Transparent Pricing: What goes into every cup of Sudden Coffee
…and why we sell it for $3.00
We believe customers have a right to know what our product costs to make. We currently charge between $2.50 — $3.00 for a cup of Sudden Coffee. Our goal at this stage is to be slightly cheaper than coffee at most cafes and much higher quality. It actually costs us $2.34 to make each cup. We know many people are shocked that we’d charge $3 for something that appears to be a dressed up version of Folgers. So we figured we’d give you a little more info about why we think…
Sudden Coffee is actually a fantastic deal.
I’m covering 3 areas in this post:
- Why Sudden Coffee, specifically, is a good deal
- A detailed breakdown of exactly where every penny goes
- A (quick) general rule about startup products
Sudden Coffee is a great value
As a company, we need to do a better job making this more obvious to everyone — but we believe Sudden is a great value for 3 reasons:
- Amazing Beans — we use some of the highest quality beans available. A coffee at a cafe using the same beans would likely cost $4 per cup. To compare, beans in instant coffee might cost $0.20 per cup. Higher quality beans not only taste better — naturally sweet, smooth, flavorful — they are also grown responsibly. We pay a premium to support the farmers who grow the coffee as well as their families.
- Consistently Brewed — at a cafe, sometimes your barista is just having a bad day. Customers tell us all the time that coffee at most cafes is always inconsistent. At Sudden Coffee, we use a precise brewing process on every batch — overseen by expert baristas at every step. This makes every cup as consistent as possible. Furthermore, due to our process, we can extract much more flavor out of the beans — resulting in a better taste
- Made Convenient — we took all of the best attributes of coffee and made it really easy & convenient. You don’t have to wait in line or deal with equipment at home. You don’t even have to worry about running out. It’s ready whenever you are and more shows up at your door every month.
We aren’t just trying to make a good cup of instant coffee, we are trying to make the best coffee experience you’ve had, period. However, as you’ll see below — a lot goes into it.
The cost breakdown of each cup
Many people wonder WHY Sudden Coffee is $3.00 a cup. It costs us $2.34 to make each cup. The best way to think about it is that we do the same work as a cafe to brew a cup of coffee — and then some more, to convert it to a crystalized form. Over 50% of the cost goes into the beans & brewing — so most of your money goes right into the coffee itself.
A general rule of thumb for most packaged goods is that you must mark up the product by 50% to cover your expenses marketing and selling the product. Luckily we don’t follow the rules. If we did, we’d have to charge $4.68 a cup!
Beans
The most expensive part of Sudden Coffee is the beans — it’s because we buy the highest quality beans directly from farmers. Our goal is for you to taste (and smell) unique & interesting flavors. We want the coffee to be so good that you don’t have to add cream and sugar. More importantly, we buy single-origin beans that come directly from the farmers. We pay a premium for coffee beans to ensure that they are grown sustainably — in a way that supports the farmers, their families, and the local communities.
Brewing & Drying
The magic in Sudden Coffee comes from how we brew & dry the coffee. We no longer make every cup by hand, but it is fully brewed before being crystalized — just like a regular cup of coffee. My co-founder Kalle and Umeko, our Brewing Manager, two baristas with a combined 15+ years of experience oversee every step of the brewing process. We use a high precision process designed to mimic how a cafe brews coffee — at a large scale. Coffee is tasted and checked for quality at every step of the process.
Tubing
Believe it or not, the tubes we use aren’t that expensive ($0.06). The labels cost more than the tube. However, the most expensive part is getting coffee into the tube! Crystalized coffee doesn’t flow easily like coffee grounds. Finding a way to measure and pour the coffee has taken quite a bit of effort and comes at a cost.
A quick aside on plastic — we definitely are not fans of plastic waste created by our tubes. We are working on it, but as a small company, we use these tubes because we simply aren’t big enough to get a packaging company to make us biodegradable alternatives (yet). But we are committed to getting there.
Packaging
When you buy a product, you don’t think of the box it comes in — but for a lot of food, the bag is just as expensive as the item itself. We wanted to give you coffee in a bag that you can reuse or take with you. Sudden is designed to fit your on-the-go lifestyle so it needs to live in an on-the-go place — a bag.
Wages
Our production line has a lot of steps that we still do by-hand. As we speak, we have 2 people — Steven & LaToya who work on everything from crystalizing the coffee, packaging it into tubes, and getting it ready for shipping. We like it that way. Doing things by hand allows us to stay flexible and agile. We’ve been able to experiment with new techniques, new packaging, or new coffee on a days notice.
Shipping
We offer free shipping in the US, but it’s not free for us! Many companies out there would give you a lower price and then tack on a shipping fee at the end — surprise!! That’s not what we believe in. The price you see is the price you get.
We get better all the time
Last April, we sold coffee for $6 a cup — and it did cost us that much to make it. We hope to get better and cheaper over time (and one day make enough money to be profitable!)
My advice — try every startup product you see
After working on many startups, I’ll let you in on a secret — most startup products are a great deal.
Startups are desperately looking for customers — we are willing to sell things unprofitably, just for you to try it — so we can get your feedback. In a past life, I sold a burrito bowl with filet mignon for $8.
A 30 year old coffee chain would never do this. Neither would Apple. Large companies need to be profitable. A big company would have to charge $5–6 per cup for Sudden to work. So when you see a startup product — try it! You’re getting a good deal.
Conclusion
If you made it this far — congrats — you truly are a fan! I hope this provides some insight into why we charge what we do. I’m not someone who exaggerates, I truly believe Sudden is one of the best deals around and I hope you’ll give it a try!
— Josh Zloof
Co-founder & CEO
Sudden Coffee
