About pricing and our menu

Well, this is the post we have been hesitating to write, but our backs are figuratively against the wall here.

Those of you who visit R&R regularly know that our menu prices have not moved much over the last three years. Yeah, there’s been a bump here and a bump there, but nothing more than a quarter at a time.

However, times are changing–quickly.

On the food side…

We kid you not, our price of flour has gone up 40¢/pound in the last few months. The costs of all the other goods, while not as extreme as the flour, have risen dramatically as well. If we look at the cost of our Tiny’s Burrito, for example, we have seen any type of margin shrink from a little to nothing. In all honestly, we are losing money with the Tiny’s as it stands on our menu right now. That’s not how we stay in business for long.

If you’ve noticed, our pastry prices have been edging up recently, too. That’s simply in response to the rising dry goods prices.

So as much as we don’t want to, we have no choice but to raise menu prices. However, we want to be firm on one thing: while our pricing has to go up, the size and quality of the entrees will stay the same. We WILL NOT raise prices and skimp on the food. If you feel any way different about that, please talk to Ryan or Carla so we can fix it immediately.

On the coffee side…

Okay, this is getting serious in the coffee world. The commodity market (“C” Market) for coffees has been–quite frankly– insane. In the last year, the C prices for Arabica coffee (and “specialty coffee” is only the top tier of the Arabica coffee) has risen a whopping 84%!

We get our coffee delivered in 150-lb burlap bags. Our last order was 4 bags and it cost the same amount as the previous 5 bag order!

Many industry experts have many different explanations for this…

• Damaging weather patterns in the coffee producing areas have severely limited the harvests
• Brazil, always the #1 exporter of coffee, is about to become the #1 consumer of coffee, too. Less for the world
• The instability in the Middle East is causing gas prices to fluctuate
• The general public can now bid on the commodity market. While that can work in the market’s favor, it can also work against it, as we’re seeing now.
• Plus, plus, plus…..

Some industry experts are predicting that the C market base price for pounds of coffee will approach $5/lb! Before the last year, coffee prices were hovering in the $1.20/lb for commodity coffees.

Now, you’re probably saying “Well, if your price is only $5/lb, why does this change the prices? Were you making a screaming profit at $1.20/lb?”

We wish.

• First, that price is for the commodity coffees. The stuff you find in the cans on the supermarket shelves, not in a true coffee shop. Our prices for green coffee ranged from $2.80 to 5.90/lb
• Then there’s shipping, which will range anywhere from $0.25 to 0.45/lb
• When you roast coffee you lose 18% of the mass to water loss. That puts our price per pound with shipping at $3.55 to 7.41 per pound.
• Then, add in the cost of the electricity and gas to make the coffee, the rent for somewhere to have the roasters, the labor dollar to roast, bag, and sell the coffee, the cost of the snazzy coffee bags, labels and ink, and all the other whatnot and we are darn lucky to make a buck, buck and a half off of every pound.

And that’s the prices as they stood 6 months back.

With coffee prices doing nothing but going up, we are also forced to look at pricing for the coffee side, too. With no end in sight with the increases, we need to be a little proactive here.

Starting Monday, all bulk coffee prices will be increasing by $1/pound. Don’t be surprised if that’s not the last jump you’ll see. Individual drink pricing will also be changing.

See, I figured it this way: I’d rather see incremental price raises over the course of a year than a large increase all at once, and I’m hoping you see it that way, too.

As with the food side, we promise to keep the quality levels high, if not even a little higher. If you don’t feel we are, let us know!

In short: yes, menu prices are heading northwards. We have no choice. With the way the world’s commodity markets are going, it won’t be our last price increase. But we promise to keep the same quality and quantity you know and love with both the food and the coffee.

Thank you for your understanding,

The R&R Gang