Coffee prices in the UK

I've read a few blogs, had a few conversations, and caught a few tweets lately that were unconnected but all seemed to stem from to one common concept... the notion of referring to "the UK coffee market" as a discrete, singular entity; something that can be generalised about.  Here's an example relating to a fairly common debate :

My own humble opinion is that the UK public, if I had to generalise, is not convinced that coffee prices are too low or that despite the ongoing economic problems an increase in their daily coffee spending would be an acceptable hit because man, that coffee is just so worth it.  Granted, if you break down the UK into regions then in some areas there is greater understanding of speciality coffee coupled with greater affluence, and the micro-market (of consumers) in those areas would quite probably accept higher coffee prices. I'm talking about areas of London primarily, which over the past 5 years or so has developed a thriving speciality coffee scene. But London is London and nothing more... it is not the entire UK and is certainly not representative of other regions. It is infact the minority.  The majority of the UK coffee market... the "public" if we are generalising... aren't there yet. Very often people who passionately devote their lives to working in speciality coffee lose the ability to see the world from a non-devotee's perspective. 

You cannot just increase price. Whether the price of something rises or falls is due to 'demand and supply'. People often use that phrase but have never had the most important part explained... the equilibrium price. We all know that as the number of people who want to buy a product increases (table 1), the price rises.  Conversely if lots of suppliers enter the high street selling the same thing, then the price will tend to fall (table 2).  If you put the demand curve and the supply curve together then there is a point at which the meet. At that point the demand for the thing being sold (eg speciality coffee) matches the amount available from shops/suppliers, and the result is basically a price at which everyone is happy.

Table 1

Table 3

Table 2

I agree that baristas deserve to be paid more. I also agree that as the quality of coffee increases, and farmers adopt better production methods, this should be reflected in the price they are paid. This in turn does need to be passed on to consumers. But simply increasing price will not work. Before a price increase will be tolerated, much more work is needed to increase public understanding of the distinction between commodity coffee and speciality coffee, and the value of that distinction.  Without this, an increase in price will result in a decrease in demand for speciality coffee. The market will stall, and good shops will not survive because customers will not perceive any reason to pay more what they think is 'just coffee'.

I haven't yet visited Colonna & Smalls in Bath, but it is clear from everything they do that communication is first and foremost. For a classic example see this post from their blog. Their communication is what enables them to distinguish their speciality coffee in the eyes of the public. In turn it will, I have no doubt, allow them to quite rightly charge more for what is a higher quality product. They do not simply increase price. 

The extent to which those in the speciality coffee industry need to invest time and money on effective communication depends upon how mature the market is in the region their business serves. In the part of Scotland where I live the phrases "single origin", "pourover" or "varietal" mean nothing to the coffee drinking public. The perception is that high street chains surely do it better than anyone (even though there isn't one within an hour's drive!), men of a certain age will demand a white coffee & refuse to order a latte because using fancy names makes them uncomfortable, and the average salary is around 40% lower than that of their London counterparts (1).  Things are changing, of course. Scotland is experiencing its own coffee revolution, fueled by entrepreneurial people in the main cities of Edinburgh and Glasgow. But again, Edinburgh is Edinburgh and nothing more. It has its own demographic groups. There is no 'UK' speciality coffee market - just a collection of small and distinct markets that are not yet joined up.  It will take time. Let's not get ahead of ourselves please, and for God's sake let's stop referring to London as the UK.

Notes
1. http://www.guardian.co.uk/news/datablog/2011/nov/24/wages-britain-ashe-mapped#_