☕ Coffee Journey - Latte Index

Photo by Engine Akyurt from Pexels

Welcome back to my coffee themed A - Z / ultimate blog challenge. 

Today we'll deal with economics, foreign currencies and purchasing power.

What are you saying? You came here for the coffee?

Sure, absolutely!

Today I'm serving a dark, rich espresso, balanced with steamed milk and a light layer of foam.

By the way, these layers do not bleed into each other because they all have a different density: Milk foam on top, coffee in the middle and warm milk on the bottom.

Interestingly Starbucks took the first letters of the word LATTE to put together a reminder on how to deal with customer complaints:

We're moving on from psychology and coffee preparation and talk about the "Latte Index". 

Have you heard of it? No?

It was created by The Economist, based on its original "Big Mac Index", which is a lighthearted guide to whether currencies are at their correct level. Using this index, the purchasing power of every currency can be compared to the cost of a Caffè Latte in USD.

Interestingly back then the average price of a Starbucks Tall Latte in the U.S. was the same as the average price of a Big Mac. USD 2.80.

Apparently there's also a "Domino's medium pepperoni pizza index" and a "Nobu black cod with miso index". Upon doing some more research I read that they're going crazy tracking non food items as well, such as IKEA Billy shelves and Apple iPods. Who knew?

So what did economists find out as they were tracking the price of a Starbucks Latte in major cities in 29 different countries? (29? This hurts my eyes. Could they not find 30 countries for their statistics? Starbucks has over 34k stores in at least 80 countries these days!) 

The index can measure how many coffee cups a minimum-wage earner can purchase with their hourly pay. In countries with a strong currency, it would take more Dollars to buy a SBUX Latte than in countries with a currency that has less buying power. 

What do you need to know to interpret this chart? 

• It's almost ten years old (2013)
• All prices are converted to USD
• They are compared to the SBUX Latte price in NYC, which serves as a benchmark. Back then it was USD 3.45

Source: The Wall Street Journal

So I could have told you right at the beginning that my country would be the most expensive. We are in almost every aspect. Earlier this year I wrote about what money can buy in Switzerland, from filling your tank to spending a weekend skiing in the Alps. 

In my country's defense, labor, rent and grocery costs are above average compared to our neighboring countries and the rest of the world. 

I could talk about milk prices, chocolate and cheese in Switzerland for hours. Actually I did. In this post. However, I think it's enough for today.

Except I heard that Paul McCartney demands that Starbucks not charge more for non-dairy milk than they do for cow milk. While I can see his point - if you're lactose intolerant, you're punished in so many ways anyway, you should not be forced to spend more on your coffee beverage - I think it's a question of quantities and logistics. 

I asked my friend, who is a Barista with SBUX Zurich, and she says soy is the same price, only oat or almond costs 70 cents more. As an estimate about a third of her customers ask for non-dairy for various reasons, some of them live a vegan lifestyle, and don't complain,

So if you're a Latte drinker or Big Mac eater, how much do you pay at your end of the world?

Zurich, Switzerland, April 2022 (Prices in CHF)