ONE cup size to rule them all
Good morning, i'm drinking an oat cortado from a tiny paper cup. Listening to nothing because I lost my headphones and im sure they'll turn up one day. Thinking about how great this tiny cup is and how our cup strategy has changed so much this year!
When I first considered one cup size, it made sense for a lot of reasons, but I worried sales would suffer.
Even though COGS (cost of goods sold) is usually a percent and because it scales so quickly, our COGS on bigger sizes is worse; We were still making more per cup sold as a dollar amount on bigger sizes. This is why when someone says “the bigger size is only 50 cents more” its perceived as a good deal for everyone. We charge just a little more and take a COGS hit, but still hit our per cup sales goal.
Some places dont play game theory like this and if they’re cost is $0.25 more, you're paying a dollar more because COGS is always a flat 25%, which is how many people ended up with $8 plain oat milk lattes this year.
That doesn't always work though. When green coffee doubled in cost last year on the global market, and now cost Starbucks 0.50 more per cup. Did they charge another $3 per cup because they always want a low COGS? And be perceived as the $10 coffee spot first? Probably not overnight. If they charge $1 more and make a big deal about global factors, that's still a win for now.
We also found ourselves making a hard choice, but new menu meant new opportunity.
It was time to get our COGS in order, and it would be easier with mainly smaller cups. We also killed our delivery truck for now, where we saved probably $300/mo on milk alone. Choosing to pick up in person from a local restaurant store for cups and Aldi/ Costco for wet goods. I decided to put in some work and deal with it, using Instacart in emergencies. Milk would be the biggest ask on my end, but using fewer big cups with more milk per drink would mean we’re also using way less milk in general.
Putting this into an excel we discovered that not relying on one trucks inventory and availability also got our COGS down to around or below 25% across the board. Our customer prices were pretty much unchanged, but our COGS were never compromising our target percents or ingredients. So we were making more per cup more consistently. Net sales..up!
Staff were worried people would miss the old sizes
Like anything we sweat on for months, nobody cared when it came time to make our move. We got a couple joke/mad regulars texts or call outs. We had some people ordering two drinks to make up for the caffeine. Some people bring their own cups and ask for extra milk or ice. In general its been totally fine.
12oz hot is a handful and 16oz cold is a pint glass. 4oz for a cortado or espresso is appropriate, and a 6oz capp pour in a 12oz cup makes sense!
Lets talk about all the easy wins
For one we're a tiny shop, so stocking 5 types of cups and 4 types of lids is crazy. Each box is like 2-3ft square. So we're stuffing sleeves in every nook and cranny.
Only being able to store 5-6 sleeves of each cup means constant restocking of a ton of various dry goods, and storing backstock at home.
Workflow is way better, eliminating one of our core three questions; hot or cold, small or big, for here or to go.
Crucially, one standard make guide for every drink. Which is making our whole weekly seasonals deal way better too! We can decide how every shot and drink tastes best, and just serve that.
It makes batching drip coffee easier, batching all the raw beans easier. Batching the tea bags were making now. Etc.
One size is the truth.
