Espresso Economics
I’ve always been a coffee nerd, so even on vacation I hunt down the best local brew. Right now I’m in Lombardy for two weeks, and every morning I make the ten-minute drive through rolling hills, park in the town square, and stroll down a sunlit cobblestone street to a tiny corner caffè run by my new friend Mario.
If you’ve ever seen someone pull an espresso shot like they’re running a conveyor belt at a fish factory; fast, precise, and without breaking stride, that’s Mario. He knows every regular by name, serves each cup with a cold nod, and rarely cracks a smile. He grinds the beans like a pro, locks in the portafilter, and in seconds pours a stream of liquid velvet, crowned with peanut-butter-thick crema..
As I have all the time in the world I sip my first cup slowly, enjoying observing Mario and his regulars. I wonder how business is doing. Can Mario make a decent living on shooting out small cups of espresso all day with the occasional cornetto on the side.
Each cup that Mario serves is €1.30. Back home in Reykjavík, I pay 690 ISK per cup—about €4.80 at today’s exchange rates. That’s more than 3X the price for the same 30 ml of pure black magic. My brain did the obvious thing as it does when it is supposed to be on vacation: how on earth can Mario keep his prices so low and still cover rent, salary, machines, beans, electricity… everything?
After cup two on day five, I finally stopped pretending and asked: “Mario, how do you do it?”
He flashed me a grin and said, “I’m an Italian, my friend.”
Okay, fair enough. But Mario shared with me some of the details and soon I was scribbling those magic numbers on the back of a napkin:
*These numbers are my best estimates, but you get the idea.
Mario’s Break-even Volume: ~2,247 cups/month
My Reykjavík Café’s Break-even Volume: ~2,263 cups/month
It turns out both cafés need to pull the same 2,250 shots a month to break even—but Mario’s rent, wages, and overhead are literally a third of what they are back in Reykjavík. So he isn’t some coffee wizard pulling profit out of thin air; he’s wrestling the same grind as every barista out there, just with a friendlier cost of doing business.
Here’s my takeaway:
“A €1.30 espresso in Lombardy isn’t cheap and a €4.80 espresso in Reykjavík isn’t expensive. It’s all in the context. Next time you see a price that surprises you, remember to look beyond the cup.”
