Why Is Iced Coffee So Expensive?

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The difference between hot coffee and cold coffee goes way beyond temperature, Kurt Soller explains. Cold-brewed java is a whole different production. Here are four ways the chilly stuff is more expensive to make.

1) It takes more coffee and more time: "Cold-brewing involves mixing pulverized beans with water, but the latter process requires about twice as much ground coffee," Soller reports.

2) It takes more paper. Clear plastic cups are twice as expensive as paper cups. Straws are another expense. And the condensation requires more napkins per customer. "My paper costs, which include cups and straws, increase by about 20 percent," one owner told Soller. "Summer stresses me out."

3) It takes more machines. "Renting an ice machine, a common practice among cafés, costs up to twelve bucks a day," Soller reports.

3) It takes the same mark-up on a higher-cost item. "For a coffee shop to thrive, its owners must keep their cost-of-goods around 28 percent of menu price." The hardest part is just making sure we're prepared for cold brew," says Caroline Bell, co-owner of four Café Grumpy locations. "You've just reminded me I need to order more plastic cups."

Source: Yeko Photo Studio/Shutterstock

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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