Questions: Price vs. weight

[lachris]

Question:

For roasters looking to sell their product to the public as a hobby or other, what unit size do you use most and what price for each do you see that sells better?

Example:

1lb @ $10
12oz @ $8

All units same price regardless of origin??

Priced based on origin???

I have been pricing my beans at the same price per weight regardless of variety.

What do you find works best??

 

[PinkRose]

Hello "lachris"

I often wonder what ever happened to the good 'ole pound of coffee weighing 16 ounces, and a half pound weighing 8 ounces? I think it's a shame the 12-ounce "pound" has stayed in the picture.

I buy from an old fashioned roaster who sells a pound (16 ounces) of most single origin coffee beans for $10.00. If I only want a half pound ( 8 ounces), the price is $5.50, which is probably where they make their profit.

I like the pound or 8 ounce option much more than the pound or 12 ounce option. If someone doesn't want a whole pound of coffee, buying a half pound seems much more reasonable, especially if they are trying a new coffee for the first time.


Rose

 

[caffe biscotto]

Do you buy in all of your greens at one price, regardless of origin???

 

[Alun_evans]

Hey Ed, MOST brokers and/or agencies certainly will not be selling all origins at the same price. This is for a variety of resons. For a start specialty coffee arabicas are, and have been for some time, somewhat removed from the futures markets that quote Arabica Mild and Robusta prices. The futures market is still a rough guide. However for arabicas that are- a/. excellent quality, b/. interesting (for marketing purposes and c/. in short supply due to a+b, roaster customers will be prepared to pay a good price. Conversely an A grade arabica, from an origin that is having a poor crop season and therefore is not in demand, will sell for less.

Like anything in life you pay for what you get when it comes to greens. This is why agencies exist> they somewhat carry the risk, as well as being able to purchase at origin for a competitive price on volume and then be able to onsell to roasters in the consuming countries.

For instance havea look at todays current green offerigs from Royal in New York> http://www.royalcoffee.com/offering.asp I have not counted how many origns they have, but must be over 200. All would be sold at a different price per lb/kg or MT

Perhaps a clearer example is Tom from Sweet Maria green offerings- these are easily seen as a price per lb > http://sweetmarias.com/prod.greencoffee.mvc.shtml

 

[caffe biscotto]

Hi Alun. When you say "Ed", I think you mean me?

I was hoping to let Lachris answer his own question when he asked:

Question:...
All units same price regardless of origin??

Priced based on origin???

I have been pricing my beans at the same price per weight regardless of variety.

What do you find works best??

If it were me, I'd have a standard markup from what I pay for greens. Each origin would have its own unique price, based on what I paid for the green and roasting time/prep/requirements, per origin. Say a 100% markup from green to ground (could I copyright that term? Heh.). If you pay $6/lb for green Ethiopian Yirgacheffe, sell the finished product for $12/lb, higher for smaller quantities and lower for larger quantities.

So, now for the 12oz price vs. 16oz price, clearly you would want the price for the 12oz to be a little more than just 75% of the 16oz price. Smaller quantities require the same amount of handling as larger quantities, hence a better deal per pound on larger quantities. It takes the same time to seal a 12oz bag as a 16oz bag, for example. The ingredient coffee is just a part of your cost, not all.

Thanks Alun & good luck Lachris.

 

[ourcoffeebarn]

lachris,


Each coffee or blend has it's own price, 1 pound with an option to get two 8 ounce bags.

I use a database to get the prices I charge for each of my options for the coffee I sell. Retail or wholesale, green or roasted. Much easier than a pad and pencil!

 

[lachris]

Currently, I price all my beans at the same 12oz price. 12 oz because we pitch on our label that you should only by what you can use in a week or two for freshness. It seems that a pound is too big and a 1/2 pound is too small for folks. 12oz is the most popular in our local grocery and I'm just following them.

I understand about the whole price based on origin idea, but many of my customers relate higher price with better tasting coffee. I'm sorry but that just is not true. Just because I had to pay just south of $3/lb for greens on some origin doesn't mean it is far better tasting than a $1.80/lb varitey. I would rather my customer be encouraged to try any of the beans and equal price helps them in the decision process. If I were trying to decide on a $9/lb bag or a $12/lb - I might never try the $12 because just based on price.

In my book - higher price does not = better taste. But to a customer who is not a coffee snob - he may equate that higher $ = better taste.

I get $9/12oz bag. Advantage: freshness/taste. People really do know the difference. I was at our cub scout pack meeting last night and a lady that walks in our neighborhood was there - I had given her a bag of Sumatra to try - she told me that it was GREAT and that her husband wanted to get more - I told them I would be at the farmers market and she said they would be there. Another lady trades with my wife, a bag of beans for her fresh eggs and goats milk. She loves our Kenya but wants to try others.

I like the idea of a 16oz bag but I would think the $12/tag would slow sales a bit. Also, in my YM2 I can roast 4lbs and get 4 - 12oz bags with a about 3-4oz left for us to use at home to sample the end product. Works for us.

I was just wondering how you guys felt about the whole 12oz vs 16oz and the $9 to $12 price range...

Other comments???

 

[caffe biscotto]

Gee lachris, I'm lost man, sorry.

I do like the 12oz strategy though.

 

[roaster dave]

Currently, I price all my beans at the same 12oz price. 12 oz because we pitch on our label that you should only by what you can use in a week or two for freshness. It seems that a pound is too big and a 1/2 pound is too small for folks. 12oz is the most popular in our local grocery and I'm just following them.

I understand about the whole price based on origin idea, but many of my customers relate higher price with better tasting coffee. I'm sorry but that just is not true. Just because I had to pay just south of $3/lb for greens on some origin doesn't mean it is far better tasting than a $1.80/lb varitey. I would rather my customer be encouraged to try any of the beans and equal price helps them in the decision process. If I were trying to decide on a $9/lb bag or a $12/lb - I might never try the $12 because just based on price.

In my book - higher price does not = better taste. But to a customer who is not a coffee snob - he may equate that higher $ = better taste.

I get $9/12oz bag. Advantage: freshness/taste. People really do know the difference. I was at our cub scout pack meeting last night and a lady that walks in our neighborhood was there - I had given her a bag of Sumatra to try - she told me that it was GREAT and that her husband wanted to get more - I told them I would be at the farmers market and she said they would be there. Another lady trades with my wife, a bag of beans for her fresh eggs and goats milk. She loves our Kenya but wants to try others.

I like the idea of a 16oz bag but I would think the $12/tag would slow sales a bit. Also, in my YM2 I can roast 4lbs and get 4 - 12oz bags with a about 3-4oz left for us to use at home to sample the end product. Works for us.

I was just wondering how you guys felt about the whole 12oz vs 16oz and the $9 to $12 price range...

Other comments???

I'd agree, a 12 oz bag of coffee allows something below the 10$ price point. Which definitely makes a difference in overall sales. From my perspective anyway, consumers tend to look towards the 12oz bag at 8 or 9 bucks towards the 16oz bag at 12 or 13 bucks.

 

[lachris]

roaster dave

I agree - and let's face it, I'm trying to educate Folgers drinkers @ $5/5lb can to come over to fresh locally roasted coffee @ $9/12oz. - not an easy task. They all say - "...where is all the cream and suger...!" that's okay too. :wink:

I just know that it doesnt take long for folks that really lke coffee and have an open pallet - to taste the real difference.

 

[ElPugDiablo]

12 oz bag, most are 10, COE coffees anywhere from 14 to 20

 

[MakoShark]

... for what it's worth, Pearls of Wisdom

I understand about the whole price based on origin idea, but many of my customers relate higher price with better tasting coffee. I'm sorry but that just is not true. Just because I had to pay just south of $3/lb for greens on some origin doesn't mean it is far better tasting than a $1.80/lb varitey. I would rather my customer be encouraged to try any of the beans and equal price helps them in the decision process. If I were trying to decide on a $9/lb bag or a $12/lb - I might never try the $12 because just based on price.

- from CBB Pearls of Wisdom:

• Pearl #1: Charge a higher price for your coffee.

More expensive coffee tastes better. Your coffee will taste better if you charge more for it.

This is a perception thing. You're wise to partially market this way. You may not base all of your pricing strategy on it, but you will make the unconscious connection with many consumers who will tend to believe higher price = better coffee.

I believe it. These are words to live by.

MakoShark

 

[lachris]

Thanks for all the good comments!

Where I live, COE means nothing and would be a hard sell to most. Still, I hope to continue to educate as much as possible to the extent of moving more to the fresh cup and away from the 4hr old air pot.

lachris

 

[ElPugDiablo]

Thanks for all the good comments!

Where I live, COE means nothing and would be a hard sell to most. Still, I hope to continue to educate as much as possible to the extent of moving more to the fresh cup and away from the 4hr old air pot.

lachris

COE means nothing to 99.99% of people anywhere. I don't think I have any customer know about it until they try some.

 

[lachris]

ElPug - how do you provide that to your customers? Selling by the cup or just selling beans by the lb??? I'm sorry for not looking back and finding out more about you before replying.