The Java Dilemma: Saving on Coffee in Tough Times

Nov. 14, 2008 — -- The weak economy can be a buzz kill -- just ask one of the nation's most prominent coffee retailers.

Starbucks Corp. last week reported a 97 percent drop in fourth-quarter profits, a decline blamed in part on fewer U.S. consumers getting their caffeine fix at the popular coffee-shop chain.

If you're among the Americans cutting back on their coffee-shop java, chances are you've at least considered getting your caffeine fix at home instead … and doing so, experts say, doesn't necessarily mean sacrificing your taste buds.

"If you get a decent coffee maker and decent coffee, you can make great coffee at home and save money and enjoy it," said Jack Groot, the president of the Midwest Barista School and JP's Coffee & Espresso Bar in Holland, Mich.

So exactly what is a belt-tightening, amateur "barista" to do? ABCNews.com talked to Groot, coffee consultant Ed Arvidson and Consumer Reports' Robert Karpel to find out.

Plain Coffee

Achieving satisfaction from your standard cup of joe starts with great coffee beans. Beans from a roaster or a coffee shop will likely be more expensive than grocery-store coffee but they'll be fresher, Groot says. Expect to pay between $9 and $15 a pound.

Next, consider investing in a coffee grinder. This, too, is a matter of freshness. Groot says that buying coffee beans and grinding them yourself will ensure that grounds you ultimately use in your coffee will be fresher than a retailer's ground coffee.

Experts agree that burr grinders -- devices equipped with grinding wheels -- are superior to blade grinders, which as the name indicates, use metal blades to chop beans. A burr grinder, Karpel says, will run you between $60 to $250. Arvidson, a senior consultant for Bellissimo Coffee InfoGroup, says a decent grinder will cost at least $100.

And finally, after you've ground your coffee, it's time for the final step: the coffee maker. One of the most important things to look for in a home coffee maker, Karpel says, is its ability to heat water to the proper temperature -- between 195 and 205 degrees Fahrenheit.

Cuisinart coffee makers, Karpel says, have been rated highly by Consumer Reports subscribers and cost about $80, while Groot recommends machines made by Bunn, which run about $100 to $130, and Capresso, which are in the $170 to $200 range.

Save Money and Brew Coffee at Home

A $12 one-pound bag of beans will yield roughly 32 mugs -- say 10 to 12 ounces -- of coffee. To have one mug each day, you'll need to buy about 11.5 bags for the year, at a cost of $138.

Assume $100 for a grinder.

Assume $130 for a coffee maker.

Add that together and you get $368 for the year, or about $1.01 per day. A Starbucks "tall" (12-ounce) coffee at one New York store, by comparison, recently cost $1.75 plus tax. The 74 cents you'd save each day, assuming you're having a mug daily, would save a cool $270. If you buy the machines Karpel recommends -- a $60 coffee grinder and $80 coffee maker -- your savings increase to more than $360 per year.

Espresso and Lattes

If fancy, frothy lattes are your caffeine fix of choice, take heart. There are homemade alternatives for you too, but experts caution that for newbies, it can definitely be a bit challenging.

Once again, your mission starts with beans: For espresso -- a key ingredient in lattes -- the general rule is that dark roasts are better.

But Karpel says that in this case, grinding the beans yourself is less important. In his experience, he said, dark roasts, when ground, tend to grow stale less quickly than their lighter counterparts.

If you're still committed to the freshness guaranteed by grinding yourself, however, make sure that the coffee grinder you buy can produce superfine grounds. For an espresso-ready grinder, be prepared to spend between $100 and $300 at the least, Groot says.

As for espresso makers, Groot prefers the pump-style variety. It's more expensive, he says, but it also produces better espresso.

Many espresso makers come with grinders attached. Others, meanwhile, use pods -- ground espresso beans in small packets made by the same manufacturer that produced the espresso maker.

Arvidson says that overall, you can expect to spend at least $200 or even as much as $1,000 or more, while Karpel says he's pleased with his Gaggia espresso machine. Depending on the model, Gaggias can cost between $200 and $700.

Flavored Lattes

Now, let's do the math again, this time for a latte:

Espresso-blend beans can be more costly than others, so let's assume a $15 price tag for a 1-pound bag. A typical 1-pound bag has enough for 56 shots. If you drink 1.5 shots -- which is equivalent to about 1.5 ounces -- a day, that means you'll need about 10 bags per year at a total cost of $150.

Assume $200 for a grinder.

Assume $500 for an espresso machine.

According to the U.S. Department of Agriculture, milk cost an average of $3.72 per gallon in October. If you use 6 ounces of milk for one latte each day -- after steaming, the milk will expand and will actually result in more than 6 ounces -- you'll need to buy about 17 gallons of milk, which amounts to roughly 2,190 ounces, per year for a total cost of about $63.

For a flavored latte, add at least half an ounce of syrup. A 25.6-ounce bottle will provide enough for more than 51 servings. To have enough syrup to last you a year, you'll need at least seven bottles, for a total cost of $56.

In total, your homemade latte -- assuming you use one shot of espresso a day -- will cost $969 for a year or $2.65 per day. A tall, flavored Starbucks latte purchased recently in New York, meanwhile, cost $3.50 before tax. Your homemade savings? It's $310 for a year. Settle for midrange coffee grinders and espresso machines -- at $100 and $200 each -- and your savings soar to $708. Follow Karpel's advice and skip the expensive grinder -- or skip the flavorings -- and your savings are even greater.

Stove-Top Espresso

Believe it or not, you can also make espresso without investing in an expensive espresso maker at all. Your final product won't be an exact replica of machine-made espresso but, Arvidson and Karpel agree, it'll still taste quite good.

What's their secret? It's called a macchinetta -- an espresso maker that's especially popular in Italy and can cost less than $20. Instead of requiring a plug, the macchinetta is a stove-top machine powered by the flame below it. Like a traditional espresso maker, you'll need ground espresso and water to use it. Unlike a traditional espresso maker, it won't include a steam wand necessary for steaming milk and creating froth.

To create froth, Arvidson recommends pouring heated milk into a French press -- a device more commonly associated with coffee brewing -- and pumping it several times. Within two minutes, he says, you'll create a "beautiful velvety foam almost like shaving cream." A French press, he says, can be purchased for about $20.

With equipment costs of $240 total (including a $200 grinder) along with ingredient costs of $269 (for espresso beans, milk and syrup for a year), you'll spend $509 for one year of lattes, or $1.40 a day, for a total savings of nearly $767. Trade the grinder for store-ground beans, and your savings skyrocket to more than $968.

Experts caution that successfully making your coffee -- particularly espresso and lattes -- won't always come easy. It requires practice and homework, figuring out what roast works best for you and what techniques are best for steaming milk and manually "tamping" -- or condensing -- your ground coffee.

Groot says that consumers should also remember that by sticking to their homemade brews, they'll miss out on one of the best parts of being a coffee drinker -- actually spending time in a coffee house.

"It's more than just coffee; it's a social experience," he said. "You can't put a price on that."