Project 1: Product comparison and cost analysis of single brew coffee.
2017-12-02
Objective:
Single cup brewing systems were developed in the 1990s but caught on in a big way in the mid 2000s. One of the pioneers in the field, Keurig, has the registered name K-Cup®. The K-Cup® is now ubiquitous with single brewing cup coffee.
I am aware of the marketing strategy of selling the machine low and the consumable high to develop a steady stream of profit. However, fortunately some systems allow handmade cups to be used. This analysis will compare the cost of a quality pod to one handmade using Starbucks beans.
Non-Consumable Materials:
1. Reusable single brew cup. Comes with a built in metal mesh filter. Cost $5.00. Cost per brew $0.01.
2. Damaged Small Hamilton Beach Custom Grind 80365
Consumable Materials:
1. SanFrancisco Bay French Roast 100 pod box on sale at Costco. Cost $0.25 per Cup.
2. Starbucks French Roast 1.13 Kg on sale at Costco. Cost $0.014 per gram.
3. PAB200 Jr White Basket Coffee Filter. Cost of per basket coffee filter $0.03.
Coffee and Filter Cost per Handmade Single Brew Cup:
The pods are a generic style and found to be quite robust. Estimated life of a pod is 360 cups. However, the brewing machine may be sensitive to handmade cups so be sure to start with a single and test. I made the error of purchasing multiple and it caused a return trip to the store. Note I found machine to be sensitive to even the revision changes within a product so once you have a good cup be sure to buy extras.The coffee filters are not necessary for a handmade cup. However, I added them because it thought it made the cup of coffee a little stronger. I also like the filter for efficient cleaning after the brew. Adding the filter does add a modest cost of about $0.033 to the cup of coffee. This is a significant cost component of over 10%.
Three bags of coffee beans were measured and found always to be slightly above the net weight. Ground coffee was added to the cup until full without measuring. The coffee beans were ground with a damaged Hamilton Beach Custom Grind, so grind does vary. The labour includes coffee grinding, pod cleaning, resizing coffee filter and packing, coffee fill, and storage. The total labour time per pod is 1 minute and houshold labour is estimated as minimum wage $7.25 per hour. The labour cost is $0.12 per pod a significant cost component.
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Coffee and Filter Cost per San Francisco Cup:
After a reasonable amount of shopping I found the most cost effective pod to be a box of SanFrancisco Bay French Roast. The cost per pod comes out to $0.25 per pod. I more typical grocery store cost would be $0.50 per pod.
| Handmade Pod | Sanfrancisco Bay Manufactured Pod | $0.30 | $0.25 |
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Conclusion
The handmade pod without any process control is competitive but not any cheaper than best priced manufactured pods. Better control of the handmade pod costs is possible with optimization of the process, (i.e. better grinding, controlling quality without using additional filter). If you do not include the cost of labor, say you consider the handmade pods a pastime, then the cost of handmade pods wins hands down.
Links to Coffee Webpages.
Design credit knxops.com in cooperation with Ltimas and co.
Copyright © 2019 by Gregory Altimas aka Greg Altimas