ONA Coffee's Matthew Lewin talks coffee prices, market trends and the future of specialty coffee.
Republished from the original article from our friends at dmarge
Spare a moment for that cup of liquid black gold you’re cradling in your hot little hands. It’s astounding how a diminutive package can bring so much caffeinated joy to the world’s working adults and flat lay fiends. There’s no doubt that coffee is a universal language and today we’re delving deeper to uncover what makes a humble cup of coffee worth $1, and what makes it worth up to $20.
Helping us on this journey into the finer details between cheap and expensive coffee is 2019 Australian Barista Champion, Matt Lewin. The man who lives and breathes coffee also moonlights as a barista coach and coffee consultant so if there’s anyone who knows how to break down the bean to explain what you’re really paying for, it’s this man.
This is the difference between a $1 self-serve coffee and a $20 high-end one prepared by dedicated baristas.
How Country Of Origin Defines Price
The most obvious aspect that distinguishes a cheap coffee from an expensive one is the bean’s country of origin. According to Lewin, Brazil has long held the crown as the base for your average-priced milk-based coffee.
“It was sweet and round and perceivably offered those qualities in a cup,” says Lewin. At the other end of the spectrum, coffee connoisseurs get to enjoy something called Geisha coffee sourced from Panama. The latter is considered the pinnacle of coffee and is famous for its high turn florals, sparkling acidity and heady aromatics and flavours, thus putting it well ahead of the Brazilian sourced beans in terms of pricing. Just last year a 45kg sack of Geisha coffee grown in Panama broke the world record by selling for US$80,300.
Times are changing though, adds Lewin. Thanks to the internet and greater education in the coffee scene, these fancy Geisha beans are now being grown in Brazil, Colombia and Ethiopia to respectable standards. As such, the price variance between coffee sourced from Brazil and Panama are quickly closing in on one another.
Where $1 Coffee Comes From
Lewin doesn’t know the exact country that non-coffee specialists like 7-Eleven acquire their famous $1 coffee from, but he does know that they’ll be contracting beans from somewhere in the world where they can roast reasonably good commercial quality beans with a low labour costs. The key word here is ‘good’.
“Our market is more discerning than ever when it comes to coffee, even if it’s just 7-Eleven coffee,” says Lewin.
“So they’re just paying less for coffee but it’s still commercial quality coffee. Commercial coffee or market coffee is just coffee that doesn’t reach a high quality standard and doesn’t have as much love put into it. There’s a lot less steps and labour and this is reflected in a cheaper coffee.”
Price Of Picking The Perfect Bean
So why does your favourite high quality coffee from a barista cost anywhere from $4 to $20? Like anything made to high standards, there are lots of little things that contribute.
Coffee like the Geisha variety and some of the world’s most expensive are usually rated at the 95 to 100 point range. According to Lewin this level of produce requires:
“Obviously there’s less of it because it’s harder to make. Through supply and demand that will push the price up a little bit as well.”
Drying Process Of Expensive Beans
Not all fruits are like this, but according to Lewin “with coffee, the longer and slower it can grow[s], usually the better quality it can get.”
“Higher quality coffee grows higher up in the mountains [where] there’s less oxygen, [and] conditions are tougher,” which means there’s an element of fighting.
“It has to fight to survive, but in that process, it develops more layers in the bean,” Lewin says, thus becoming a better quality product.
To illustrate: “[It’s] like making a croissant. Through longer maturation you get more fats, more carbohydrates, more sugars and more complex acids.”
This means that lower altitude grown beans (where it’s warmer and easier) can be grown in 4-6 months, while high grade stuff can be grown in 9-10 months (and that’s where the goodies come from).
Then there are other variables, Lewin says, like picking it at the perfect ripeness, fermenting it to perfect approach and drying it slowly with full control over moisture level.
“The intensity in labour in making top-end coffee will blow your mind compared to what it takes to produce average grown commercial coffee. It is like a work of art. And it’s so easy to muck up at any stage. Very fickle.”
The Coffee Snob Effect
Does branding play a part in price? According to Lewin that’s both a yes and a no.
“I think there is a brand awareness by consumers out there. A lot of coffee companies are a lot more established. They say they’re specialty coffee but a bulk of their business is commercial. That’s upsetting a lot of people. There’s a huge percentage placed on branding in a cup of coffee. You pay what they want. The coffee market’s tough; you have position yourself where you want to be and – by your price and by your product – you determine what market you want to play against.”
These trends change over the years though, as Lewin’s next insight shows.
“For many years in Australia, we were all specialty coffee, buying more expensive stuff, roasting it light trying to prove ourselves. Now the market’s flipped itself and there are so many cafes, [the market is] so competitive and there are so many roasters in Australia, that cafes have to buy cheaper coffee just to survive.”
According to Lewin, “Farmers are now saying, ‘for 10 years you wanted good stuff and now you come asking for the cheap stuff’. Coffee companies are putting cheaper and cheaper coffees into the market and that’s what we call the race to the bottom.”
“Think about what a cafe does for $4. 10% for wages, rent and you have 10% left as profit. It’s not as simple as people think it is.”
Other Hidden Variables
Now to the juicy bit: how much does a barista’s skill add to the price of your coffee? After all, you don’t want to pay for your cafe’s 50 year old, monk-coveted, Himalayan roasted bad boys only for some second rate hipster to burn the beans.
Here’s what Lewin had to say.
“We’ve got a bunch of champions and world champions here. That strengthens our brand. We buy and have farms providing some of the best roasted coffee in the world which we give to our wholesale clients.”
“Do we charge appropriately for that? Absolutely. Does it mean the price of the lattes in their cafes are more expensive? No.”
“What they [the company] are able to do,” Lewin explains, “is be part of something greater and make coffee to a higher level than to other people.” That said, “I think it’s unrealistic to think that because Matt Lewin looks after your account, you’re now able to charge $7 for a latte tomorrow. It doesn’t work like that.”
“I don’t work in cafes. It’s an interesting market. Some people want good coffee and they’re willing to pay for it. Others are price conscious. I believe how we approach coffee adds weight and value to people being able to respect and pay for it. To be honest, we have coffees in the program that cost $20 – $30 a cup. If you want an experience like that you can have scotch or whisky.”
Do Milk Prices Affect The Final Cost
Yes. “A lot of people would pay 50c extra for soy, bon soy or oat milk,” Lewin says. However, if you’re after full cream milk then the answer is no “because it’s the industry standard.”
“Whether you buy the creamiest full cream organic milk or the cheapest, you’re still charging $4 a latte; that’s just the reality of the market.”
So why bother buying high-quality milk? “Because you’ll (hopefully) have more people walk through your door.”
How Does The Service Factor Affect Price?
“You get what you pay for. In the future there’ll be machines that put out coffee as good as baristas [but] there’s romance and nostalgia in coffee,” Lewin says.
“People like the ritual of talking to their barista. It’s cool. Automation makes it consistent but there’s nothing like the [human] experience.”
Can A Good Barista Save Poor Quality Beans?
Lewin’s response? “If a F1 driver hopped into an average car, they’d be able to get more out of it. I think anyone who understands coffee to a great level will be able to get something more out of it.”
“What’s really cool about coffee too though is that it’s not all about the barista; that’s why we’re creating systems for our clients that remove as much of that human element so customers can have a more consistent experience regardless of who’s on that machine.”
“Would I make a coffee 10x better than some of the best baristas in Australia? Hell no. I actually think there are many here a lot better than me.”
A Final Word
What needs to be known, Lewin says, is that when it comes to coffee there are many moving parts that people tend to forget: “We get this incredible experience in a cup that’s pretty cheap. But you have to farm it, pick it, process it, dry it and not mess it up.”
“Then you have to hand it over to a boat that travels for a month on water. Then it gets to a roaster who roast it to perfection without messing that up. Then you have to put it in a bag to de-gas it for a week before use, give it to a barista who has to open it, grind it, tamp it, extract it and they have to not mess that up either.”
“And only then,” he continues, “If 25 million steps haven’t been messed up you get this beautiful result. And you can see how much goes into a cup of coffee even before it hits a cafe. So many steps and those steps cost money.”