Starbucks Frappuccino – Too Expensive?

This picture kinda pisses me off. Disclaimer: I am not a coffee drinker or Starbucks patron; feel free to correct any misinformation I present here, or add things I missed if you wish.

funny-coffee-Starbucks-Frapuccino-latte

Let’s assume the cost they have here is accurate and the ingredients for a Starbucks Frappuccino cost just 32 cents.

My main problem with this picture is that it ignores the cost of labor. For the below calculations, I’m assuming it takes about as long to make a frappuccino in Starbucks itself as it does at home, but I don’t really know if that’s accurate. According to this recipe, it takes 10 minutes to make one of these fancy drinks, assuming we aren’t counting the time to acquire the ingredients.

I make (almost) $5 for every ten minutes at my job (or I would if I were hourly). For me, it is cheaper to buy a frappuccino than make one (not that I would). Baristas average about $9/hour (according to google), which is about $1.50 per 10 minutes. So counting labor, it costs almost $2 for the drink already.

Each drink needs to turn a bit of profit, as there are lots of overhead expenses to running a business. These are costs you don’t pay for a single drink that you make yourself, like renting a building, paying associated taxes, having employees who clean the building, buying new machines to make coffee, health benefits for employees (at least some Starbucks employees must have some benefits), salaries for employees who aren’t janitors or baristas (like managers), advertising, etc. Let’s assume, just as a wild guess, that all of these expenses can be covered with just 50 cents a drink. That might be high or low, as I really am not sure how much most of those things cost or how many drinks the average Starbucks location sells per day.

I think it is reasonable to think the true cost of a Starbucks Frappuccino is about $2.50. Again, that might be high or low, but I think it’s a reasonable estimate and probably low, not high.

Businesses also need to turn some profit, or they cease existing. That’s really basic economics. Just for the sake of the argument, let’s say they only need roughly a quarter’s worth of profits per drink to remain in business.

Assuming I’m at all accurate in my educated guessing, we can still argue that Starbucks Frappuccinos are overpriced, but if we’re being fair, they most likely only cost about one dollar more than they should, not over three dollars more, as the picture claims.

Bottom line: yes, it costs a lot less to make things at home, and it might even take less time because you won’t have to wait in line. However, pictures like this ignore the fact that if you buy food prepared, you are paying someone else to make it for you. You can’t ignore labor costs for services if you want to reasonably argue that prices are too high.


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