The Economies of Coffee

Tassimo Ready to Go

I would like to point out that I am in no way trained in the the dark arts of being and Economist, however I am rather cheap and observant. These are the only credentials that I need in order to write this post.

Four years ago when I got my full time Web Development job in Montreal after 8 years in England, I was buying a brand new Toyota Matrix and needed some winter tires. After getting the feeling that the dealer was not exactly giving me the best possible deal, I looked around me and quickly noticed that I knew at least 4 other people with the same car. So being the cheap guy that I have become (too many years working with tight Scots), I walked into our local tire store and asked him if he offered any discounts for 4 sets. He didn’t quite understand what I wanted at first but when I said that I was going to buy 16 winter tires on rims and need them installed all on the same day, his eyes lit up. I had just done all of his selling work and his only possible reaction was to give me a good price. Well 4 years down the road and I’m back in his little shop with 5 new Mazda 5s, no I am not about to break into any songs, but I will say this: Zoom Zoom, we got our deal again.

Fast forward a few weeks and I’m in line at Tim Horton’s with the Burg andMelita USB Espresso Machine we’re buying our second or third round of coffee for the day and it hits me. The four of us each spend about $5 on coffee a day, that’s $25 a week and we work on average 48 weeks a year (hoping to make it 47 this years). So Tim Hortons gleams $1200 CDN from us a year. I know that is nuts, but we’re geeks and geeks need coffee for fuel right? It’s as  much of an essential to the job as Internet access, shiny new laptops and iPhones & BlackBerrys. I know what you’re thinking, this is a first world problem, make coffee in the office or get over it: end of blog post. Maybe you’re right but we are geeks and that’s when the TECHnology took over, I was playing around with TwitPic and uploading a picture of what we refer to as the USB Espresso machine, my little desktop Melita espresso maker which is very cool but quite slow and requires a lot of maintenance. Hence the frequent trips to Tim Hortons. This is when the right and honourable Patrick Ferguson contacted me through the Twitter vaunting the wares of the Tassimo coffee maker: The Barack Obama of all coffee makers. According to the good sir we could be enjoying the same high quality Starbucks and Nabob coffees for $0.30 – $0.40 a cup without any of the messy clean ups of the French Press (Bodum) or having to wait for the Espresso machine pressure tank to cool down. So I ran his thoughts through my Tim Hortons analytical formula:

THLc x 4/day x 5 days a week x 48 work weeks = Annual Office Coffee Spend

Where THLc is a Tim Hortons Large Coffee at $1.45 (Refill cup ).  So Timmies works out to $1392CDN, Second Cup is about $1536CDN and Starbucks will run you about $4800 CDN but that is just an estimate as there are no prices whatsoever on the Starbucks site, and every time I have gone, I’ve just bought soemthing really silly. Just for the record neither Second Cup nor Tim Hortons post the price of a cup od Coffee online, although Tim Hortons does have a shop online section where you can buy coffee beans and coffee making accessories.

So our analysis of the current coffee prices at Tim Hortons and the realistic feasablity of making our coffee while maintaining the equipment and actually getting our work done in the same day brought us all to  seriouslyHmm Looks like a deal consider the Tassimo system to make our everyday coffee. The only draw back is that the system costs between $150CDN and $180CDN  for the machine depending on whether you get the additional water filter. We work in an industrial park near the airport and the thought of double filtered coffee just makes us all feel a little better. So after a week or two of deliberation, using the one week wait per hundred dollars rule of TECH buying I heard about on LifeHacker.com, five of us office geeks each put in $30CDN and bought the Bosch Deluxe machine with the filter. We also bought a Tassimo and the Melita USB espresso machine wide selection of coffees and teas to properly test out the coffee making prowess of the Tassimo system. I will admit that we might have overdone it a little bit, but as the honeymoon phase winds down, I’m sure we’ll settle in to our Nabob Columbian and morning blends as well the occasional Eearl Grey tea. Needless to say that after the first week, we had all paid for the expense of the machine in our savings alone.We might have taken this a little too far.

  • We’re drinking less coffee, mediums instead of large.
  • The coffee taste better. (Sorry Tim Hortons it’s true)
  • We spend more time working, as we’re not running across the street to get a cuppa as often.
  • We’re saving with every cup we drink.
  • No more mental I.O.U.’S as everyone buys their own.

Starbucks bomb proof mug I guess what this all boils down to is that you can really start to tell what kind of state the economy is in when the price of a cup of coffee becomes an important factor in your life. Four years ago, a Tim Hortons coffee was essential part of the the creative and the debugging process as we would walk across the street discussing ideas and possible solutions. The convenience outweighed the price. As we bought a house and had our second daughter, bringing in the first cup from home was more important than convenience. As we looked into buying a bigger car for the arrival of the twins as well as getting the roof done, the price of coffee (..and gasoline..) became even more important.

The funny thing about the economics of coffee is not that we are willing to scale down our consumption or settle on cheaper brands to satisfy our needs. But that we’re willing to rethink how we acquire it and the way that we consume our coffee. With the Tassimo System, we are still drinking Nabob and the occasional Starbucks. But we are doing it in a way that we acknowledge that the slightly higher price is still economical compared to the alternatives. It’s more expensive filter drip coffee, but it’s easier and quicker to produce and consume. Also it’s a more personal cup of coffee, it’s all about the me. Draw any comparaison to the economy at large as you like and even the way we consume our gasoline. But make no doubts about it, this is one damn fine cup of coffee.

Quite possibly the perfect cup of coffee

I used to think that pour a Guinness was one of the coolest culinary events until I made a Latté in my clear glasss mug.

Making a Latté on the Tassimo

7 comments

  1. Hm. Nabob? Hm. Not so sure. The best “consumer level” (ie affordable) machine coffee I have found is President’s Choice West Coast Blend. I think that’s what it’s called. Not sure if you get PC at Provigo – anytime i’m visiting PQ and a Provigo i’m usually concentrating on the beer section – but if you do it’s worth a shot. This week a large can was $6.99 at Loblaws for 907g can with the easy open lid (a huge plus in packaging). The darker roast provides a better flavor (and less caffeine, i’m led to believe) for the lattes and capps, i think. But I am an Americano drinker, so I am drawn to the darker meat. Fair and free trade at that: more expensive, but i drink less, enjoy more and sleep better.

    Tim Hortons – and its carcentric coffee cult – will soon be going the way of General Motors and the Montreal Expos. Me, I’ve been off the Tims since i stopped commuting by car and working shifts. I had one the other day and found it offensive, i’m not sure why. It made me all jittery and bitter and overdramatic.

    Both Tim Hortons and Nabob are provided to the visiting teams at the Air Canada Centre in Toronto. The Leafs get PC West Coast Blend. Might explain Saturday night. Carbo sounded like he had had one too many double-doubles during the intermissions

  2. Very interesting.

    But one of the first things you need to learn if you want to walk in the rarefied air of economists is the term “ceteras paribus.” All other things being equal – which they never are! Which is why you learn that concept in Econ 101 and then every professor thereafter contradicts it.

    Consider your cost structure. With Timmy’s you only pay for whatever coffee you’re ordering. With the Tass you’ve got initial cost of buying the unit and the regular costs of buying ingredients. So if you’ve only got $1.54 in your pocket (I just came back from Timmy’s) you can get a coffee. But your first coffee in the Tassimo cost you a lot more; and though the price steadily declines as it averages out after a couple weeks you need to buy a new supply of coffee (at least, if your office doesn’t supply the sugar, cream, etc.) so your next cup suddenly costs a lot more – and if you don’t have the $10 to re-supply you’re not getting any coffee (unless you can afford to go over to Timmy’s, but then . . . )

    And then there’s all the “fringe benefits” of getting up from your desk, stretching your legs, talking to your co-workers as you round up the order, getting outside for some fresh air, being served by some minimum-wage peon who makes you appreciate all those years of school and hypocritical professors you endured to get to be on this side of the service counter!!!

    P.S.: I’ve concocted my own mocha-mix at home that I can just add free hot water to from the office coffee machine!!!

    P.P.S.: Have you installed the Gravatar plug-in for WordPress yet?!

  3. But your first coffee in the Tassimo cost you a lot more; and though the price steadily declines as it averages out after a couple weeks you need to buy a new supply of coffee (at least, if your office doesn’t supply the sugar, cream, etc.) so your next cup suddenly costs a lot more – and if you don’t have the $10 to re-supply you’re not getting any coffee (unless you can afford to go over to Timmy’s, but then . . . )

    And this is why we have credit! Which, as we all know, Tim Hortons does not allow (except PayPass but that is a other post). If you have budgeted your month properly, whether you pay as you go or you prepay, it doesn’t matter as long as you are not overpaying and I’m pretty sure we all agree that:

    $1,54 Timmies > $0,30 Tassimo + $0.69 (250ml of milk) + steal sugar from caefeteria (or where you are having lunch with all the money you save).

    I have not enabled Gravatar yet. There are far too many -atars to pick from. I am going to wait for the -atar war to be over and then side with whichever is not the BetaMaxAtAR. That would be HDDvD for you kids.

  4. I think Gravatar has a lot of momentum behind it. I know there’s a few other WordPress plug-ins discussed on Gravatar to achieve similar purpose.

    I’ve discussed a few options in my blog (Gravatar, Openvatar, and Pavatar) but I like Gravatar the best (well, getting the profile avatar from OpenID would be the best but that’s not going to happen for a while).

    But as for the real subject, I agree your Tassimo will probably be cheaper fairly quickly. I just wanted to throw out some cool sounding economic analysis since I toiled away at the degree for 10 years and then ended-up working in IT!!!

  5. Reflecting those ECON 101 concepts, we can also take the “bonum commune communitates” (welfare of the community) principles from PSY102. We’ve notice a radical change in the exactitude of our beverage preferences ever since we’ve stopped ordering at Timmy’s. With Tassimo, our coffee is just the way we like it, no more ordering errors (rampant at our Timmy’s). Hence, lowered blood pressure, fewer headaches and a better emotional disposition. I wouldn’t be surprised to see our triglyceride levels drop a few points.

    We also interact within our group more than usual and generally take the time to chat and reflect on our new condition as apex consumers. Johnny C’s office as become the Inner Sanctum of our fledgling Secret Society, the Brotherhood of the Disk. Ours is a closed circle reflected by our Motto: No Juan Must Know.

    Therefore, we can safely say that the synergistic levels of “coolness” far outweighs any apparent monetary loss or break-even points.

  6. I guess I have to bring up Occam’s Razor, which simply put, states that the simplest solution is usually the right one. I guess we just have to figure out if buying singles is simpler than staying in and making your own.

    On the other hand, if I start drinking coffee tomorrow, and adopt this cost structure, I can quit coffee and buy my MacBook Pro with no guilt…

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