Keys to Cafe Management: Pricing

Nov 03, 2022

Running your own cafe is challenging, and one of the major stresses for cafe owners is determining the price they should sell each item, and the budget in general. The cafe owner must factor labour, cost of goods, rent and utilities, peak and low seasonal traffic into every unit they sell.  With the cost of goods rising so much, so quickly, (coffee in particular) this task becomes even more difficult. 

 In 2021 the cost of green coffee spiked more than it had in the last decade. This increase is going to impact roasters, cafe owners, and consumers. Since the entire coffee industry rests on the backs of coffee farmers, it is vital that they are able to make a living wage. The owner of a cafe has the responsibility to ensure they are getting coffee from a roaster that buys ethically sourced green beans. This is likely going to mean more expensive coffee. Slavery in the coffee industry is still a very real problem so do your due diligence and speak to the roaster who you purchase your coffee from about where they source their greens, don't be afraid to ask questions.

It can be helpful to be fully transparent with your customers regarding the inevitable rise in prices. Knowing about the farmers that your roaster is getting coffee from can benefit you. A plaque or an infographic on display will also ensure customers are aware of the people behind the product, their children’s educational needs, the challenges they face as farmers, and the improvement in their lives because they make a living wage. 

Ideally, you should raise your prices as infrequently as possible. To do this you'll need to have a little bit of foresight. It is better to raise your prices a small percentage higher than needed, less frequently, than to raise them every time your costs increase. 

There has also been a strong push by some groups to remove surcharges from beverages using alternative milks. This certainly affects business overhead and would alter the cost of all coffees by some margin. It is up to the discretion of each business owner whether or not this move makes sense considering both their consumer demographic as well as the values of their brand.

Keys to Cafe Management: Pricing