabrics аnd materials tо filter coffee. Cloth wasn’t working real wеll. In 1802, thе metal filter саmе іntо uѕе. On Greatcoffeebrewers.com website you get all types of coffee maker.

We’re drinking less coffee, mediums instead of large.
The coffee taste better. (Sorry Tim Hortons it’s true)
We spend more time working, as we’re not running across the street to get a cuppa as often.
We’re saving with every cup we drink.
No more mental I.O.U.’S as everyone buys their own.

I guess what this all boils down to is that you can really start to tell what kind of state the economy is in when the price of a cup of coffee becomes an important factor in your life. Four years ago, a Tim Hortons coffee was essential part of the the creative and the debugging process as we would walk across the street discussing ideas and possible solutions. The convenience outweighed the price. As we bought a house and had our second daughter, bringing in the first cup from home was more important than convenience. As we looked into buying a bigger car for the arrival of the twins as well as getting the roof done, the price of coffee (..and gasoline..) became even more important.

The funny thing about the economics of coffee is not that we are willing to scale down our consumption or settle on cheaper brands to satisfy our needs. But that we’re willing to rethink how we acquire it and the way that we consume our coffee. With the Tassimo System, we are still drinking Nabob and the occasional Starbucks. But we are doing it in a way that we acknowledge that the slightly higher price is still economical compared to the alternatives. It’s more expensive filter drip coffee, but it’s easier and quicker to produce and consume. Also it’s a more personal cup of coffee, it’s all about the me. Draw any comparaison to the economy at large as you like and even the way we consume our gasoline. But make no doubts about it, this is one damn fine cup of coffee.