Why Cold-Brewed Coffee Costs More
Is today the day? That is the question baristas start asking themselves as soon as the trees start blooming, and it refers to when their customers will make the switch from hot coffee to cold. In a regular year that usually doesn’t happen until May, but unseasonably warm weather in many parts of the country means the cold coffee season could start early and run a full six months or more. And for high-end coffee shops specializing in cold-brewed coffee, this creates potential problems.
Cold-brewed coffee, as you probably know by now, is its own thing (in other words, it is not simply hot coffee that’s been chilled with ice!) and it can cost upwards of a quarter to a dollar more than a cup of hot coffee. Why is that? Higher fixed costs and the unpredictability of iced season. According to New York Magazine’s Grub Street:
Like the hot stuff, cold-brewing involves mixing pulverized beans with water, but the latter process requires about twice as much ground coffee. Those grounds infuse filtered water for 12 to 24 hours, creating iced-coffee concentrate. That liquid is cut with water to taste, at a ratio of about one to one. Yet even after all this dilution, a cup of cold-brewed joe can include 62 cents worth of ground coffee. A hot cup might include 35 cents’ worth of beans.
The higher cost of cold-brewed coffee is also due to those clear plastic (sometimes compostable) cups, which can cost twice as much as the paper cups for hot beverages. The straw and napkins (for “sweaty” drinks) push the cost up even more, sometimes by as much as 20 percent. And renting an ice machine—a common practice for many cafés—costs about 12 dollars.
All told, these variables, along with the extra coffee required for cold-brewing, add up to a goods cost of about 80 cents, and that doesn’t include milk… That means owners must charge at least $3 to keep their margins healthy. Those who charge less are consigning their iced coffee to be much less profitable.
Do you buy cold-brewed coffee? Do you make your own? Or do you just drink hot coffee all year round? (I confess—that’s what I do!)
Read More: The Iced-Coffee Economy: Why the Cold Stuff Costs More at New York Magazine’s Grub Street
Related: The Toddy Take on Iced Coffee