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If it’s expensive it must be better. Right…?



Rule #1 about pricing: If you charge a ton of money for a food or beverage, people will assume it’s worth the price.

What aspect of human nature does this illustrate? I’m not enough of a psychologist, sociologist or anthropologist to say, but I know it’s true. They assume that Petrus is better than any other Bordeaux because it costs so much. They assume that Mast Brothers Chocolate is the best in the world because one Sea Salt Chocolate bar costs $10 at Dean and DeLuca.

And now, apparently, they’re assuming that a cup of coffee from Finca Sophia must be better than any other coffee in the world because it costs $15. Yes, a cup.

I haven’t tried it yet, but really, how good can it be? I consider myself something of a coffee connoisseur. I’ve had a ton of coffee, everything from Kona to Kopi Luwak, brewed in every conceivable way, and I have to tell you, there’s no way a cup is worth $15 unless what you’re enjoying has nothing to do with the coffee itself and everything to do with what’s happening in your brain, the seat of expectations, fantasy and self-delusion.

But buzz—the perception that you’re not hip unless you’ve done or had a particular thing–works. The San Francisco Chronicle reports that Finca Sophia’s coffee is “already sold out” at the company’s Equator Coffee location, on 986 Market Street in San Francisco. Who would be buying it? Well, that part of Market Street is a little off the tourist path, but it’s not far from Blue Bottle Coffee, behind the Old Mint, a haven for local coders (and the people who love them), so I suspect Equator attracts the same crowd. And Twitter is located just a few blocks west, at 1355 Market. This stretch of mid-Market is, as all San Franciscans know, one of the hottest real estate areas in the city and a new mecca for young Millennials able and willing to buy $1.5 million studio condos or pay $6,500 a month rent for a one-bedroom flat.

Should we simply assume that coders all make $135,000 a year right out of college, are single and so have the discretionary income to spend on $10 chocolate bars and $15 cups of coffee? Not to mention $18 mojitos, $20 bars of soap, and whatever the going rate is for Pliny the Younger? It’s my impression that coders, who are after all just our era’s yuppies, feel like they might not even be alive in 10 or 20 years so they might as well carpe the old diem and spend all their money having fun today.

I went to @FincaSophia on twitter to see what the hip young caffeine-istas are talking about and couldn’t help pick up on the sense that the fascination has as much to do with wanting to keep up with the latest Big Thing. “Can’t wait [to try it],” tweeted somebody. “I found out about it too late,” tweeted another, who, apparently heart-broken, heard about Equator after they sold out. (They now say they’ve since received another shipment.) Tempting yuppies with Finca Sophia is like waving a red flag in front of a bull: you know they’re going to want the thing and will do anything they have to in order to get it.

And for what? I can’t believe that even a yuppie oozing discretionary income would spend that much for coffee on an everyday basis. Fine to try it once…it’s something to chat about. The convo might go like this:

Hey dude, y’know what I tried?

Enlighten me, dude.

Finca Sophia.

That super-expensive coffee in the Chronicle? Far out, dude. So…?

Awesome, dude.

Wow. Can’t wait to try it.

And so it goes.

  1. see Veblen goods for an explanation of this behavior

  2. Steve, et. al.:

    Back of the envelope math.

    “Assume” a cup of Finca Sophia gourmet coffee is 6 ounces.

    It sells for $15 a cup.

    That’s $2.50 per fluid ounce.

    A bottle of wine is 25 ounces.

    Priced like this gourmet cup of coffee, that’s $62.50 for the bottle.

    How many California Cabernets can you name that cost north of $62.50?

    (This in an era of “cult” Cabs that cost north of $250.)

    Just sayin’ . . .

    ~~ Bob

  3. Aside to Mike:

    And don’t overlook the phenomenon of Giffen goods:

    Named after Sir Robert Giffen KCB (22 July 1837 – 12 April 1910), a Scottish statistician and economist.

  4. Postscript.

    Let’s assume the $15 gourmet coffee cup is a more generous 8 ounce pour.

    That’s $1.88 per ounce.

    Multiply by 25 ounces.

    That’s equal to a $46.88 bottle of wine.

    How many California Pinot Noirs are priced north of $47 a bottle?

  5. Thanks for your clear and inspiring opinion !!!

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