# A better, faster coffee shop

I can imagine a coffee shop that works better. I want to cross a Ford factory with a sushi train and a horde of lemmings…

I buy a cup of coffee in two situations. One is where I am ‘having coffee’ and I want to linger.  In this case, the 3 dollars is a low low price to pay to rent a chair in a nice public space and shoot the breeze with somebody.

The other situation is take-away, when I’m on my way to work, or somewhere, and I need to wake up.

In the second case, the 3 dollars is an negligible cost for getting my day going.

BUT.

In the second case, the coffee shop tends to be busy. There might be another 8 people in line for a long macchiato or skinny latte. If the barista is not careful, the wait time can approach ten minutes. On the way to work, ten minutes is worth a lot more than the price of the actual coffee. In fact, I’d pay more for faster service…

So. Imagine a take-away coffee shop where the barista doesn’t take orders. They just man the machine and make coffees. Following Henry Ford, we tell customers they can have whatever kind of coffee they want, so long as it’s a long black.

The barista churns out beautifully crafted long blacks, and puts them on a conveyor belt. The price starts at 3 dollars. The conveyor belt moves through four zones so that each coffee is in each zone for 2 minutes. The price you pay depends on what zone it’s in.

So when the coffee is put on the line, it costs 3 bucks. After 2 minutes its in zone 2, and costs 2.50. Two minutes later, it’s cooling a bit, and is in zone 3. It costs \$2.25.  After six minutes, it is in zone 4, and costs \$2.

Then, unlike a sushi train, the coffee does a lemming. It plunges off the end of the conveyor belt. This guarantees the longest time a coffee will sit for is 8 minutes, and that the lowest price a coffee will sell for is 2 bucks.

The problem with pre-producing coffee is that most people want a fresh cup. My imaginary coffee shop applies price discrimination so that those who value freshness can pay for it. If you’re in a rush and there’s no fresh coffee, there might be a slightly older one trundling through zone 2 or 3 that you can get at a discount. It’s a win-win.

This coffee shop delivers value to customers, by not wasting their time. By having fewer staff taking orders, it should have lower staff costs. It won’t have the throng of people hovering and waiting, so it should have higher customer throughput. It should be able to make more coffees per minute, because the baristas don’t have to look up, communicate, or worry about anything other than making perfect cup after perfect cup.

It might even be able to offer lower prices than a normal coffee shop, although it would need to be in a very high passerby location to work.

It’s a winning idea. Anyone want to lend me the start-up capital?

## Published by

### thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

## 8 thoughts on “A better, faster coffee shop”

1. Jim says:

I like it. Almost all the punters buy the same thing anyway. I would sacrifice my preference for faster service. What is really the difference between a latte/flat white/capp anyway. The most important thing is that it is not made by a gumby.

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2. Have you heard of Far Coast cafe? This was a short-lived franchise in Toronto that was created by Coca-Cola. They had a boutique outlet in the swanky Yorkville area, yet the premise of the coffee service was that the ‘Barista’ would simply place your cup under a dispenser to create your drink. In a 2006 review (when Far Coast first opened it’s doors), this concept was described as follows:

With Far-Coast, Coca-Cola is attempting to do away with the touch of the Barristas, and introducing in its place a pod-system for its coffee (think: a commercial variant of the Nespresso systems). In theory, every cup of coffee, regardless of if it’s being made by an old hand or a newbie, should taste exactly as it would have the day before, or the week after. Fantastic for consistency, but terrible for the individual touch that some coffee afficianados demand.

The author then speculated as to how this fast-coffee venture would work, writing:

In the end will it fly? My guess is yes. You won’t see Far Coasts on every street corner, but especially in the ritzier neighbourhoods, expect the Starbucks juggernaut to start feeling the heat.

http://www.blogto.com/cafes/farcoastcafe

There was a lot of hubub, and people were pretty mystified by this system. “No baristas here, these folks just have to get the buttons right.”

http://www.customercrossroads.com/customercrossroads/2007/01/far_coast_cocac.html

The franchise also hoped to quell naysayers by offering an eco-friendly take away experience, with with 12% post-consumer waste in each cup. This actually wasn’t that big of a deal, as Toronto has been starting to use Green Shift cups that go in our organic waste bins and supposedly decompose.

I remember thinking that the whole thing sounded terrible, and as a true coffee snob I could never abide by a watery cup from a dispenser.

Far Coast closed a year later, with their ‘robot-brewed pod’ system having become a bit of a local joke.
http://www.treehugger.com/files/2007/11/far_coast_is_to.php

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1. thomasthethinkengine says:

HI L Green!

I totally agree that any coffee shop that wants credibility needs a crumpled-faced old italian man setting the grind and filling the cups. That’s why this idea can work – It achieves speed not by automating the coffee making process, but by simplifying the ordering process….

The man makes coffees whether anyone’s ordered them or not, and he makes long blacks only. so if you want a long black, you can almost always get a fresh one without waiting. If there are no fresh ones, there might be one that got made three minutes ago….

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3. I’m sorry but this idea wouldn’t work.

Firstly, long blacks aren’t that popular, and milk coffees probably outsell them 5 to 1. To illustrate this, check how many long black cups (tulips) are on top of the average commercial coffee machine, compared to the number of latte glasses or Cap/Flat White cups. If you’re not offering milk you won’t attract many customers in the first place, and cold milk on the side won’t cut it.

Secondly, there would either be so much waste you couldn’t possibly charge (a minimum of) \$3 a pop, or you’d be making them to order most the time anyway. Sure at certain times you could be fairly sure there would be enough demand to constantly pump them out for a bit, like when people are heading to work, but once the day slows a bit making them like that would result in a lot of wasted coffees.

Thirdly, if you’re letting your long black go 8 minutes before it “lemmings” it either has to start so hot the coffee will be scorched, or it will be just above lukewarm by the time it “lemmings”. Either way the oils in the coffee will have separated and the flavours in the coffee will be getting pretty bad. I get that means it will be cheaper, but at that point most people would be better off with the \$1 cups being dispensed from the machines in 7-11s (which despite being made by a machine, would be hot and could come with milk). Maybe you could shorten the time before it lemmings, but then you’d exacerbate the second problem.

So no, you won’t be getting any funding from me (or I’d wager anyone that has ever worked i a cafe).

@Jim – No, almost all the punters do not order the same thing. Lattes, flat whites, cappuccinos, espressos (long or short), and macchiatos are all common orders, but even then you’ll find people ordering them hot, skinny, soy, large, small, strong, weak and any combination of the above; and people get really picky about their orders! “Could I have a 3/4 skinny latte, extra extra hot please? The last one wasn’t hot enough”.

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1. thomasthethinkengine says:

Agree most people don’t order long blacks. If it just sold long blacks it would need to be in a super high foot traffic area.

The rate of production would lead to waste and/or shortages from time to time. But by learning about peaks in demand, production peaks could be tailored, and my dream is that the price discrimination works well enough that no coffee ever falls off the end. Would that be possible? You’d never know until you started experimenting.

As for the time until people drink it, the city is full of offices where someone goes out for coffee and carries them back. with a lid on a coffee can and often does go ten minutes before drinking. Perhaps adding milk helps prevent the oils not splitting out? Not sure about the science there.

Choice is a funny topic. People always say they want choice, but take it away from them and they feel quite comfortable.
http://en.wikipedia.org/wiki/The_Paradox_of_Choice

All that said, life delivers us lots more ideas than there’s time to put into practice, and even though this one intrigues me, I’ll need to be a lot richer before I put my own money into it!

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4. Yep, adding milk helps. You might also notice lots of busy coffee shops will have a bell to let waiters know coffees are ready, but will yell “black coffee” or similar whenever there is an espresso or macchiato; that translates to “someone take this coffee now, or I have to make it again and I won’t be happy about it”.

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5. “and that the lowest price a coffee will sell for is 2 bucks.”

This isn’t quite right… the lowest price the coffee shop gets for a coffee is \$0 (the lemmings that fall off the end). The cost of a coffee for the shop is the same whether someone buys it or not, so those lemmings have to be factored in.

Also, \$2 is way too expensive for a coffee that’s been sitting around for 8 minutes…

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