# Food: January 2011 Archives

## The high cost of free espresso

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.

### October 2012

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