Here’s why prices are going up at coffee shops around Denver

Maybe you’re keenly aware of the struggles facing your favorite neighborhood restaurants or bars during the pandemic. But have you noticed the changes brewing behind the counter at your local coffee shop?

Over the last six months, a handful of independent cafes with locations around Denver have raised their prices for a single cup. Some of these businesses are rounding up to the nearest dollar, while others are increasing costs to customers by up to 50%.

There’s a good reason for that. At a time when the entire hospitality industry is collapsing, these independent coffee shops are taking a stand (and getting national attention along the way). Owners and employees of these businesses say it’s time the hidden costs of coffee come out.

So the question is: What are you really paying for when you buy a cup of coffee for almost five bucks?

Kaitlyn Bates works as the director of retail operations and also behind the counter as a barista at Huckleberry Roasters. She says the reasoning for her shop’s pandemic “price bump” to $4.50 for a 12-ounce brew is threefold.

First, her employers had to lay off nearly 90% of their staff six months ago, she said. Like most other small businesses, theirs wasn’t prepared to financially weather a pandemic, “and we want to be able to survive things like this happening again,” Bates said.

Second, Huckleberry pays for health benefits, sick leave and time off for its employees, and it needs to continue offering that now.

“And lastly, we want to make sure that those we source our coffee and products from are paid what is deserved, too,” she said. Once customers understand that “increased prices aren’t just going in the pocket of one person, they are fine paying more,” Bates added.

But she acknowledges that other customers haven’t warmed to the shift: “Of course there were some unhappy people who left,” she said.

Another Denver-based shop, Amethyst Coffee, took the movement a step further by increasing prices to $4.75 for a small coffee while doing away with tipping altogether, in order to bring all employees up to a wage equivalent of $50,000 a year. Following the change in May, barista Winn deBurlo said he has noticed a similar show of support, overall.

Tipping is just “a system of wage suppression,” deBurlo said. “It is … structured to capture the value that workers create and turn it into profit for owners.”

Back when Amethyst first opened in 2015, its owners fought hard to justify their $3 price tag on a cup of coffee, according to their Instagram. Five years later, their new price of $4.75 likely won’t be the last, they say.

Not one-size-fits-all

Others in the industry are fighting to maintain coffee prices to avoid discouraging customers during an already uncertain time.

Queen City Collective Coffee’s owners Luke and Scott Byington say they’ve discussed raising prices but are doing what they can to keep their coffee at $3 a cup.

“Coffee at the end of the day is always going to be a commodity,” Scott Byington said. “I don’t think it’s ever going to be at the level of a fine wine or something like that.”

To manage their costs, the Byingtons rely on direct trade with producers around the world and good relationships with landlords here in Denver. They make sure members of their small team earn at least $20 an hour — including tips — if not $30 or more. And, for now, they take health care on a case-by-case basis, asking employees to come to them if they need help.

“Is it a long-term, sustainable thing? Who knows,” Scott said of the model. “And is it something that can be copied and pasted from one business to another? Probably not.”

Because of variations in rent, debt and other business-specific financials, it can be hard to generalize the true cost of a cup of coffee, the Byingtons warn. But they can pay farmers at a rate well above coffee’s commodity price, and then continue that practice down the line.

“I think a lot more power is starting to be handed to producers now,” Scott said. “They are starting to feel the empowerment of this movement.”

To bring the empowerment full circle, shops like Little Owl Coffee in Denver take their employees directly to the source, offering “origin” trips to places like Central and South America as incentives for employees.

Little Owl also provides health benefits, continuing education and quarterly profit sharing, according to founder Seanna Forey, whose staff makes on average $27-$34 per hour with tips.

Like Queen City, Little Owl hasn’t raised its prices above $3 a cup during the pandemic. “It’s been really, really tough, but we just decided not to rock the boat,” Forey said. Still, her business is growing, with a new roasting space and another cafe on the way downtown.

“The entire (Little Owl) philosophy is having our customers feel one-hundred-percent comfortable, but even before that … our focus is really our team first,” Forey said. “I grew up in a restaurant family and had worked as a waitress, and I realized that if I really wanted to have something sustainable, that was the only way that I could see it.”

When Forey opened Little Owl seven years ago, her goal was to approach coffee from a “hospitality perspective.” Now, she says, there’s an entire community of like-minded coffee businesses in Denver and “so many real careers” for workers who want to stay in the industry long-term. Then it’s up to customers to decide through that first purchase of the day which companies to support.

“And we really try,” Forey said. “It’s hard because we’re so small, but we really try to show people when they start with us that they can have a path forward.”

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