The week before the cafe opened last August, my Dad cut an article out of the Australian Newspaper’s Milk Crate segment, entitled “Reusable Coffee Cup Discounts Not Sustainable”. At the time, the cafe was intending to open as a Keep Cup only cafe in order to combat the waste associated with disposable cup usage.
It was a noble, ideological notion of mine but within 3 weeks of opening, our customer base had spoken loud and clear – they wanted the option of a disposable cup. As a new cafe, we could not afford to lose the 10 to 15 customers each day that would go elsewhere for their coffee in order to obtain a disposable cup, so our coffee roaster came to the party and provided us with the cups and lids we needed to satisfy our customers.
We opted to place a surcharge on the disposable cups, rather than giving a discount to those bringing their own cups, and this article really highlights the economics behind that decision. Before we do the math though, here are the emotional reasons why we charge a surcharge for the single use cups at Our Ruby Girl.
- Rewarding the people doing the environmentally responsible thing is great and important, but at the end of the day it isn’t their behaviour that needs to change. It is the behaviour of those in the single use community that is requiring a shift. Rather than incentivising the good, we chose to add a surcharge as a disincentive.
- Choice. Hospitality is all about providing options and charging for disposables allows us to offset the costs of our reusable options, namely our boomerang mugs (which you can borrow and drop back to the cafe) and our RTRNA Cups. These magic creations can be borrowed from us (for a $5 deposit) and then dropped back to any other participating cafe to get your $5 back!
The economics are outlined beautifully in the Milk Crate article. The cost of goods sold to provide a customer with a coffee has increased around 400% since 2000, while the price of a coffee has risen about 25% in the same amount of time. Further, as a nation our coffee habits have changed. We are drinking stronger coffee and our palettes are demanding better quality milk and beans. The squeeze this has put on the whole coffee chain, from growers to roasters to cafes is tangible. Honestly, cafe’s can’t really afford to absorb a discount for people bringing their own cups. The profit margins in hospitality are so small as it is, discounting an already marginal item just does not make sound business sense.
We love that so many of our customers choose to bring their own vessels, be it Keep Cups, a mug or even a jam jar! The technology has come so far – people can now pay for their coffee with the bottom of their cup – that there is less and less reason for people to choose a disposable.
We will continue to provide as many options as we can to make the choice even easier and are always happy to rinse your reusable cup when you come in for a refill.
See you in store,
