News about inflation isn’t just a lot of hot air. While core inflation has hovered around 4% year over year since 2020, food prices have risen a whopping 23.6% during the same period of time.
Cafés are particularly vulnerable to inflation as they’re not only beholden to the rising costs of labor and rent, but also the skyrocketing price of ingredients necessary to make drinks.
Ouch.
So how can a coffee shop navigate rising prices, stay profitable, and still serve up customer-delighting drinks?
Read on then save up.
Instantly know your margins.
Do you know which drinks are money-makers and which are profit-drainers?
Use Barista Underground’s drink calculator to determine your profit margin.
This will give you a clear cost baseline and a path to savings.
Go fast. Save fast.
Time is money. But you already knew that. What you might not know is how easy it is to speed up drink prep to serve more customers per hour, boosting revenue without boosting prices.
The TLDR:
- Invest in fast: High-speed espresso machines and automatic milk frothers can cut preparation time significantly.
- Reduce barista bottlenecks: Train baristas to work efficiently, implementing a clear workflow to reduce bottlenecks.
- Get techy: Mobile ordering and self-serve kiosks can reduce wait times and labor costs.
Ditch what you don’t need.
Waste happens. It also happens to add up to unnecessary expenses for things you don’t really need. From unused ingredients to overfilled cups, small losses can equal big costs.
You can cut waste without cutting into your operations by:
- Standardizing portions: Use pre-measured containers for syrups and alt milk to avoid overuse.
- Monitoring inventory: Track ingredient usage so you order only what’s needed.
- Reusing ingredients: Get creative with leftovers, such as turning extra pastries into bread pudding.
Underground tip:
Use Barista Underground to automatically replenish without overordering.
Bulk up.
Our favorite gains: more revenue at a lower cost. Buying in bulk can significantly lower costs, especially for staples like alt milks, syrups, and teas.
Tips for bulking responsibly:
- Use your powers of negotiation: Many suppliers offer lower prices for larger orders. All you have to do is ask–and negotiate.
- Be a good steward of storage: Proper storage not only prevents spoilage. It also helps your team locate ingredients so they don’t order what you already have.
- Buddy up: Sharing is caring. Partner with nearby coffee shops to place bulk orders and share discounts.
Build better supplier agreements.
Strong relationships can lead to strong performance. The secret: developing relationships with suppliers that lead to better pricing and more flexible payment terms.
Here’s how to optimize supplier agreements:
- Shop smart: Choose suppliers that offer honest-to-goodness wholesale prices (:cough cough: Barista Underground).
- Lock in: Got a great price? Awesome. Try to negotiate fixed prices for key ingredients to avoid sudden cost spikes, or order enough as a hedge against future inflation.
- Be loyal: Some suppliers offer discounts for long-term customers.
Do an edit.
Have a ton of that syrup-of-the-moment? Make more matchas than chais? By reevaluating your menu and supply list, you can cut costs on things you don’t miss.
- Give slow-movers the boot: If an ingredient is rarely used, trade it out for something you use on the regular.
- Be seasonally sensational: Adjusting the menu based on ingredient availability can lower costs and keep customers coming in to see what’s new.
- Be savvy: Use concentrates to reduce cost of goods while ensuring quality.
Underground tip:
Check out what’s hot (or cold) in drinks for sell-worthy seasonal recipes, then order accordingly.
Make saving fast and easy.
Shop the industry’s largest selection of coffee supplies at wholesale prices up to 40% less than retail. Plus enjoy fast, convenient delivery right to your door.