The economics of coffee

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According to a 2019 UK study from the Financial Times and Allegra Strategies the wholesale coffee itself typically makes up only a tiny proportion of the total. Indeed, the cost of the actual coffee is usually only around 4% of the cost of a typical cup, which in the study worked out to about £0.10 ($0.13). That proportion is probably even lower for an order like a hazelnut latte, which will have sweeteners and more milk than a typical cup.

Not so simple

The data above is from 2019, and just in the UK, but even if only broadly accurate, it gives a good sense of how complicated the coffee supply chain is. The coffee roaster usually accounts for most of the cost of the actual coffee, while exporters, transporters and processors take their cuts, leaving the actual grower with around just 10% of the coffee cost. In this study that worked to be just one penny from a typical £2.50 ($3.30) cup of coffee.

With prices rising, that number might be a little higher than in this example, but it'll remain just a fraction of what it costs you, even if you order a simple double-shot espresso.

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