RAISING PRICES - 2017

After 4 years of trading, we have decided to raise prices on April 1st by 10p for all Filter and Espresso based drinks , our new pricing will now be;

Espresso - £2.60

Milk Drinks (all sizes) - £2.90

Filter Brews - £2.90

These are, as always, floor prices for a ceiling cost per KG of £20. If the coffee costs more than £20, then we will raise the price accordingly.

Although many of the factors considered have remained the same from our last price rise, some have warranted a complete rethink. For some context here is what we've considered;

Cost of goods.

Usually this is the catch-all reason used to explain away any price rise, and yes, rising costs usually lead to a rise in selling price. I feel it's a lazy way out to follow this tack so lets look at our costs;

Price rises - Surprisingly, very little has risen in price this year, with consumable and milk holding price well.

So what about our biggest expense, Coffee?

We have endeavoured to bring in a wider range of coffees from across Europe this year, enhancing our offer to you, the customer. How has this affected our costs?

Allegra, the group behind the London Coffee Festival and the European Coffee Symposium, compile a yearly survey of costs and trends within the coffee sector. the 2014 survey found that the average coffee cost per cup was 8p, lets compare that to our cost per cup;

For the first 2 quarters of trading this financial year (April 2016 - Sept 2017) we spent £14263.23 on coffee.

over 26 weeks and an average of 24kg per week this gives us a per/Kg cost of £22.86 , a £2 per kg rise on last year. A reflection of both increasing wholesale prices and a new buying philosophy.

Our average coffee dose is 15g, we then allow 2g for wastage, giving us an average cost per cup of 39p. I was unable to find if the 8p quoted was for single or double shots, but even at 16p, our costs are still more than twice that of the national average. 

Viewing it this way we have always charged too little, and this is part of a wider problem affecting the Speciality coffee industry, In order to facilitate increasing prices paid to farmers, how can we raise the value of a cup of coffee? Whilst we are endeavouring to achieve this through our approach to both brewing and service, it is our intention to address this issue head-on in the coming year by exploring the option of donating a to a charity providing support in growing countries for every cup sold.

The cost of quality.

Its very easy to find articles on how the price of green coffee has been rising and falling in recent years. On the whole they will be referring to the "C" price, which is that for commodity or exchange grade arabica traded on the major stock exchanges. For this price you get little traceability and diminished quality.

We buy from a trusted group of roasters who deal, on the whole, in Speciality Grade coffee. This has increased traceability, usually to farm level, but often to individual plots. It is also, on the whole,of higher quality costs and more due to this and a variety of factors. Read this for a good breakdown of the hidden costs.

We are committed to this quality, which means our pricing ranges from £17-30 per kg, although recently we have seen an increase in the number of coffees costing above £20 per kg.

The cost of service.

Great coffee is nothing without great service and in my view the best service is always provided by committed professionals.

We also have a unique style of menu, that relies heavily on the staff to provide clear and concise information allowing the customer to make a more informed choice, as situation where a degree of professionalism comes to the fore.

To foster this professionalism, FCP only hires staff to full time, salaried contracts rather than part time or Zero Hour contracts as is common. This means that for the staff we hire, coffee is a career, not just a job.

With the advent of the National Living Wage, this is where the biggest new cost will be felt. We already pay our staff above the minimum wage, but with that due to rise by 30p per hour, it would be wrong for me not to pass this on to my staff. Why? Simply put the premium they were being paid for their professionalism would be wiped away in an instant. It is also worth considering the imminent effect of the Workplace pension, something I am very keen to offer.

Whilst a common perception is that cafes are a "licence to print money" as a business we hover on the line between break even and making a small profit,  a significant cost increase of this kind to a payroll that already runs at 31% of turnover could be potentially crippling. In a similar vein, its often noted that the shop looks busy, so I must be doing well. But as a business owner It behoves me to ensure that the business remains viable, this is a fine balancing act of paying myself a wage suitable to help sustain a family of 4 and one that allows the business to function.  As such my personal salary is significantly less than the current average for a Cafe Manager of £22,000 (per Totaljobs.com ).