Starbucks is arguably the world’s most popular coffee shop. With more than 32,000 locations in 80 countries, it is safe to say that the Seattle-based company has become a global phenomenon.
If you’re sipping on a cup from them right now, you might be wondering why is Starbucks coffee so expensive? And it’s a valid question! After all, a simple cup of coffee should not cost so much.
Well, today we are going to take a look at the top 10 reasons why Starbucks coffee is on the pricier side.
Why Is Starbucks So Expensive? The Top 10 Reasons
Starbucks is arguably the world’s most popular coffee shop. With more than 32,000 locations in 80 countries, it is safe to say that the Seattle-based company has become a global phenomenon.
If you’re sipping on a cup from them right now, you might be wondering why is Starbucks coffee so expensive? And it’s a valid question! After all, a simple cup of coffee should not cost so much.
Well, today we are going to take a look at the top 10 reasons why Starbucks coffee is on the pricier side.
Why Is Starbucks So Expensive?
There are many reasons why Starbucks is able to charge premium prices for its products. It is no ordinary brand and definitely was created for a particular niche market. Continue reading below as we explore ten of the reasons why Starbucks is expensive.
1.Premium Product
There is no denying that Starbucks offers high quality products made from the highest quality ingredients. They use ethically sourced milk, top of the line coffee and uniquely curated spices that are shipped from all over the world.
The company has extremely high standards for their ingredients and carefully vets all its suppliers. With Starbucks you never have to worry about getting sub-standard ingredients because the company’s managers are well trained to implement the highest of vetting standards.
2. Brand Recognition
When you walk into a Starbucks and walk out with a cup in your hand, the world recognizes it as a Starbucks cup. Because of this brand recognition, the company stands out in a crowd no matter where in the world the chain is located. It also is sought after, which means the company can easily charge premium rates for its services.
3. Customer Loyalty
Like Apple, Starbucks customers are extremely loyal to the brand, some to the point of being fanatics. Most customers visit the chain almost every day, making it a part of their daily routine to grab a coffee or refresher from the chain.
Starbucks loyalty base is likely in the millions when all its locations are taken into account. These loyal customers are the backbone of Starbucks business and allow the company to charge higher than usual prices.
4. Convenience
Convenience is the main reason why people visit coffee shops like Starbucks. While we all can make cheaper coffee at home, it is nice to have someone wait on us and cater to our needs. The coffee at Starbucks is also way better than most of us can make at home, plus there is no clean up after you are done.
With the locations strategically placed at busy intersections and in commerce centers, while on our way to work, it is super convenient to stop at a drive thru and grab a quick coffee and a sandwich. Some Starbucks locations offer online ordering and curbside pick-up which is even more convenient as the drink is pre-made and awaiting your arrival.
5. Starbucks Is Addictive
Whether or not most Starbucks fans would want to admit it, they’re likely addicted to the company’s products. Almost all of Starbucks offerings have caffeine from either coffee or green tea which is highly addictive. So, most customers won’t mind paying higher for expensive coffee products as they feel they cannot live without them.
6. Superior Taste
Whether you are a barista or an average Joe, your coffee made at home just will not match up to the superior taste of expensive Starbucks. Other coffee shop products also do not compare to the goodness the chain offers. It’s definitely the superior ingredients in their recipe, which costs more, so it’s just right that the customer pays for the difference.
7. Innovative Products
Starbucks is always trendy because they are always innovating new products and experiences. For instance, Starbucks was the first to introduce espresso to the American coffee market, which marked a substantial transition from the prevalent drip-filter coffee at the time.
In addition, the company is always adding new flavors and changing out its flavors with the seasons. This means customers can mix and match and always have new experiences which are worth paying more for.
Additionally, Starbucks is a pioneer in the field of sustainability, spearheading the creation of the “Green Cup” to reduce the concern of plastic pollution. Starbucks has just started using compostable and recyclable cups, which might prevent millions of cups from being tossed out with the trash. The company has publicly pledged to increase the sustainability of its business practices. Therefore, innovation on this scale requires significant investment, which raises pricing.
The company has publicly committed to sustainability, pledging to reduce their carbon impact by 50% by 2030.
8. To Support Employee Benefits
Starbucks is a pretty good place to work. Its baristas and customer service personnel are generally well compensated when compared to other similar establishments. In addition to great wages, Starbucks offers good benefits to its employees, which includes health insurance, college tuition etc.
One of the other great things about Starbucks is that it is continually training anf retraining its employees. These benefits are funded by their premium
9. Higher Overhead Costs & More Amenities for Customers
Starbucks locations are always strategically placed in high traffic high value environments that are safe. This means the real estate that they occupy is very high priced, whether the building is owned or rented.
Unlike some other coffee shops, Starbucks allows their customers access to free WiFi and charging for their devices, plus a space where they can work comfortably. When all these amenities are taken into consideration, the customer is getting great value. All these extra amenities must be paid for in the company’s monthly overheads, hence prices must allow for the company to recoup their expenses.
10. To Support Worthy Causes
Starbucks is a great example of a socially conscious company. The chain not only invests in its employees, but also in other segments of the society. Starbucks is a longtime supporter of the US troops. Army veterans often recount how the company sends care packages to troops on various battle fronts, helping keep them alert and awake in combat.
The expensive Starbucks that you’re drinking helps support farming communities that grow coffee, tea and cocoa. Starbucks’ Coffee and Farmer Equity or C.A.F.E program supports farmers and agricultural communities by helping them implement more sustainable farming practices.
How Does Starbucks Pricing Compare To Other Coffee Shops?
Starbucks coffee is priced about 38% higher than its competitors. Most of the company’s products are around $6 for a medium cup, whereas its competitors are on average $3.50.
For example, at Dunkin’, a small coffee is priced at $1.59, whereas at Starbucks the similar option is $2.95.
A small Dunkaccino ( Dunkin’s version of a frapp) costs $1.69, compared to Starbucks’ smallest frappuccino which comes in at $3.95.
How Can You Save Money At Starbucks? (Use Rewards)
While the cost is justified, not all of us have $8 to $10 to spend on coffee on a daily basis. One of the ways you can save money with Starbucks is to sign up for the company’s loyalty programs.
You will earn points for each purchase and can use the points to purchase drinks when you have enough. In addition, if you download the company’s app, you will be able to access deals and offers that they have from time to time.
In addition, by sticking to the basics and avoiding add ons with your purchase, you can save money. A basic cup of coffee is way cheaper than a frappuccino with whipped cream and almond milk. Choosing a smaller cup also helps.
Final Thoughts
Starbucks is more expensive than its competitors, but the company justifies its pricing by providing a great product and innovative customer experience. The company also reinvest its profits into worthy causes, which is admirable.
If you want to save money at Starbucks, sign up for their loyalty program and avoid adding extras to your order. Sometimes, the simplest cup of coffee is the best.