We recently had some constructive dialogue with a cafe owner in the Okanagan who was struggling with rising costs and was trying to balance the cost and flavour of our Masala Chai at her cafe. It got us thinking about similar struggles we have faced in our past here at JagaSilk.
Back in 2008, when the financial crisis hit, we saw our Japanese invoices increase by 30% in one week because of the currency exchange. The positive part of buying tea fresh every month quickly unraveled when faced with world events beyond our control. We had to start buying maccha in bulk and packing it down ourselves. We started selling refill pouches instead of a tin with every bag, and made some big changes to get back into a sustainable place.
Tips to Cut Costs and Keep the Flavour
2023 is shaping up to be a challenging year for us all. The culmination of COVID-induced, sky-high shipping rates, Russia’s invasion of Ukraine, causing energy prices to go way up, and interest rates being increased to combat inflation, mean that it is likely that we are all looking at ways to move forward, hopefully cutting costs without sacrificing too much of our vision.
For our part, we are reminded of the benefits of simplicity. We used to do 1.0g doses of maccha for traditional (and americano-style) maccha and 2.0g for milk drinks. We consolidated both to 2.0g to make everything simpler, but it is possible to move to 1.8g and save 10% across the board if you so choose. We did some tests, and this is still lovely in an 8oz~10oz drink. We always suggest $2 for an extra gram which you could automatically add or simply recommend for larger drinks. Maccha americano tastes great with 1.5g, a cost cut of 25%.
For loose teas, combining the first and second steep allows you to use half the tea. This does not work for Fast Bar teas, but brew bar teas can taste fantastic made in 1 ~ 3 infusions, all combined into 1 cup. There is definitely a benefit to a single steep for to-go customers as it allows you to focus on other things, but if you have a brew bar for your coffee, consider doing a gongfu-cha style service for your specialty teas like the Green 2 (currently Biluochun), the wulongs, and the Crimson 2 (currently Jin Luo).
There is less room with the tea lattes to cut costs, but if you have not already cut 12oz drinks for 10oz drinks, you should really consider it. Everything tastes better smaller, and the visual difference is not that different. Saving 30ml~60ml of milk every drink is not a bad thing either. All of our tea lattes we recommend dosing the grams to match the drink size: 8g for an 8 oz, 10g for a 10 oz, etc. So if you can make your go-to drink size a 10 oz, you are going to be able to dose 2g less every go. (And Maccha Cortado tastes fantastic with 1.5g, like the one in the picture above).
How we Handle Rising Costs at JagaSilk
At JagaSilk, we will roll with the 2.0g maccha drinks across the board because we think it tastes better. But we are charging $5 for a Cafe Standard Maccha that has no milk, and $6 with milk. If you are charging less and want to increase the price but are hesitant to do so, please utilize our knowledge articles on our website to educate your staff and customers (please print out if you like or to use for marketing purposes).
Careful cost management, communication to the end customer, and an educated staff go a long way. If you have not had a maccha or loose tea training seminar in a long time, please check out the dates and register.
We are seeing a trend where shipping costs are beginning to stabilize and there is reason to hope for less cost increases this year. Our fingers are crossed. This is also an opportunity to release a cost effective smaller maccha drink and do cortados and 5oz traditional cappuccinos, release gongfu-cha tea (as it uses much less tea) and to go smaller on all your drinks. Cost management can present some amazing opportunities to grow the vision.