Coffee As A Status Symbol: Why People Would Pay More For Coffee

Ever been to a coffee shop, where they charge more for the same coffee, because they have a different logo on their cups or walls? That's just one example of how logos shill products and like products logos have convinced consumers to pay more, logos have convinced brands to spend their marketing budgets on prestigious or exclusive logos. This can be a monetization tactic, or it could have a very high ROI.

Despite some of the most popular opinions on this topic, we're not just talking about brands like Starbucks and their iconic mermaid. Coffee is a sign of conspicuous consumption and a way to signal certain qualities in its buyers that they afford, both literally and metaphorically. Coffee always appears more expensive, but why? If a lower-priced coffee had the same branding on its label, could the demand for a more expensive coffee be still found?

High Demand For Coffee

As an industry, coffee has a fairly young history and yet, it has already become an international commodity, traded and transported in the same way as oil and grains. The reason for this, of course, is that people across the world need coffee and they need it now more than ever. With such high demand comes the opportunity for a coffee producer to increase its revenue.

While coffee is a luxury good, it is also a basic need and as such there is a market for it. The problem is that this market is highly competitive and cutthroat. There are more, than fifteen billion dollars currently spent annually on coffee, the world's most popular beverage after water.

While the United States and Europe rely heavily on imports, many countries across the globe, especially in the developing world, have become self-sufficient in coffee production. In fact, some countries like Costa Rica, Colombia, and Guatemala have even become major exporters. The reason for this is simple, they have plenty of land and the expertise to grow high-quality Arabica coffee.

But the same qualities, that make these countries good at growing coffee also make them good at competing for the same buyers and thus their own supply is often tied up in the long-term.

In order to meet the growing demand for coffee, many small-scale farmers have begun growing additional crops to supplement their incomes, as well as diversifying their production to less labor-intensive crops. However, this has had the unfortunate effect of making these smaller farms less stable, often more prone to failure. Coffee provides an important part of the livelihoods of many people around the world.

What Makes Coffee A Status Symbol?

It's easy to see why coffee is so popular, and why it is a status symbol. Coffee is a cultural icon and a daily part of the work routine for so many people. It brings a sense of energy and focus to those who partake in it. While these attributes may be desirable, they are also the very definition of superficial. The definition of a superficial product, or a sign. Coffee can be made and sold at any price, but it's still coffee.

So what makes coffee a sign? Well for one thing there is the matter of marketing. Brands are willing to pay large amounts of money for exclusive rights to images and names. The result is a marketplace where brands are willing to pay top dollar for signs that symbolize their value. Another thing that makes coffee a sign is how much it costs.

Coffee producers are also susceptible to this sort of thing due to the nature of their product. Even if they are willing to sell their product for cheaper, they still want to be able to put a price tag on it that makes it seem worthwhile.

Finally, coffee has a certain reputation. While most people have a general idea of what coffee is, not everyone has a clear and distinct idea of what good coffee is. People tend to believe that coffee, like wine, is an elitist product that is only for the rich. The reason for this is simple, people rarely make the effort to seek out higher quality coffee.

Why People Value Coffee

The reasons people value coffee are the same reasons they value anything else; necessity, desire, and cost. For anything to have value, someone has to be willing to pay for it. As a basic commodity, it's only valuable in terms of what you can do to make someone else's life better. That being said, many people are willing to underwrite the value of coffee. There are two basic categories of coffee consumer.

There are the habitual coffee drinkers, most of whom buy coffee on a daily basis. These people are used to the taste and so the coffee they buy is a reflection of their mood and their lifestyle. This may be a complete waste of money for them, considering they're not looking for a new or distinctive experience, but it can be a profitable investment for a coffee manufacturer who targets this market.

But there is another, larger group of people who don't usually buy coffee on a regular basis. These people are seeking a more refined and luxurious experience with their coffee. They know the taste of good coffee, but they are willing to pay much more for an enhanced experience.

This second group is more valuable. They will gladly pay for the privilege of being able to consistently experience high-quality coffee. The market for these people is very dynamic and variable. They will only be willing to pay for high-quality coffee if they can experience it on a regular basis. The market for coffee is highly competitive and there is a lot of waste. The industry could stand to make more profits by focusing on the needs of these consumers.

So what do you think? Which group of people do you think will pay the most for coffee? Discuss.

Thank you for reading.