The high cost of free espresso

| Comments (5) | Food Gear
I recently concluded that I didn't have enough high-tech gizmos, and since a new car is really expensive, I decided to buy a new espresso machine instead. For the past 5 years or so I'd been uh, limping along with a Gaggia Espresso and a Gaggia MDF grinder, but it seemed like time for something new. (Those of you who are about to say "why can't you just use a Mr. Coffee like everyone else" can stop reading now.) After a bunch of research and a call to Chris Coffee I settled on a Quick Mill Silvano and a Baratza Vario grinder (total cost with accessories, around $1350). Now there's no doubt that this seems like a lot of money for a coffee maker, which it is, but let's actually do the math:

Consider two separate scenarios, both of which I actually have some familiarity with:

  • Home, both Mrs. G and I drink espresso at a rate of something like 2 shots/day each for a total of 4 shots/day.
  • Office, where we have something like 30 people sharing a single espresso machine. They probably drink around like 2 shots/day each for around 60 shots/day.

At home I buy either Four Barrel or Blue Bottle, both of which are just slightly more than $16/lb (454 g). A double espresso requires around 20g of beans, so in the best case with no lossage/sink shots you get 22 shots out of a bag of beans at a cost of around $0.70/shot. So in our home scenario we're spending $2.80/day ($1022/yr). If we figure the machine lasts 10 years, which isn't unreasonable for a good espresso machine, we're looking at another $140/year. In the office scenario we're spending $42/day, but only weekdays so around $8000/yr. You might be able to get a 20-30% discount buying bulk like this, but still we're talking around $5k/year in beans. You'd want a more expensive espresso machine for this use obviously, but even if you went nuts and spent $10K on the machine and grinder, you're still looking at only around $1000/year in capital expense (CAPEX) cost over the life of the machine. In either case you're looking at about 10-20% of your costs being CAPEX and 80-90% being operational expenses (OPEX).

What do these nubers tell us? First, it's a lot cheaper (and more convenient) to make your own espresso than it is to buy it. An espresso shot at Blue Bottle in the city goes for $2.50, so even if you live right next door and so there's no transportation costs, we're looking at a per-espresso price of between 1/4 and 1/2 that of retail. On the other hand we're looking at a relatively expensive caffeine delivery vehicle, comparable to buying every single soda you drink retail. That said, this applies to more or less every form of caffeinated beverage: bulk caffeine goes for more like $0.04/dose, as long as you're willing to deal with people looking at you like you're a meth addict when you tell them you take caffeine pills instead of drinking a 1/2-case of Diet Coke a day.

Second, as the vast majority of the costs are OPEX (and in particular supplies), so you probably shouldn't worry too much about your equipment costs (unless you're buying a Slayer or something). If you want to save some money you would do better to try to buy a cheaper brand of beans, negotiate a bulk discount, etc.

5 Comments

I'm glad someone wrote this up because that was my rationale for buying an espresso maker, too. That was 6 years ago, so I feel vindicated!

Another reason is that you'll learn to make an almost perfect shot every single time; a factor which shouldn't be dismissed if you're a snob like me... :p

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What about discounting future expenses? This should lower the OPEX relative to the CAPEX.

What about additional utility from not being tied to your home location to drink your espresso? and other utility flowing from social coffee consumption (such as taking a coffee break)?

What about disutility from increasing coffee consumption as it is so readily available at home (it is not entirely healthy to drink too much coffee - at least that is the current wisdom)?

I would be happy to see an approximate revision including these considerations.

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