For $45 Per Month, All the Coffee You Can Drink

http://www.businessweek.com/articles/2014-04-15/for-45-per-month-all-the-coffee-you-can-drink

by sschwartz • 12 years ago

93 115 12 years ago

businessweek.com

AndyBaker• 12 years ago

Once it's free - I'll bet you drink 2x as much.

ctdonath• 12 years ago

Article says the increase is about 20%.

aestra6• 12 years ago

Yep. The article said there is a similar program in Israel.

“They say they’re drinking more coffee than before, about 20 percent more,” says Rotem (who, by the way, drinks four to six cups on a bad day). “Our users save around 30 percent on coffee.”

mikepurvis• 12 years ago

The word "user" seems strangely appropriate.

AznHisoka• 12 years ago

Great! Too bad I drink 0 coffees a month. It gives me panic attacks, and makes me pee-pee/boo-boo twice as much:(

nathanmock• 12 years ago

What's to stop me from buying coffee for all my friends as well?

aestra6• 12 years ago

Morals?

That's a really good point though. I wonder how many people will get a coffee for a friend waiting outside on their subscription or even split a subscription.

sschwartz• 12 years ago

The last paragraph of the article says, "For whatever it’s worth, fiendish subscribers must adhere to at least one limitation: They must wait 30 minutes before ordering another coffee."

rzt• 12 years ago

Yes, there is that limit –– and a good one. You could get around it maybe if you were with some friends doing a klatsch with staggered drinking rates and drink start times, but then you'd just look really cheap.

ahoy• 12 years ago

Espresso as a Service? I like it.

applecore• 12 years ago

For $45 per month, you only get regular brewed coffee. Unlimited espresso is $85 per month.

aestra6• 12 years ago

Significant savings for some.

If you had a 2 cups a day coffee habit, this works out to about $.73 a cup or $1.45 a day. Pretty good deal if you like coffee shop coffee.

Assuming you'll otherwise spend $3 per cup you'll save about $1657 a year. $2190 vs $532.90.

pwthornton4• 12 years ago

The coffee included with the $45 plan (there are two tiers), is not $3 coffee. It's black coffee. In DC, a small drip coffee or pour over runs around $1.80 or so. It's $85 a month for the plan that includes lattes and other more expensive espresso drinks.

A small latte usually runs around $3 or so. An espresso might be $2.25-2.50. Two small lattes a day (not a lot of caffeine) would save you a ton of money a month with this plan.

If you drank even one cup of coffee a day, you'd save money with this, with either plan. A lot of people drink a cup in the morning and the afternoon, and that's where the savings really add up.

I'd personally be more interested in a hybrid plan that got me unlimited black coffee and a certain amount of espresso drinks a month. I know they have a more expensive plan with espresso drinks, but I don't want that daily. How about a $65 plan?

It's a great idea though. If you live and work in an area with coffee shops supported by this, you can basically have a monthly fee that covers all of your coffee needs. You can also no longer worry about having any coffee equipment in your apartment. Saving space is important to city dwellers.

If this came to DC, I'd strongly consider signing up for it. It's a great way to encourage people to go to non-chains, and to make paying at non-chains easier. Many of the big chains, including Starbucks, have long had ways to pay for drinks with an app. That's part of what this product does, and why small coffee shops would want to get on board.

aestra6• 12 years ago

A small latte usually runs around $3 or so. An espresso might be $2.25-2.50.

I don't live in NYC and lattes are more like $4-$5 here.

mertd• 12 years ago

By "pourover", they don't mean machine drip coffee. It's the coffee a barista individually brews per order on a pourover cone. I've never seen it cheaper than $3, including DC.

aestra6• 12 years ago

I just did some price research and it looks like coffee shop coffee in NYC will cost you $1.50 to $3. Regular coffee.

jasonkester• 12 years ago

Cool idea, but it seems to target a pretty narrow demographic:

  - wealthy enough to live in NYC and buy at least 
    one cup of coffee every single work day

  - cheap enough to want to save a few bucks a month on coffee

  - can't be bothered to carry a credit card around every day
 
  - can be bothered to carry a smart phone around every day

  - trendy enough to frequent NYC coffee shops

  - untrendy enough to be seen using "coupons" in public
 
  - techy enough to consider installing a coffee buying app 

  - non-techy enough to not have built a crazy $10k 
    coffee roasting-grinding-brewing setup at home

Fortunately for them, starting in NYC, that still leaves around thirty million potential customers.

It'll be fun watching this play out.

carlob3• 12 years ago

- non-techy enough to not have built a crazy $10k coffee-brewing setup at home

I have an espresso maker (admittedly much much cheaper than that) at home, but I still drink coffee out throughout the day.

Though I also must admit to the fact that I leave in Rome where an espresso is 70-90 cents and consistently good.

adambenayoun3• 12 years ago

I own 3 espresso machines and have access to 5 no matter where I am (Splitting my time between Tel Aviv and the bay area) and I still drink coffee outside.

aestra6• 12 years ago

Fortunately for them, starting in NYC, that still leaves around thirty million potential customers

The population of New York City (5 boroughs) is 8.337 million people.

The population of Manhattan is 1.626 million people. During the day, commuters from the other boroughs and outside the city nearly double Manhattan’s population to 3.1 million people.

I can't imagine them doing this outside of Manhattan, but even if they do according to the Metropolitan Statistical Area, the entire population of the New York metro area is 19.9 million people.

The entire population of New York State is 19.651 million people.

untrendy enough to be seen using "coupons" in public
can't be bothered to carry a credit card around every day

Where do you get this from?

wealthy enough to live in NYC and buy at least one cup of coffee every single work day

Brooklyn has more affordable housing and is becoming gentrified with a median per capita income of $43,567. It's easy to commute to Manhattan from some affordable neighborhoods.

http://www.slate.com/articles/business/moneybox/2014/01/new_...

halflings• 12 years ago

I think that was a joke, suggesting New York is a lair for "ironic" people (I guess).

mseebach7• 12 years ago

Addressing your points 2-7: This clearly isn't a revolutionary, disruptive startup, it's a clever play to incrementally remove a little friction, but every little helps. It may not remove enough friction to be worthwhile, but I can't fault them for taking a shot.

Point 1: As you suggest, that's probably not such a small population to start out with, and it's not like NYC is the only coffeedrinking city on earth, or that coffee is the only drink enjoyed by city-dwellers.

Point 8: There's almost no point in paying insane NYC rents if you spend the majority of your time in your apartment.

george21• 12 years ago

Do you think the market is limited at first is an initial wedge for them? What's to stop them from later creating other properties related to topics like fitness, or eating out for example?

prostoalex• 12 years ago

The model is scalable outside of NYC, and "can't be bothered to carry a credit card around every day" critique can be applied to any service that tries to improve payments flow (Square, Starbucks' mobile app).

On "techy enough", for reference, 11% of Starbucks purchases is happening through their mobile app - http://news.starbucks.com/news/starbucks-accelerates-mobile-...

Patrick_Devine2• 12 years ago

It's not quite like having a coupon or carrying a credit card, but more like insurance. You're insuring that the maximum you'll pay for coffee every month is $45. If you think of it that way, it's a pretty good deal, and doesn't come with a ton of friction (you're more than likely already carrying a smart phone). Now you certainly could pay less than $45/month on coffee with coupons, but this takes away the hassle from both the consumer and from the coffee shop.

I'm curious if the discount being offered to individual coffee shops is negotiated or if it's a flat rate. I would imagine that each shop charges different amounts for a cup of coffee, although maybe it falls around some uniform distribution. Certain locations probably skew one way or the other though; does a cup of coffee cost more or less in midtown or the financial district than SoHo?

nitid_name• 12 years ago

Doesn't every coffee place in NYC use the same blue coffee cups?

I haven't been in awhile, but I remember the slice of pizza being pretty consistent from shop to shop and something about it being related to the cost of the subway. I could imagine coffee having a similar pricing scheme throughout the city.

dec0dedab0de• 12 years ago

I wonder how they disperse the money to the various shops.

Edit: From the website "We pay you for each drink purchased at your awesome coffee shop "

jon_black3• 12 years ago

For $0 a month you can drink water from the tap. It's healthy and doesn't require installing an app.

(Psst. You should be finding ways to balance your diet, not contribute to its destruction.)

jrockway• 12 years ago

https://en.wikipedia.org/wiki/Coffee#Health_benefits

pbhjpbhj2• 12 years ago

and don't forget to read the following section on https://en.wikipedia.org/wiki/Coffee#Health_risks .

Anecdotally I've found I'm more alert [in the mornings particularly] without caffeine but cutting it out hasn't helped me normalise my sleeping patterns.

jon_black3• 12 years ago

Coffee isn't poison! YAY! Oh...wait...but...

https://en.wikipedia.org/wiki/Coffee#Health_risks

Seriously, my point was, whilst everyone ran around hyperventilating at the thought of saving money on coffee (oh my god oh my god oh my god cheaper coffee) they (possibly - I didn't perform any research) overlooked the quite probable (I'm actually not a mathematician) fact that they're already drinking too much, and such a scheme will cause them to drink even more (up 20% you say?).

I love sarcasm. I hope I didn't offend anyone. I'm in a weird mood today.

QuantumChaos2• 12 years ago

Coffee is good for you.

http://en.wikipedia.org/wiki/Coffee#General_health

hiphopyo5• 12 years ago

Those health benefits are more for people in their 80s. The coffee bean is actually a poison that the coffee plant uses to deter herbivores. Not to mention a recent Danish study that suggests pregnant women should abstain from caffeine as it's lethal to the fetus.

jp5556• 12 years ago

Coffee is very good for you.

Water from the tap is not free, it is a cost everyone pays in some way or another (built into rent or part of property taxes). Even if you still live with your parents, a dollar they spend on the water bill is a dollar less for you.

mseebach7• 12 years ago

Tap water for drinking is effectively almost free, and free water fountains are indeed ubiquitous. It's the two 30-minute showers a day that kill your parents water (and heating) bills.

jon_black3• 12 years ago

Coffee is not VERY good for you. That's a story you tell yourself so you don't have to stop drinking it...because you can't stop...you need it...you're life would be nothing without it. GRRRR...I'm so itchy without my morning...uhhh...water.

Yes water costs. Jesus, point out the small things.

pwthornton4• 12 years ago

Let us know how your $0 a month diet works out for you.

adambenayoun3• 12 years ago

I'm a huge espresso lover - made sure to have an espresso machine everywhere I spend more than a few hours (office x 2, apartment x 2) and I still find myself buying coffee when I'm outside.

I've used them while in Israel (and I know one of the founders), I only have good stuff to say about them.

There are 2 benefits from using it, obviously the first one is the huge cost saving but the second is the fact you can drink at several places and you get to discover some good places.

When you pay for your espresso sometimes you tend to stick with the place you know have good espresso, however with CUPS I get to visit new places from time to time (mostly when I see on the app that a nearby cafe is a member) and I get to experiment with new blends.

Also I found that some places have amazing savings for members - some places will give you drinks and other things at a discount and usually will welcome you as a regular (meaning you get a better service).

I hope they spread everywhere and make this an international membership meaning if I visit NYC I can use my app from Israel.

pacofvf• 12 years ago

I've never though about it, but what Americans call "regular coffee" in my country is called "American coffee". When I ask for a "coffee" I probably get a latte or in Spanish "café con leche".

mseebach7• 12 years ago

Not quite. The "Americano" (espresso with hot water) common in countries with the espresso coffee culture was invented during WW2 when the GIs requested bigger cups of weaker coffee.

The american "regular coffee" is (weak) drip brewed coffee.

deltaqueue• 12 years ago

Getting a bit pedantic, but a few corrections:

1. That origin is just urban legend. Americanos started in the 70's.

2. Per ounce, you're technically correct about the strength of espresso vs. drip/brewed coffee. But brews have variable strengths, and most Americans drink 12, 18, and 24 ounce drip coffees (which ends up being more caffeine than even a quad shot of espresso).

jrs993• 12 years ago

reminds me of a seinfeld episode.

neverminder• 12 years ago

When I used to live in Norway you could buy a coffee cup (an actual cup) from Statoil (petrol station) and you could drink free coffee with that cup forever (in Statoil stations of course). That was 7 years ago though, so it could have changed by now.

mseebach7• 12 years ago

I'm pretty sure that's still a thing (in Denmark at least). It's a different economic proposition, it's more of a "loyalty program" to make Statoil the default choice for gas than an effective way to pay for coffee. Also, the quality of the coffee wouldn't be competitive in NYC, to put it politely.

hiphopyo5• 12 years ago

Forever? So people who bought it back then can still drink for free? If you buy it now it only lasts for a year I think.

crazygringo• 12 years ago

Interesting. At least one coffee shop in NYC has already done this on their own, for only $25/mo (but it's only one location):

http://www.yelp.com/biz/fair-folks-and-a-goat-new-york-2

adambenayoun3• 12 years ago

Ditto. What makes me excited about their model is that this is working across several cafes in a neighborhood.

thisisauserid• 12 years ago

The subscription only gets your their ice coffee which is amazing and incredibly strong. Everything in both of their stores is for sale (maybe even including the furniture) but yes, only one location has a cafe.

achompas2• 12 years ago

Fair Folks is great. I live in the area and stop by all the time. Make sure to get a cup if you're on Houston.

hiphopyo5• 12 years ago

Wait, before you all drink up, check out the CAFFEINATED documentary (the actual documentary starts at 4:19). Ever wonder why Barack Obama doesn't drink coffee?

Pt. 1: https://www.youtube.com/watch?v=0OecTZBjFvw#t=259

Pt. 2: https://www.youtube.com/watch?v=qncmE7O7wg4

nfoz• 12 years ago

I'd prefer a link to some scientific discussion about the problems with caffeine.

hiphopyo5• 12 years ago

Same here. I love coffee but as with other drugs I get this vague notion that it's not always good for me. There's plenty of research over at http://pubmed.com and http://liebertpub.com if you're interested.

http://edition.cnn.com/HEALTH/library/caffeine/NU00600.html

rainmaking• 12 years ago

This sounds like a devilish proposition, only surpassed by "All the amphetamines you can ingest".

I like it :)

dvcc• 12 years ago

$45 is not for the usual Starbucks Double Grande White Chocolate Mocha with soy milk and two shots of vanilla flavoring, that would be $85. With at around a 8% discount (rewards) and a price of $4 per drink it comes out to around 23 drinks. Or 1+ per weekday for the same amount.

Not the greatest deal for those users I guess.

duaneb• 12 years ago

How does this improve over a french press and $15 of coffee grounds?

r00fus• 12 years ago

Time saved in procuring said grounds, making the coffee, cleaning the press, increase in variety and availability (many locations) and likely increase in quality depending on your skills/preference.

jaynos• 12 years ago

No need to carry a french press and coffee grounds (and hot water source) when you wander outside. Yes, coffee is cheaper if you make it at home, but people still go to coffee shops.

Dirlewanger• 12 years ago

People don't want to take the time/resources to invest in making it themselves. Simple as that. Some people are fine (stupid?) with paying for the convenience.

rickdale• 12 years ago

This is great. I wish I could get this in the suburbs, with Tim Hortons on delivery.

Recently I purchased a Keurig k-cup brewer. The machine wouldn't always pump out water, so thinking I was screwed I ordered another Keurig brewer, this time the Vue. $150 for the first Keurig, $100for the second. In the meantime I purchased bullet proof coffee to give it a shot, thats an extra $45. So, in a matter of 1 week I spent about $300 on just getting my home coffee situation together. And I still go to Tim Hortons on my way home from purchasing coffee at the grocery store, or if I am out.

FWIW, I called Keurig thinking they wouldn't do anything and they sent me a brand new k-cup brewing machine that is in a box right next to me. But I do love my K-Vue machine, its the best single cup @home experience I have been able to find and I probably drink about $45 worth of coffee out of it each day.

dllthomas• 12 years ago

The fact that this spans multiple coffee shops is the most interesting thing here, I think.

andrenotgiant• 12 years ago

This will only exacerbate an existing problem at coffee shops in NYC: The "Coffice" phenomenon where people use the coffee shop as their office.

Now these people will feel justified basically becoming a tenant of coffee shops and leeching 4-5 coffees a day, leaving this startup with the empty CUPS. :)

ASneakyFox• 12 years ago

I think their counting on gym membership style thing. Though even if people drink a lot of coffee.. it still is just coffee.

EC1• 12 years ago

I never understood the coffee shop thing. I hate working at coffee shops, people nosing around at what you're doing, never enough desk space, that feeling of guilt once you stay there too long, etc.

oftenwrong• 12 years ago

And the poor ergonomics of a laptop

SyneRyder• 12 years ago

For me: I work solo from home, so sometimes I go to the coffee shop for a change of atmosphere & to be around people for a while. I find the white noise of the cafe helps me focus, as does having people around me. It's nice having someone serve you instead of having to make your own coffee/food, and sometimes the food is nicer than what I'd make myself at home. But I try not to stay too long & only go at times when the cafe is half empty.

drcode2• 12 years ago

As someone who works out of coffee shops a lot, there is pretty much ZERO appeal for me to use this kind of service, since I view my coffee costs as "rent" and prefer to pay full price plus a tip to be viewed as a good customer.

Bringing in an app saying "I'm a cheapskate that doesn't want to pay full price" is not the message I want to give to coffee shop staff.

josefresco2• 12 years ago

But working from their coffee shop is? I would think a "good customer" to them is someone you walks in, buys coffee, and then leaves. Sure it helps that you probably meet people there (expanding their reach) but a half dozen people setting up camp in your coffee shop all day can't be ideal.

Theodores• 12 years ago

Actually, no... It is the 'empty restaurant syndrome', you have probably done it yourself, in some strange town, not knowing where to eat, you go past a few places and choose one that other diners have also chosen, walking past the empty place as if it has the plague.

Hence a few customers that hang around for a while are good for drawing in other customers.

drcode2• 12 years ago

I would think a "good customer" to them is someone you walks in, buys coffee, and then leaves.

No, that would be a "great" customer in their eyes. I am merely trying to not be a jerk of a customer, while still spending some time working in their shop.

devindotcom• 12 years ago

Yeah, I do this too, though I try not to stay for more than two or three hours, and make sure I always have something in my cup. Fear of getting overcaffeinated drives me to other places.

I do think a shared promotional community between the coffee shops around here (Seattle) would be good, but most are doing pretty well so no one feels any pressure.

jayvanguard• 12 years ago

Are margins on coffee good enough to support this long term? High end coffee is quite expensive as is square footage in small trendy coffee shops.

I suppose the odd abuser who parks their butt for 3-4 hrs a day in the coffee shop can be dealt with in other ways e.g. they must order food to keep a seat. If they are forced to walk to the coffee shop each time they will likely max out at a few coffees a day.

pwthornton4• 12 years ago

I would imagine they are going to try to aim this at the business crowd. My coworkers and I often go and get coffee together. We almost never actually sit down. We talk on the walk to and from the coffee shop. We might take the coffee to a nearby park.

I agree that this won't make business sense with people who use coffee shops as an office.

jonnii• 12 years ago

If they can convince Zibetto on 6th Ave to sign up I'll immediately give them $45/month. It'll save me a fortune!

Thiz• 12 years ago

I am not a coffee drinker but this is what I do when I crave for one:

Two cups of water in a blender. Add a teaspoon of instant coffee, a teaspoon of sugar, two spoons of powdered milk. Mix it all for ten seconds.

Pour in two cups. Put in the microwave for a minute.

Enjoy a delicious capuccino with a partner.

Cthulhu_3• 12 years ago

instant coffee

Begone, plebe! :p

D9u• 12 years ago

Not one cup of coffee in over 50 years...

When someone offers all the beer I drink for one low monthly price, I'll be signing up.

Cthulhu_3• 12 years ago

I'm sure there are several services out there that send you a monthly amount of beers, preferably different kinds and whatnot. If not, that needs to be a thing, :D.

agotterer• 12 years ago

I'm not sure this is possible in a retail setting. There are rules around incentivizing the purchase of alcohol. Which is why you don't see promotions like buy one get one free... with the exception of happy hour and bottomless brunch sort of deals. Which have a whole different set of rules and exceptions.

themoonbus• 12 years ago

Does everything need to be made into a monthly service? In the past day, I've seen razors, coffee, socks...

drivingmenuts• 12 years ago

That 30 minute limit would be the dealbreaker for me. I often drink one cup just to get caffeine in, then immediately start another for either flavor or more caffeine or to have something to do.

Cthulhu_3• 12 years ago

$45 per month? I get free coffee at work.

Well, I do now, they only recently changed the coffee machines to ones that produce drinkable coffee. Before that I'd spend money to get decent coffee, probably far more than this service is offering. Starbucks etc in this country charge much more for regular coffee, probably due to a much lower volume / amount sold.

lnlyplnt• 12 years ago

I used this service while I was in Israel, and it's really amazing. CUPS pays the coffeeshops for each cup you consume, so the shops treat you like a real customer, not like a "groupon" customer. Honestly the biggest benefit is the spontaneity of it all "should I get coffee? eh fuck it why not."

achompas2• 12 years ago

If you're in NYC and want a good cup of coffee, check out one of these places:

Third Rail (got me through my first semester at NYU)

Stumptown (I'm usually at the 8th St. spot but the Ace Hotel location is just as good)

Joe

Cafe Grumpy

Everyman Espresso

9th Street Espresso @ Chelsea Market

Note that none of these has signed up with CUPS. I doubt any of them will, either, since (I bet) there are thin margins in selling excellent coffee.

jasonmc• 12 years ago

I second every one of those Manhattan shops. Everyman is usually outstanding. Also recommend Gimme coffee.

In Brooklyn there's a few more gems: Budin, Strangeways, Parlor.

chm• 12 years ago

That's innovation. Simple, elegant, disturbs the equilibrium. Great idea!

xntrk• 12 years ago

As soon as the support more coffee shops in midtown i'm buying in.

The map they have of the indy coffee shops is something that does seem pretty useful. At least to me.

reddit_clone• 12 years ago

As someone who had quit coffee cold turkey a month ago, this thread is pure torture for me to read.

For $45 Per Month, All the Coffee You Can Drink

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