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One Less Olive

Posted by Fergus on 25th Oct 2019

One Less Olive.

30 years ago American Airlines made the decision to serve one less olive in their house salad for each first class passenger. The CEO at the time Robert Crandall was convinced that not only would this save the airline a lot of money, but the passengers wouldn’t even notice the missing olive. The notorious penny pincher was spot on, and the airline reportedly saved $40,000USD a year, a tiny change that made a big impact.

The rising pond covers all the stumps.

Whilst operating a cafe is a very different kettle of fish to an airline the principles still apply, successful cafe operators know exactly where the money in the business is going and exactly how much return they can expect from the products they are using. There is an old adage that the rising pond water covers all the stumps, and it is only when the water level falls that the stumps are revealed. A nice way of saying that when things are good and the money is coming in it is easier for wasteful practices to go unnoticed, however when things slow down areas of the business that are leaking money become far more obvious. When that water level starts dropping you want to make sure you know where the stumps are already. For your coffee program that can mean regularly logging how many shots are wasted in a kilo (certain pos software tracks this, or use a pen and pad and keep a tally once a week), tightening up your workflows to include weighing your dose, catching the otherside of single shots and using them rather than letting them drain down the drip tray and training staff to understand the true cost of each shot they pull.

Yield per kilo not price per kilo.

How much you pay per kilo is important, no doubt about it, it is often the first question asked by potential customers, but a detail often overlooked is how many coffees you are able to yield from each kilo. Are you able to answer that question with confidence? A metric of success has always been how many kilos per week a cafe is ripping through, more kilos means busier shop right? But what if 30-50% of each kilo is wasted? That seems like a lot but you would be surprised how much coffee ends up in the bin rather the cup.

Let's look at a couple of examples;

Shop A is doing an average of 30kgs a week, they pay $28 a kilo, dose roughly 24g (they don’t have workflows that weigh dose), their wastage is high, around 40%, and they yield roughly 48-55 single shots per kilo, each shot costs them approx 0.60c.

Shop B is doing an average of 20kgs a week, their coffee supplier is a specialty roaster and supply them with high grade coffees that they pay $34 a kilo for. Because it is a higher quality product they can use less yet still achieve full flavour. To reduce waste and improve consistency they weigh every dose to be 20g of coffee and they keep their spare shots for use in other drinks. This brings their wastage down to around 25%, and because of their workflows they typically yield 65-75 single shots per kilo, each shot costing them approx 0.45c.

The barista at Shop A comes in 30 minutes before open to dial in the coffee, it often takes them between 6-10 shots until the coffee is tasting how it tasted the day before, if they weighed their doses and had a set recipe this wouldn’t be required. Shop A is open 365 days a year so the dial in costs the business roughly $1,750 in coffee alone, not to mention the added wage costs involved. Shop B pay more for their coffee but thanks to the higher grade coffees and more rigorous quality controls of their roaster their dial in is usually 2-3 shots to get the grind setting bang on, costing them around $330 a year, and there are further savings in wages to be had with later start times for baristas.

This example highlights how important it is to know how much of each kilo is ending up in the cup rather than the bin or down the drip tray, because this determines the real value of the product. If you are paying less but having to use more to achieve a good result is it worth it?

I chatted to Luke who is owner of Buck Hamblin, a cracking little coffee shop just south of Sydney in Thirroul (pay him a visit next time you head south, you won’t be disappointed). Whenever I visit Luke I’m always stoked at how tight his coffee bar is run, you can see every stage of his workflow has been thought out to minimise waste, Luke says “other than ~65g we grind out of the mythos after cleaning each day, and the odd channeled shot we discard, we waste nothing!” it sounds like a big claim, but Marvell Street’s fearless leader Nico has experienced it first hand, he worked a whole shift on bar at Buck and tallied up the total coffee waste during service to be just 26g at the end of the day. Add these savings up over the course of a year and the numbers look pretty healthy.

How many olives are in your salad?

The point of this post is to get people thinking about their workflows and systems, to get them logging their shots per kilo, and to get them to really determine the value of their coffee. Coffee is precious, it is an extremely laborious little seed that we in Australia often take for granted, if you care about every shot you grind then you should have an idea of how much you are dosing and how many shots you are yielding per kilo, because the more you know about these metrics the more likely you are to know where you can save some money, little savings add up over the course of the year in a big way so isn’t it worth checking how many olives are in your salad?