Credit: George Hodan - Public Domain

Is Single-Serve Killing Coffee?

Credit: George Hodan - Public Domain

Credit: George Hodan – Public Domain

You might think that the headline of a recent Eater piece — Americans Are Drinking Less Coffee Thanks to K-Cups — would strike fear in the heart of the industry that’s sprung up around single-serve coffee. After all, coffee business is booming (even if it’s slacked off from our coffee-drinking peak in 1946), so anything that portends a drop in consumption would be bad news, right? The answer — and the reasons behind it — are a bit more complex than that.

The Washington Post cites a recent survey by the United States Department of Agriculture (PDF below), which predicted that coffee consumption in the US will drop this year by roughly one percent, even as coffee output and consumption is expected to rise globally. As sales of single-serve coffee machines grow (and they will; WaPo notes that Keurig sales alone have grown more than 133 thousand percent since their introduction), that trend will continue, and may accelerate. The reason is simple: each cup of coffee made with a single-serve machine, especially where pods or capsules are involved, means the same amount of coffee in your cup, but less going down the drain or in the trash.

So what’s the takeaway here? For starters, the advent of single-serve machines means that how we make coffee is different. Yes, that’s blindingly obvious, but take a minute to think about what that means. Where making coffee used to mean firing up the kettle or the coffee maker and brewing a pot’s or percolator’s worth of coffee — some of which would probably sit in the pot ’til the next morning — many people are now brewing a cup at a time. We’re wasting less coffee.

Waste not, want more: our variety packs for Keurig cost less, taste better, and don't waste coffee.

Waste not, want more: our variety packs for Keurig cost less, taste better, and don’t waste coffee.

Look at something else, as well. The single-serve market is on a steady climb, and accounts for how an ever-growing portion of the population gets its daily (or twice or thrice daily) coffee fix. With a little digging, you’ll see that profits aren’t really falling even though we’re drinking less coffee. That’s because unless you’re using machines that utilize reusable filters, you’re paying more for less coffee.

On the surface, the implicit question raised by the Washington Post article — might single-serve coffee ultimately be a victim of its own success? — makes perfect sense, since anything that drives down consumption would seem to work against the industry as a whole. On the other hand, what’s at work here isn’t necessarily a decline in the number of cups we’re drinking; it’s a function of the ratio of beans used to coffee consumed. On the one hand, that would seem to be good news (after all, we’re not drinking less coffee, we’re wasting less). On the other hand, as consumers wise up to waste at different points in the chain, they may soon realize that they’re trading one kind of waste for another. And that’s where things will get interesting.

The USDA 2015/16 report on world coffee markets (PDF)

Go Ahead, Splurge on Takeout Coffee

Starbucks CashCall it the “Ditch Starbucks, Get Rich” meme. It crops up like an unwanted perennial on personal finance blogs year after year. Finances a mess? Just stop buying Starbucks, and watch the money roll in! Indeed, a piece that recently ran in the Huffington Post comes emblazoned with an infographic that lets you know, Here’s What You Could Buy if You Quit Your Crazy Starbucks Habit. Never mind that it sounds like one of those “One Weird Trick” ads that crop up like kudzu on every link farm and spam site since time immemorial.* It’s lousy advice for those of us who care about community, coffee, our well-being, and — believe it or not — even our finances.

On one level, it’s hard to take issue with the HuffPo article (or any of the other guises under which it’s appeared). If you’re drinking take-out coffee at two bucks a pop every work day, it does add up. Even if you’re drinking regular ‘ol brewed coffee at two bucks a pop (we’re not even getting into venti double shot, double-pump, soy mocha latte territory here), that can still add up to about five hundred dollars per year. Of course, that article does go on to suggest that instead of making that one small purchase daily, you instead spend it on something else that’s frivolous,** thereby negating the savings. Even the more “responsible” takes on the “Ditch Starbucks” meme assume that all that money will automatically go into your savings or your kids’ 529 account.

Starbucks-money-flickr-user-By-Yosuke-HasegawaIn a piece for Forbes titled The Smart Reason We Waste Our Dollars On Coffee, Rob Asghar notes another reason why cutting out your coffee habit isn’t what it’s cracked up to be, and why we gravitate toward coffee even when simple economics and common sense tell us that it’s not a “smart” buy. He notes that after taking a slight hit during the height of the 2008 recession, Starbucks didn’t just bounce back, they expanded with a vengeance, going from 15,000 stores in 44 countries to having more than 21,000 stores in 65 countries. By the conventional wisdom, that probably shouldn’t have happened. In hard times, after all, wouldn’t we all be drinking less coffee, or spending more time brewing our own?

But as usually happens, the conventional wisdom was more convention than wisdom. Convenience sells, but that’s only part of the equation. Asghar quotes psychologist Bill Dyment, who states, “So what drives us? Is it simply the caffeine? No, you can satisfy that craving for much less money at home. I think there’s more to the story: The $4 coffee is a pleasing brew of social ritual, self-reward, feeling valued by attentive servers and a welcome pause in a busy day.”

Another inexpensive spluge... HiLine Coffee!

Another inexpensive spluge… HiLine Coffee!

The coffee, in other words, is about much more than just the coffee. In some places, Starbucks, Blue Bottle, and other cafes of their ilk are small but significant status symbols for those of us who can’t afford a Maserati or a pair of Louboutins. For others, it’s a reward for a hard day’s work, but without breaking the bank. And cafes serve another function as well: for years — before the Third Wave, before Starbucks — they’ve been a locus for sharing and community. Those functions aren’t something that’s readily quantifiable. Nor, apparently, are they something we’re quite ready to do without. Our take? We’ll take the latte with our friends. You can keep the rollerblades.

*You know the one. “Dermatologists are FURIOUS With This Denver Mom’s Five Dollar Skin Care Trick!” Complete with an animated GIF of a toddler defenestrating handfuls of mice.

**A hot tub? Cheap beer? Roller blades? Has ANYone rollerbladed since August of 1993 or thereabouts?


Starbucks cash image courtesy
Starbucks Money by flickr user Yosuke Hasegawa