Friday, July 13, 2012

The Bizarre Economics of Espresso, Involving Exactly One Reference to Economics and a Lot of Drivel


Coffee has always had a bit of an egalitarian flavour. In Enlightenment London, coffee houses were one of the few places where clerks and the gentry, or even the nobility, could rub shoulders. In 1674, somebody named Paul Greenwood wrote a [satirical] poem about London coffee houses at the time: “First, Gentry, Tradesmen, all are welcome hither / and may without Affront sit down Together.” These disparate classes could gather in coffee houses because almost everybody could afford it.

     Today, coffee is a leveller in a different way. It is the only beverage I am aware of of which one can become a genuine connoisseur and rarely pay more than $3.00. Let's use espresso as a proxy for all gourmet coffees. After all, it is what many coffee nerds drink. Siphons and Clovers and God-knows-what will come and go into fashion, but espresso is the staple beverage of the coffee snob. Like wine, whisky, cigars and many other consumables, espresso has become for many a hobby. Unlike wine, whisky or cigars, the very best espresso is within reach of almost everybody. As much as local arts weeklies may perpetually claim to present 10 great wines under $10.00, those are the exception. The fact is that to drink anything in the least bit fancy costs $25.00. Good whisky has an even higher entry point. Most single malts are $60.00. By contrast, the best coffee shops in the country rarely charge more than $2.75 for an espresso. 

     If the worst espresso were $1.00 or around that, one could simply conclude that espresso is cheap. It would not be that remarkable that the best was less than $3.00. As it is, though, bad espresso usually costs the same as the best there is. I wish I could remember enough of my microeconomics courses to explain this to myself, but I have a suspicion that, in economic terms, no one gives a damn what their espresso tastes like. They are more interested in things like atmosphere, free wi-fi, the attractiveness of baristas and convenience, all of which are important, (though there's nothing more attractive in a barista to me than skill).

     All the more reason, then, to become one of the people who does give a damn and get a lot more for your $2.75, while those suckers pay $2.50 for some crema-less bilge from a hot barista only five minutes from their home. 

2 comments:

  1. Ben, I'm not a coffee connoisseur I read this quote a while ago that I think you may enjoy:
    "Coffee is one of the great, marvellous flavours. Who could deny that? Well, actually, anyone drinking coffee for the first time would deny it. Coffee is one of those things that [have been] called innately aversive. It is bitter and characterless; it simply tastes bad the first time you encounter it. By the time you have drunk a few thousand cups of it, you cannot live without it. Children do not like it, uninitiated adults do not like it, rats do not like it: nobody likes coffee except those who have drunk a fair amount of it, and they all love it. And they will tell you it tastes good. They like a mediocre cup of coffee, they relish a good cup of coffee, and they go into ecstasies over a superb cup of coffee."

    In addition to coffee, I think maybe even more so, cola has an egalitarian flavour. It's available literally everywhere; there aren't too many countries in the world where you can't get a refreshing coke and it's always available at a fairly low price. The flavour is also consistent everywhere you get it, celebrities and the ultra-rich never insist upon a source of coke that's not Pepsi-cola or Coca-cola. In my opinion, when I drink a cold glass of Coca-cola, I am truly drinking the "nectar of the gods".

    I thought coffee was within reach of almost everybody too, but when one of the suggestions to save money during that student loans talk was to cut back on the Starbucks, I am no longer sure...

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    1. Hey Dave! I might have been too quick to use the phrase "egalitarian flavour." It just had a nice ring to it. It was more levelling aspects of the culture around coffee over the past few hundred years that I had in mind when I wrote that. Like whisky, tobacco, anything that people become connoisseurs of, coffee is unpleasant at first blush.

      Cola is certainly very widely available and probably cheaper than coffee in a lot of places, but I wouldn't really expect anything else. The same is true of water, of lemonade and so on. What makes coffee interesting to me is that it is something that people get very into (certainly not everyone, and I'm not suggesting that everyone should), yet, unlike other beverages about which people get snobby, coffee is very rarely outside anyone's reach. True, it might be imprudent to drink a gourmet coffee twice a day, but most scotch-lovers, for example, don't drink 25 year olds twice a day.

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