The true cost of our caffeine addiction and why Nespresso is not the answer

Like 54% of the public in the US, I have a coffee addiction, and we have been slowly brainwashed to spending more and more on our daily Java intake in the last 10 years. Take some of these facts:

I don’t know about you, but I consume my coffee in a bunch of places, from coffee shops like Starbucks, to restaurants after dinner and also at home. I started to wonder how much this addiction costs me.

In a conversation with friend Nick Brown last week, we discussed the folly of buying expensive Starbucks lattes at $4 a cup every day. Even if you drink just one of these you’re incurring a $1000 a year habit. And with 2% milk, it will cost you 190 calories a go.

Nick explained that he had gone the Nestlé Nespresso route, which costs just $0.60 a capsule, thereby saving a large amount of money. The thing is, I’m not so sure it does. Nestlé and others sell premium coffee machines – typically costing about $200 or more. So let’s do the math.

I have a similar machine that brews Keurig K-Cups. I like Green Mountain’s Nantucket blend coffee, which costs $16.49 for 24 capsules – that’s $0.69 a shot. There are ways of getting this down to about $0.55 a shot (print a 20% off coupon and go to Bed Bath and Beyond for example) but let’s face it, it’s a hassle. What’s more, I go through an average of 5 of these a day (some decaffeinated, you will be glad to hear). That’s a $1200 a year habit.

What’s interesting is that Nantucket Blend costs $9.49 for a 12oz bag of beans. It’s tricky to make comparisons here, but a typical single shot of espresso weighs about 7g, so a 12oz (340g) bag of coffee can make 48 shots of coffee. This weighs in at about $0.20 a shot. But to do this, I’d have to buy an espresso machine. I had a Gaggia Classic some time back and it’s rusting in a cupboard. Too much mess, too much hassle.

What are we supposed to do?

The worst thing is that even if you have one of these single-cup machines like Nespresso or K-cup, it won’t stop you from spending in Starbucks. It’s a social thing, and I find myself in a coffee shop with a colleague, friend or business associate several times a week – spending at least $10 a week on average, or $500 a year, in addition to what you spend at home.

The only other alternative is an expensive Super Automatic machine – costing $699 or more for something like the Jura ENA 4 from the Seattle Coffee Company (I’m not affiliated with them, but I think owner Gail’s jacked-up-on-caffeine YouTube video channel is hilarious social media marketing). That’s an awful lot of capital outlay to consider. Let’s compare the costs over a 3 year period (a machine like this should last about 3 years before it explodes).

Starbucks Nespresso/K-Cup Super Automatic Espresso
Capital Outlay N/A $250 $700
Cost per cup $1.45 $0.69 $0.20
Cost over 3 years for 3 cups a day $4763 $2266 $657
Additional $10 weekly budget for coffee N/A $1500 $1500
Total annual cost over 3 years $4763 $4016 $2857

Shocked? I am – by two things. First, how much this addiction costs us. In the Starbucks case I took the cheapest coffee – if this was a $4 latte or cappuccino, this would have been much higher, and it is only for one person. In a family of two coffee addicts, it could be much worse.

Second, I’m shocked by the cost of the friendly Nespresso machine. You get into the espresso market at a lower cost, but the TCO is shocking.

The hidden cost of Nespresso

First, you don’t get as much coffee with Nespresso, so we’re not even comparing like-for-like. You actually only get 5 grams of ground coffee (28% less), so you (may) need 28% more, which brings the cost up to $4663 over 3 years (the same as going to Starbucks).

Second, $0.20 of the $0.60 is going to coffee, and the other $0.40 is going to make the plastic, and into Nestlé’s pocket. Since 42% of Nestlé is owned by the Swiss, most of the money is going out the country (yes, there is an irony that the Super Automatic machine I feature is also Swiss, I know).

Third, most of the Nespresso or K-Cup capsules go in landfill. Nestlé have sold 27 billion Nespresso capsules so far, which is a metric shitload of rubbish.

Fourth, the coffee is bad. I think Nespresso is better than K-Cup but even the best Keurig coffee is an unpleasant parody of a proper Italian coffee.

Think again

So if you were thinking to save money, like Nick, by buying a Nespresso machine, think again. If you think that spending $700+ on a coffee machine is ridiculous – do the maths based on your intake, because you may get a nasty shock.

And also take a look at the Coffee Review website, where you can search for local coffee roasters by location (just put it in the keywords). This means that if you purchase coffee from a local roaster at about $10-15 a pound, you will be feeding the local economy. That makes me feel good.

What’s more if you look at the International Coffee Organization cost of wholesale coffee, you will see that coffee has fallen in price over the last year to about $1.40 per pound, from highs of $2.73 in 2011. Did you see Starbucks drop its prices? Or Green Mountain K-Cups?

I didn’t think so.

39 thoughts on “The true cost of our caffeine addiction and why Nespresso is not the answer

  1. Vijay

    I had a coffee at McDonalds yesterday – my first time ever I think . It was good coffee and cost me $1.09 . I am surprised they have not gone after Starbucks more seriously .

    1. John Appleby Post author

      You’re right – I’ve had coffee ad McDs and it is surprisingly good. In the UK they even have an excellent espresso machine that serves great coffee.

      I think it’s a demographic and market segmentation problem which prevents them from going after the Starbucks market, right? I don’t mind sitting in Starbucks and having a meeting but I’m not so sure how I feel about doing the same in McDonalds? 🙂

      John

      1. Vijay

        Good point . Many many moons ago – a senior dude from my ex employer yelled at 2 colleagues who had a “work” meeting at McDonalds . That being said , I have Metamucil clients and colleagues at McDonalds and Hole in the wall eateries across the globe . Good coffee and food makes conversation easier 🙂

    2. martin

      McCafe is a ‘store within a store’ concept that originated in the Swanson Street, Melbourne McDonalds about 20 years ago; the idea is you get barista brewed coffee , sweets (muffins, cheesecake etc), the full coffee shop experience, at Macca’s prices

    3. Cc

      They have, they considered a big partnership at one time and Starbucks pulled out to avoid diluting their brand.

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  3. Carsten Nitschke

    Good morning,

    besides the fact that I have Nespresso at home and I am quite happy with it since I can choose different flavours / strength and have 0 mess there is another piece that I would say is missing in the math. Those super automatic machines have a quite high maintenance. Not only of cleaning but of all the people I know (more than 5) that had!!! one all of the were completely dissatisfied with the quality since they tend to break and then it becomes really expensive (repair of the machine + outside coffee).

    Still interesting to see how coffee is probably the highest margin product sold in the F&B industry.

  4. Zoli Erdos

    I agree and disagree. For regular espresso drinkers the superautomatics are a good investment. My Saeco cost $650 and lasted 11 years. You could get pretty good beans for $10-12 / lbs – do the math.

    That said, when it died, I switched to a “Nespresso-type”, the CBTL Kaldi, but only because I got off the caffeine addiction, and am an occasional drinker now, for which convenience wins, at 65c a capsule.

    1. John Appleby Post author

      Sure – and you need to do the TCA/TCO equation yourself and decide where you fit. Nespresso fits the occasional drinker very well as the coffee doesn’t really go off (it’s hermetically sealed).

      But in our office, we go through hundreds of capsules a day. Nestlé literally give us the machines (which break every month or two) for free, so long as we keep buying the capsules.

    2. Larry Vandemeer

      Let’s see now… when the original post was written the author figured the math with 60c nespresso pods. Your post of Feb 2013 talks about pods being 65c. And now in late 2015/2016 nespresso pods cost 70c, 75c and 80c, some 20-30% higher while a 2lb bag of espresso coffee beans at your local costco is still less than $10 or 900 7gr coffee cup at 7.7c/cup. So while the total cost of ownership (TCO) of nespresso has gone up 20-30%, the TCO for super automatics and semi automatic machines has gone down (I bought a Rancilio Rocky grinder and a Gaggia classic with 2.2 lb bag of Lavazza espresso coffee beans, 2x Urnex descaler, a 20oz frothing pitcher and frothing thermometer and a credit of $27 for more free coffee, all for $675). I figured in just the first year alone not using a nespresso machine would pay for the whole Rancilion and Gaggia setup I have and end up with much better coffee to boot. 900 nespresso pods x 75c on average=$675. And you won’t be littering the planet like nespresso pods do.

  5. Chuck Kichler

    Starbucks have become a social element. We dine out more than ever before. As a kid, a restaurant was a once a month treat. Wendy’s on soccer nights was my first intro to fast food to save time. I’m not surprised at the amount. I worry more about the calories people consume in some of the obscenely sweet drinks. I got a free one once. I had to throw it out because it made my teeth hurt. More candy than coffee.

    For individuals on tight income, they’d be far better served investing that $2/day. It is known as the latte theory. I’m proud to say my daughter in college uses good insulated drip pot to keep down the purchased cups.

    Three years ago I did purchase a Saeco super automatic from Seattle Coffee Company. It has worked flawlessly. They even met the price of a competitor. I use beans from a local roaster in Ft. Myers I buy at the local Italian market.

    Be sure to find real expresso roast without oily beans. If they are oily, they mess up the machine and taste burnt. And yeah, you can see that lesson Seattle Coffee Company video blog, too.

    PS: you forgot the cost of driving to Starbucks.

  6. Tandi

    There are a handful of things that don’t match every person’s specific situation. First, the nespresso capsules are only $.60 each. Unless you buy on Amazon and pay a buck each, which is nonesense.
    Second, we have a nespresso and NEVER hit coffee shops. Once per month maybe, but its doctored drip coffee. That additional cost doesn’t apply for everyone. Once we switched from a standard coffee pot to the N, we never looked back. Third, if you like ‘recipes’ you have the additional costs of flavored syrups and sauces. If you like variety, it can add up. Fourth, 3 cups a day is a lot. Not everyone drinks that much. For a stay at home mom who likes to have a ‘fancy’ coffee but not spend a fortune or have to pack the kids out to get it, you have to admit that these machines have their place. So a light addicts tally might look a bit different.
    cost of machine 250 Starbuck route $0 for machine
    daily cost 1cup for 3yrs 657 $4 day x 3yrs 4380
    cost of flavors 145 no additional 0
    total 3yr cost 1052 Total cost 4380

    We typically buy a new torani a month. So $4 x 36 months adds that 145 costs.
    So I personally save 3328 in 3 years. And I’m ok with that. I can see for folks who live on coffee, it might not make sense, but for us, the ease and consistent quality make it so worth it. But I really enjoyed your post and seeing the other side of the home machine debate. Maybe I won’t tell my friends it will save them money. Who knows what their habit actually costs them. Thanks

    1. John Appleby Post author

      Hiya,

      So I did urge you in the article to do the math based on your usage – it’s based on calculations for me, which are probably too low on the consumption side. If you’re happy with the unit you have then that’s great. Nespresso does offer OK, consistent, coffee results and if you are an occasional consumer then the running costs are obviously not as high.

      And hopefully it made a few people think 🙂

      John

  7. Kohi Nahi

    My net cost for a $400 Nespresso Lattissima Plus was $200 — 25% off at WIlliams – Sonoma with a $100 Nespresso club credit.

    I love coffee and I love tea, but I am not an addict of either one – primarily, I believe, because caffeine has an opposite effect on me. It calms me down. I drink tea most mornings and coffee most nights ~ 7 cups of each a week.

    Of all the Starbucks in my small city of Richmond, VA, there are only 2 stores that produce drinkable coffee drinks, and not a single store can produce a decent espresso. Since getting my Lattissima 6 months ago, I have spent less than 20 dollars on store bought coffee (Starbucks & Dunkin’ when travelling). I sit 50 feet from my on-campus Starbucks store but have not visited in nearly 3 months…I just don’t care for or get the satisfaction of drinking a Starbucks beverage anymore. Nespresso has spoiled me!

    I love Nespresso for it fantastic tasting espressos and it’s well portioned drinks. Don’t need a pint of coffee to get a fix! 😉

  8. Coffee Adict

    Interesting article. Between Starbucks and smartphones, a lot of people spend a lot of money they cannot afford (without realizing it).

    You may want to correct one of the initial stats: “Americans consume 400m cups of coffee a year. It’s 400m cups per day, not per year (a little more than one cup a day per living soul in the country).

  9. Hans

    Well, the best coffee is still the good old fashioned filter coffee. Unless, of course, you want to brew an espresso. A great brand I have found is being sold at, yes ALDI , for $ 4.99 a pound. it’s imported premium coffee.

  10. Lily

    Interesting! Thanks! I used to be the addict and drank 5 cups a day and felt many negative effects with it. I weaned myself down and will have between 1-3 a day. Also transitioning with decaf.

    I know it gets atrociously expensive but have you thought about cutting back too? If you had 3 cups a day, you’s save 40% right? 🙂 i drink rooibos or green tea when i go out to coffee shops now.

  11. Dante

    Nespresso has a recycling program which is pretty cool
    At starbucks you are paying for the milk…did you know that the Short cappuccino and the Tall cappuccino have the same amount of coffee but a hella lot more milk goes into your tall order…Starbucks is into selling you milk and syrup … not coffee

  12. FoodieInDisguise

    I used to visit a Starbucks 2-3 times a day. Ever since I bought my Nespresso, I”m enjoying drinks at home and on the road. I like the variety and since the writing of this article, machines are now as low as $149. There are quite a few Nespresso compatible capsules with a lower price point than Nespresso capsules.

    Have I completely stopped Starbucks? No, it is a social thing – but most of my caffeine is from the Nespresso. It’s nice to have a Decaf Latte at 10:20 at night and not have to run out to my local Starbucks or McCafe!

  13. Monica

    I bought a nespresso a few years ago and it has saved me money:) I think it depends on your lifestyle, I’m a stay at home mom, so I have the opportunity to drink coffee at home. I know my husband frequents the coffee shop quite often, he works downtown.
    I also have a keurig machine and buy pods at Costco for that. I think the nespresso pulls a decent shot of espresso, certainly better than Starbucks, maybe not quite as good as an Italian coffee house, but pretty good.

  14. Shane

    Just to throw a curve-ball here:
    I don’t drink coffee, nor tea.
    “That must save you a lot of money” I hear people say all the time – no, because I have other vices. Chocolate used to be a big one, but now my diet has changed and it has now transferred to cashews and almonds.
    So keep in mind that coffee/tea isn’t just about what you consume but it is also a time-filler. Do you grab a coffee on the run between meetings or do you like to sit down and savour the flavour?
    I see many colleagues head off to ‘the local’ coffee shop for a coffee in the morning, then morning tea, then lunch at a cafe, then afternoon tea, then just before heading home. Your work time is also being consumed by this and therefore is a cost to either yourself or the company you work for.
    More food for thought?

    1. John Appleby

      I also have some recollection of you eating an entire box of 12 donuts in one sitting! 🙂

      For me, it’s not especially a social thing, I just like decent coffee. I drink it mostly when I’m at home and I just press a button and then I drink it as I go about my morning. But then I’m guilty of working too much, not too little.

      As for the social coffee phenomenon in general, I think there’s a big variance in how this works and in different cultures. It is quite common to use coffee, breakfast, lunch or dinner as a setting for meetings, which I’d suggest combines two activities and provides a social setting for meetings, which may be important. In other cases, I see people who use coffee as an excuse to avoid doing work. In this case, I’d suggest coffee is an excuse and not the root cause of the problem.

      To paraphrase Goldie Lookin Chain – Coffee doesn’t destroy productivity, people do 🙂

      Friends did a great parody of this, where all the important office decisions were being made around smoke breaks!

      http://en.wikipedia.org/wiki/The_One_Where_Rachel_Smokes

  15. bsarka

    My net cost for a Starbuck Verismo was $16 at Goodwill plus a thorough cleaning and descaling. It makes great espresso and coffee that is too hot to hold but tasty as can be when using the starbucks pods. I haven’t found the CBTL pods that I like best for use with the machine but at about 30 cents a cup from B B and B I will keep testing.

  16. Dave

    Super fun read! The numbers are close enough. It’s really a no brainer: The cost is lowest over the long run to buy beans and brew in a Super-Automatic machine. If the upside can get any better it’s that the coffee is most delicious brewed this way, fresh roasted beans ground just before the cup is made. Thanks for the essay! From one addict to another, if you have access, try Peet’s Major Dickinson’s or Ritual Coffee beans. Both are lovely.

  17. JD

    Since when did people drink coffee like cigarettes?! I didn’t even know coffee’s addictive, and I’ve been drinking it for 7 years, not once out of a feeling of craving or a ‘need for it’.

  18. michellemotm

    When I ran out of the sample pods that came with my nespresso I bought the coffee duck for $20 more. I didn’t get sucked into buying the Nespresso pods.. too expensive for me. I don’t use it daily but still save vs. going to coffee shops. About being ‘social’ in coffee shops .. I bring my own cup out where ever I go. You talk about landfill waste of the pods but what about the cups from your social experience? Bring your own cup, invest in a refill pod ($20 bucks) and moderate yourself .. it’s all good.

  19. mark Jacobsenn

    Idea…. If Starbucks is necessary for the social aspect, show up with your thermos filled with your nespresso latte, sit down and enjoy the time with your friends. Starbucks sold to them and are fine with a non-purchaser amongst the group at the table. You Insta-save that odd variable of 1500, returning you to a multi-thousand dollar savings, and without the loss of social interactions with friends at a coffee house.

  20. John Baltzell

    I am in complete agreement. I’m happily purchasing a Z7 super automatic machine. I love the my coffee and I like to source my beans globally! Great article!

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  22. Antonio

    The cost of 1 nesspresso ristretto pod is $45. This article is unfortunately very misleading…

    I live the nesspresso machine and I’m spending way less that Starbucks, so it makes sense.

  23. Winston

    I look at the Jura machines and for the cost and £150 per year (£50 if living in Austria due to serviceman in every town) I would say Bean to cup is a sure way of spending buckets of cash on machines that basically needs a staff to clean and run for you.
    Nespresso you have as a convenient back up. and the Cafetiere is on hand for 8 cup requests for dinner parties.

    Generally I would say the rubbish mess for Nespresso is pretty awful thanks to the people who ‘don;t make use of the recycle programme.

    Overall, humans create a”LOT” of waste in the shit that we buy, Nespresso is not different in terms of volume but at least they take their recycling seriously. Whereas other companies for example: where did your last TV go? Skip, junk yard or Back to Samsung?

    As humans we consume too much, I bought a “fill your own capsule” for Nespresso. I sleep at night happily. I send capsules back to recycling centres using the green bags. Alumium is recycled coffee ground is off to compost and gardens

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  25. Paul Clarke

    So if you are wanting to move to a super automatic from a Kuerig and drink 3 cups average per day what is the best $2k ish machine. In terms of features I would like the option to plum water line to it and don’t need a bunch of fancy features but do want something simple to clean and maintain.

  26. Richard Soos

    I was totally with you for a number of years, my Gaggia Classic sat on the shelf whilst I made do with the Nespresso, telling myself the convenience and consistency I got outweighed the palava of using the big machine as nespresso was a perfectly good cup of coffee. I eventually got bored of the same blends and often went past roasteries, pining for a fancy blend of fresh beans and I decided to revisit the Gaggia. I had it serviced and after a few hours reading up on coffee forums, bought a couple of tweaking accessories to ‘pimp up my embibe’. I have learnt so much about chasing that little black unicorn and after a lot of time and money wasted experimenting and honing technique until I stumbled upon that perfect extraction, that I am totally sold back into the old school ways. Let’s be clear, this article is about the ‘true cost’ and in that sense one can argue what is the cost of an obsession? Well it doesn’t usually tot up in the two figures category! A Nespresso is an excellent piece of kit for a starting (but not obsessive) coffee lover with little room but it remains a compromise. I consider it analogous to someone with an embryonic interest in photography. A subcompact costing a couple of hundred will take a perfectly acceptable picture 99% of the time with minimal effort. But it will never take a picture of the quality of a high end SLR with all the bells and whistles and lenses and flashes, preset on ‘manual’, with hundreds of hours of trial and error and learning to get that one ‘perfect exposure’. If you haven’t the time or the patience and inclination, you will never get that perfect shot, be it an image or an espresso! So in answer to “What is the true cost of our caffeine addiction”, my answer is, it depends if you are simply after your next hit, or if you are willing to go beyond to discover the sublime. I can tell you that my Nespresso currently sits on the shelf and every morning I get up and beg forgiveness of my Gaggia, in pride of place on the kitchen counter next to its new friend, the Mignon Eureka grinder. My morning coffee has again become a little escape from the daily drudgery, a ‘tea ceremony’, if you will; much, much more than a caffeine hit, a few moments that leave me not only feeling more awake but also deeply satisfied with the creation of a little cup of deep black magic amidst an otherwise dreary day of compromise. If you have invested significantly in an espresso machine and are finding yourself getting tired with it. I strongly suggest taking a few minutes out in your day to check out a couple of the excellent forums online to see how you can bring life and love back into your brew. Although I have nothing against modern compact coffee makers, they cannot match the quality achieved from a half decent machine used with care and attention by someone who wants more than ‘coffee to go’.

  27. jdizzle

    First you are comparing coffee to espresso. At the very least you would need to compare a doppio shot. Second, Nespresso machines have come down in price big time, so now the equation is off. I think you need to stick to the 4-5 dollar latte a cup and maybe add some milk into the equation at home as well. Like pretty much everything, it’s MUCH cheaper to make it at home yourself. The only exception I’ve found is some ethnic take out restaurants where a lot of ingredients and time are there. Honestly nespresso is better espresso than what they serve at starbucks anyway. If you were comparing coffee, just plug in a mr coffee machine and a bag of beans, cost savings go up even more. That being said, I still go to coffee shops frequently to hang out, work on wifi, grab a bite to eat, get out of the house, etc.

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