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Why do I pay more for an iced coffee than a hot coffee?

Coffee prices aren’t as simple as you might think. Sure, if you are buying an iced coffee that was formerly hot coffee that the shop or restaurant has simply poured over ice, you should expect to pay the same price. But if we’re talking cold-brewed coffee, that’s a whole different story. It has to do with economics.

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Making cold brew takes more time. While a hot drip coffee can be made in a matter of minutes, making good cold brew takes hours: eight to 12 if we’re being specific. That means the coffee shop needs to devote space and staff hours to the cold brew, two things that businesses charge customers for. Additionally, making cold brew typically requires more coffee and water than making a hot coffee. These resources also cost money, and therefore affect the final price. Think of it this way: If it cost you $1 to make one item and $1.25 to make another, you’d never sell both for $1.25.

Finally, and most importantly, cold brew costs more because we consumers are willing to pay for it. It turns out in the summer, more of us would like to drink cold coffee — even if it costs a bit more. Supply and demand is a very real thing.