The Cappuccino Index

The Cappuccino Index

For a year or two I’ve had an idea lingering in the back of my mind, that I had done nothing with. I was in Seoul a week or so ago, and had a chance to chat a little with BK of Fritz Coffee. We’d talked about this particular idea, and he reminded me (rightfully) that I’d done nothing with it. This was the nudge necessary to turn this thought to action.

Last week I posted a few questions: Where in the world do you work? What do you earn per hour? How much is a cappuccino in your cafe?

Sprudge had done some extensive research on barista pay, that I wasn’t looking to replicate. I wanted to look at it in a different way:

How long does a barista have to work in order to earn a drink in their own cafe?

I felt that this question could, potentially, offer up some interesting information. Baristas in Australia earn more per hour than baristas in Lithuania, but to compare wages like for like fails to account for the difference in cost of living.

I decided to use the cappuccino in the cafe as a benchmark for a few different reasons:

– Just about every cafe serves a cappuccino
– Espresso isn’t a reliable metric as some places dramatically discount espresso to encourage consumption
– Coffee alone isn’t a fair data point – as it is often imported, and also traded against the US dollar. I wanted a local ingredient in there to balance out the impacts of currency and global trade

I didn’t know what I would find, and hoped to keep an open mind. However, what I did find has thrown up a few different interpretations which I’m going to look at as I examine the data.

At the time of writing this I had received over 700 responses from baristas around the world. Inevitably I wished I had had more.

Let’s start with the basic index. How many minutes do I have to work to earn a cappuccino:

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So – what does it mean, that a barista in Japan has to work twice as long as a barista in Denmark to buy a cappuccino in their own cafe?

Initially I looked at a cost of living index, to see if this would provide some insight. It did, in as much as it showed there wasn’t really a correlation between cost of living and the cappuccino index. Certainly, countries that had the highest cost of living (Switzerland, Australia) were the lowest on the cappuccino index, but there wasn’t strong correlation throughout. There was a rough trendline but it didn’t explain the data particularly well.

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I wonder then, if the cappuccino index could provide some sort of metric of the speciality coffee industry within a particular country. Australia has had a pretty long history of speciality coffee, and so the market is pretty developed. A more developed market might have lower drink prices (due to increased competition) but also higher barista wages (due to increased competition for qualified capable staff).

In Australia this worked well – but the US didn’t reflect this particularly well. The UK has a newer coffee culture than the US (with respect to coffee generally, as well as speciality) but a barista in the UK works 5 minutes less to earn the same drink.

At this point you’d be right to point out a flaw in the data. Countries where tips make up a substantial percentage of earnings may not have disclosed accurate data. I had asked what people earn per hour, and my issue with tips (well, one of my issues…) is that they aren’t guaranteed. They vary, and so it is hard to accurately factor them in to the idea of how long you’d need to work to buy a drink. Many people reported base wages (mentioning + tips) but others reported including tips too. In future I’d probably be more specific around this particular question.

However, the cappuccino index does speak – to some extent – to the “specialness” of specialty coffee. If it is out of the immediate reach of the people who made it then it is positioned in the market more as a luxury product. The countries at the top 10 of the index were Costa Rica, Russia, Poland, Romania, Malaysia, Taiwan,Turkey ,Ukraine, Mexico and Indonesia. I should note, several of these countries lack real data for respondents.

I live in a country that has an extremely uneven distribution of its economy. London is, in many ways, distinct from the rest of the UK. It’s economy didn’t suffer recession the same way as the rest of the country. It is disproportionately wealthy, and also distinctly expensive to live in. I wondered, digging into cities a little more, if this was reflected in the cappuccino index.

According to this survey a London barista earns, on average, 8.2% more money per hour than the average in the UK and 14.9% more than baristas in the rest of the UK. (The UK average excluding London). The average cappuccino in London costs only 7.4% more than the rest of the UK – so there is an argument that it is better to be a barista in London than outside. (The average barista in London earns a cappuccino 1 minute and 20 seconds quicker than someone outside of London). However, the cost of living in London is substantially higher than the rest of the country – so outside of the cafe your money doesn’t go as far.

I did also wonder if, within a market, the price of a drink in a cafe would be any sort of indicator of how they paid their staff. Does a place charging more pass this on, on average, to their staff. I had to look at this within a particular city (rather than internationally or nationally) because this is a very difficult question and the data looks very weak very quickly.

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I used London again, because I had more respondents from this city than any other. The answer here: maybe. There’s a vague correlation but I’d say that the price of a drink is a pretty bad indicator. Looking at the chart you can see a wide range of pay for baristas making a drink at the £3.00 price point.

Equally it’s interesting that Perth in Australia has the most expensive drinks in the country, and its baristas earn the most – but Sydney baristas earn more per hour (on average) than Melbourne ones to serve cheaper drinks.

There are so many ways that this data could be picked apart. What if respondents have only just started at a cafe? What if it pays more experienced staff better? What if baristas lied?

Ultimately the sample pool here is very small. Way too small to be truly useful, but I think this is still an interesting little metric for barista culture that I would like to explore more in the future.