Iced coffees are having a moment. Many of us are now opting to get caffeinated the cold way, and it’s not just because we’re sweltering through summer.
“At our Queensland store, the iced oat latte outsold the flat white and the latte combined – and it still does,” says Michael Brabant, CEO of Single O Specialty Coffee. At the company’s flagship Sydney cafe, the team can’t keep up with demand – they use 50 kilograms of ice a day, but their ice machine can only make 32 kilograms. They’re currently supplementing with bags of bought ice and have plans to get a bigger machine.
And it’s a similar story at Industry Beans, which has cafes in Brisbane, Melbourne and Sydney.
“As an average across the business, iced coffee sales are usually about 35 to 40 per cent in summer, and then it drops down to about 20 to 30 per cent in winter,” says co-founder Trevor Simmons. “The Fitzroy Iced, one of our specialty iced coffee beverages, is our third biggest seller now across the venues, across the year, and in summer it’s right up there with lattes.”
Although plenty are switching from hot to cold coffees, they’re not liking the higher prices. I certainly didn’t when, on a particularly muggy morning, I decided to forgo my usual long black for its cold counterpart. Checking my bank statement, I was dismayed to see that my iced long black cost $6 – a dollar more than the hot version.
I’m not alone in my sticker shock. Online, many folks are commiserating over the apparent “ice tax” of cold coffees.
“Why are iced lattes so expensive?” asked one user on Reddit. “This morning I paid $8.50 for an ice latte from the local coffee shop,” they wrote. “Just trying to understand why my drink of choice is so much more expensive than hot coffee? I would have thought that they were easier to make – do the plastic cups just cost more than paper cups? Is ice just a huge expenditure?”
Responses ranged from cynical (“They’re charging what they can get away with”) to critical (“Because people like you pay it”) and dejected (“Why is everything so expensive?”).
So what’s behind pricier iced coffees? Is there a higher labour cost to disrupting a barista’s ordinary workflow? Is the price of procuring or making ice that steep? And does any of that really warrant a price increase?
“Charging for water? No, I think coffee should be equal,” says Simmons. “Unless there’s a high ingredient cost – like oat, almond or soy milk – or it’s a volume thing, because a lot of iced coffees come in a standard large, taking a hot espresso and serving it cold should cost the same.
“In terms of labour, it’s probably in fact easier to make iced coffees.”
At all of Industry Beans’ locations around Australia, basic iced espresso drinks are priced identically whether they’re hot or cold. Their specialty drinks, such as the Fitzroy Iced, which uses coffee-soaked tapioca pearls and expensive ingredients such as fresh wattle seed, are sold at a substantially higher price, which is down to their higher unit cost and more involved preparation.
At Single O there are also two pricing tiers for iced coffee drinks. Iced versions of classic coffees – iced lattes, long blacks – are priced the same. Specialty beverages such as the best-selling iced oat latte, which uses a distinct production process and high-cost ingredients such as agave syrup, have an $8.50 price tag.
“We charge more for it because we think it’s worth more – it’s a different product, with more expensive ingredients and it’s outside of our normal operation,” Brabant says. “But if you walk up and ask for an iced long black or an iced latte and we just drop a couple of ice cubes in a cup, it’s the same price.”
But that’s just the approach that works for Single O. Brabant thinks we shouldn’t give other cafes a hard time if there’s a small surcharge for a cold coffee.
“Every cafe has its own individual situation – some might not have an ice machine, so I would say it’s fair to charge for ice,” he says. “Some people might believe that cafes are trying to take advantage of customers, but I think that’s highly unlikely.
“The majority of the hospitality industry do the right thing and want their customers to come back and be happy.”
