Tuesday, May 30, 2006

what are the costs/benefits?

i've been thinking about the economics of coffee production. trying to figure out whether a machine like the clover would be worth my coins. here are some of the things people have said about it:

it's unbelievable.

it's amazing.

it's the best thing to happen to coffee since, oh, ever.

it's the espresso machine of coffee and will cause the barista to need skills to adjust and work with it.


now that's the hype. let's talk about the economics of the machine. for $8000, what are you really getting? an h.d. holographic wificasting plasma t.v. (no such thing, of course, but go with me), or a bigger t.v. remote that has a "125" button so you don't have to press "1, 2, 5"?

and since i enjoyed the comparisons between the french press and the aeropress in some earlier posts, i figured why not swing the pendulum the (way!) other direction and compare the press to what is being marketed as the ultra high end of coffee preparation in the clover.

with so many clover dollars on the line it almost has to come down to a cost/benefit analysis. but first, a couple disclaimers. off the bat i should say that i have never used a clover, never tasted a clover cup, never seen a clover in person. (thank you, texas, for being coffee's geographic equivalent of tattooine.) second, i should note that the reason i am in this uninformed position is because the folks up there at clover have evidently been too distracted by such "major" events as "world barista championships" and "sleeping" and "eating" to bother to return any of my phone calls to ship out a free demo machine to said center of the coffee galaxy, namely, my house. [i make joke. me no askee clover persons for demo machine.] thirdly, and maybe lastly, i haven't thought this through exhaustively. you can think of this post along the lines of talk radio hosts, who come up with these outrageous positions on anything from jfk conspiracies to going cold turkey being good for the e.u's future economic expansion eastward just to get the phone lines filled up.

enough. on with the post.

what are the factors? everything here has to be compared to how clover would stand up versus its next "overall best" competitor. i say "overall best" because each of the major brewing systems present their own upsides and drawbacks. you have to choose one to best represent the competition. and because, to my mind, taste is king, we have to go with the coffee press. (though some would argue for vac pot; some for pour over; and so forth. not the point. just go with me.)

okay, yes, factors. cost per cup. time per cup brewed. generally expected lifetime of equipment. coolness factor. reliability of equipment (especially worthy of consideration in high volume coffee locations, versus high volume espresso locations and also because of their devastation to your operation if one goes down). is the clover necessary? indispensible? merely helpful? a good prop to have on the back counter to impress your friends? hopefully this smattering of factors can represent the lion's share for an accurate comparison.

if your initial price tag is $8000 how many cups do you have to sell at, say, $1.50, to even pay off the thing? or is that it? do you have to start charging $2 now? $2.50? just for a baseline, i'll use some numbers from my old sbux store. we averaged barely 17 uph on the "drip coffee" line. so on 100 transactions, only 17 actual units were coffee. compare that to some days when my espresso uph (any espresso beverage) was into the mid 90's and on some extra-hectic days during holiday season could peak up over 100. so let's say a generous 20 uph on 5000 transactions/week. if my calculations are correct (remember me hating math in school?) that's roughly $1500/week gross. at a stellar 50% flow through percentage it's about three months to pay the thing off. okay, not bad. not bad at all, assuming those killer numbers i posited. there again, using those figures, how much quicker would you have paid off your arsenal of presses and airpots (think stumptown) and been riding the gravy train?

time is definitely a big win for clover versus a press. less than one minute versus about four? total prep time from a dead start has got to be maybe an additional minute (pulling the beans, grinding, prepping them, cleanup).

lifetime of equipment? who knows with clover. already it's gotten an upgrade. not because of deficiencies, i don't think. just improvements on the design. if you've got the bucks to drop on a first gen clover how long will it likely be before you start getting upgrade lust? not long, i trow. compare to the press. the press wins. get yourself a classic press design and you're in business for a long, long time. i think of bodum's chambord line or the cafe paris design. uber classic. uber chic. uber sophisticate. and, relative to the electric coffee box named for a weed, uber cheap.

you gotta hand it to the folks up there at clover hq. they pretty much got 'em right where they want 'em in terms of fans and buyers. even at that price, they are probably picking up enough sales to keep them in caviar and dom perignon. is it marketing? is this new product deemed indispensible by those in the know? or is it just the must have new toy that will eventually be just like the eight track or the cassette player or the home camcorder that you had to have someone help you strap onto your back like you were atlas?

can you be "old school" and still use a clover? (is that a stupid, irrelevant question?)

seriously, is it really that much cooler? better? evidently, these will only ever be rhetorical questions, as my pleas for a free machine have fallen on deaf ears. the nerve.

the phone lines are starting to come alive. discuss.


At Wednesday, 31 May, 2006, Anonymous Stephen Leighton said...

I was in the same camp all hype it cant be that good, until Bern and now I'm searching for loose change in the back of my car, and down the back of the sofa to try and find neough to buy one.

I want a clover and I want it now!

At Wednesday, 31 May, 2006, Anonymous t o n x said...

I've been a willing participant in a lot of that hype - and I'll state again that it is completely warranted.

Is it for everyone? Certainly not. If a shop is not buying great green or doing great roasting the Clover is not going to save them. But when it comes to expressing world class Cup of Excellence caliber coffees, you will find the Clover delivers the full clarity and nuance of the coffee in a way that no method (other than perhaps careful cupping) can reliably and repeatably deliver.

As for price - in comparison to the high end of espresso machines it is not unreasonable and offers a similar throughput. Factor in how it can improve whole bean sales both through its truer expression and its ability to quickly provide a sample of any bean in your line-up, (particularly those premier coffees which you would never dream of tossing in an airpot), and how running a Clover can differentiate a shop from the inferior competition - I think it makes a good case.

The price is not about keeping the Clover guys in caviar but a reflection of the long research and development process and the honest expenses of engineering and small scale machining. I would imagine that as Clover grows and manufacturing them gains efficiency we could see the price start to come down.

You should get your field trip on and come up to Seattle and check it out...

At Wednesday, 31 May, 2006, Blogger blanco said...

hey tonx. i was just thinking about you the other day. really, i was. it's nice to "meet" you. i've been looking at your flickr pics for a while and reading about your victrola exploits.

i was actually going to reach out for you to discuss the possibility of me buying or using some of your roasting pics for use on my up and coming wholesale/retail website. if you would be interested in hearing about that you can drop me an email at browncoffeeco (at) gmail (dot) com. thanks!

meantime, i meant to talk about the economics of clover in those terms you were referencing above: how supply and demand will dictate the market price; how once they reach critical mass (whatever that looks like at this level of the industry) the price falls start happening.

i certainly didn't mean to imply the clover folks were highway robbers. and certainly not that anyone--me least of all--would begrudge them if the caviar and $10 beers were flowing freely at clover hq. by all means!

i guess my point was they understand the game well both in terms of engineering a quality product and how to market it to the right demographic.

i want to be a fan. i am a geographically-impaired fan. i guess at some point soon i will maybe get my field trip on and jump on up seattle way. i'll let you know if/when it happens so you can show me the ins and outs of the seattle coffee and espresso scene.

At Friday, 09 June, 2006, Anonymous Rich said...

found this post from its link on the forum that shall not be named...
We're not sure what to do ourselves. Pittsburgh is prolly a lot like your town in TX - closest Clover to us is an 11-hour drive to Chicago (although word has it one may be coming to the DC area soon). We tasted Kenyas at all three Clovers at SCAA. Unfortunately, I'm not a big Kenya AA fan in the first place, so the nuances were lost on me. But I understand the arguments for this.
However, much as Alistair and Tony and Nick talk about increasing bean sales, I wonder if that's just a temporary blip - after all the consumer can't make Clover-quality coffee at home, so will they be willing to buy more beans on each visit? Maybe so, but the logic isn't very compelling.
And Nick's point on Clover eliminating the waste of offering several drips doesn't hold for shops that don't push drip and uses presses or pour-overs instead. (We use drip, but our waste is manageable).
Like Murky, we also don't roast ourselves (we offer Intelly and occasional guests), so we're really at the mercy of Intelly as to whether we get CoE's and microlots to play with.
I guess there are marketing benefits to being first on your block with the new toy... but we're also first on our block with great espresso and we're still driving a 14-year old Saab with 150,000 miles.
Anyway, sounds like the kids in the PNW are having all the fun...

At Friday, 09 June, 2006, Blogger blanco said...

hey rich.

thanks for visiting and for leaving your comments. i love having guests!

whole bean sales are the coup de grace in this industry because statistically those are your most loyal customers. they will come back to your store more times per week once they catch the whole bean bug and--because they are now into beans, of course--they will spend more each visit.

although i'm a little like you in that i would think that clover's main draw should be the taste in the cup (and for us geeks it is; but for the masses we all know it's not) i'm perfectly okay with the appeal to clover owners being higher bean sales because you're still giving customers a new experience they can't duplicate anywhere else. i mean, hate to say it, but it really doesn't make a statistical difference that they can't replicate the taste at home. that only drives them back to the source more often. in that sense, clover is maybe instrumental in expanding the experience base of the masses, not for the reasons we initially think they would be expanded, but expanded nonetheless.

is that a total ramble or what? sorry for the buckshot response. i may be up in chicago over july 4 week and if so i'm definitely going to check out clover and intelligentsia. try twenty hour drive for us!


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