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Rising Costs

Rising Costs

January 17, 2025
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The rising cost of goods and services has always been a reality of our economic system. What challenges us most is the increasing frequency and extent of these price hikes.

As David Attenborough once said, "We are at a unique stage in our history. Never before have we had such an awareness of what we are doing to the planet, and never before have we had the power to do something about that." Climate change has significantly impacted agriculture, altering how crops are cultivated, reducing yields, and affecting the quality of produce.

However, climate change is not the sole factor driving rising costs. Price increases are compounded by shifts across the entire supply chain. The global economy is accelerating, and the resulting pressure on the cost of living ultimately influences how much we all pay for goods and services.

At Blendsmiths, we are deeply connected to industries like agriculture, freight, and manufacturing—sectors that have experienced substantial cost shifts in recent years. While we cannot entirely avoid these changes, we prioritise navigating them thoughtfully. We strive to maintain a balance between running a sustainable business, supporting our employees, and ensuring customer satisfaction. Wherever possible, we aim to find a happy medium between thriving as a business and doing right by our community.

Rather than resorting to significant price hikes, we focus on internal process optimisation. This involves streamlining operations to enhance flexibility when changes occur. For example, we invest in forecasting and purchasing packaging in bulk, despite the initial expense. Additionally, consolidating our suppliers reduces costs and shipment volumes. These strategies not only help control expenses but also align with our sustainability goals.

How Independent Café Owners Can Adapt

Frequent menu price increases are not ideal, and it’s understandable that no one wants to risk losing customers during challenging times. One approach we recommend is shifting focus from kilo pricing to the cost per cup. For instance, Blendsmiths' price adjustments have typically been in the range of £1.00, which translates to just £0.01–£0.02 per cup. This incremental change is manageable and more palatable for customers, who generally understand the broader economic pressures.

We recognise that our products are just one component of your overall costs, and price increases across multiple suppliers can compound the challenge. In such cases, adopting smarter sales strategies can help offset rising expenses.

Don't be afraid of changing your prices, it doesn't always dictate consumer behaviour - consumers will always pay for good quality product AND the experience that goes with it.

Cross-selling, for example, can be a valuable tactic to maximise sales and reduce waste. Offering deals like, “Pair your afternoon Pink Chai with a cheesecake for half price,” encourages customers to try products with limited shelf life, which might otherwise go unsold or discarded. This approach not only minimises losses but also enhances the perceived value for your customers.

By adopting thoughtful strategies and focusing on incremental changes, café owners can navigate these challenges while maintaining the trust and satisfaction of their customers.

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