Why does iced coffee cost more than hot coffee?

Make Me Smart March 8, 2023 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kimberly Adams

Oh, it’s time. We should go.

Kai Ryssdal 

Look, I’m just… (music cuts him off)

Kimberly Adams 

Hello everyone. I am Kimberly Adams. Welcome back to make me smart where we make today make sense.

Kai Ryssdal 

I’m Kai Ryssdal. This is what do you want to know Wednesday. You bring the questions we bring the answers. You can get your question on the podcast by leaving us a voicemail at 508-U-B-SMART, or you can email us and we’ll just read them at makemesmart@marketplace.org. Either way works, we can do both.

Kimberly Adams 

Yes. All right. Let’s get to our first question of the day. Ray in Oregon wants to know, quote, “are SNAP benefits intended to meet a person’s entire food needs for the month or is it just considered a supplement to those food needs?” Why don’t you go ahead?

Kai Ryssdal

You are taking this one?

Kimberly Adams

I’ll take it you know what? This is a very Washington thing. Okay. So first of all, a little bit of very refresher. SNAP stands for Supplemental Nutrition Assistance Program. Back in the day that used to be called Food Stamps. We don’t do that anymore. But it’s supposed to help people with low incomes buy food for themselves and their families by giving them a monthly benefit on an EBT card. That the card itself is actually what used to be called food stamps, because they used to actually be little coupons, and stamps, but now it’s like a little debit card. And so a households monthly benefit is determined by the net income of the household, as well as the family size and a few other factors. But back to the original question about whether it covers everything. SNAP benefits are supposed to be supplemental since hence, Supplemental Nutrition Assistance, supplemental and assistance. Not the whole thing. So they’re not supposed to pay for a household’s entire monthly food budget, although some people need it to. The government expects that SNAP recipients are going to contribute 30% of their net income to paying for food if you have income. And there’s all sorts of formulas for how that works. The Center on Budget and Policy Priorities has this summary that kind of wraps our heads around it: “Consider a family of three. If that family had no income, it would receive the maximum benefit of $740 per month. If it had $600 in net monthly income, it would receive the maximum benefit (which was $740) minus the 30% of its net income, (so 30% of that 600 which equals $180. So they would knock that off the 740). Leaving that family with $560 per month.” Now, that said the national average monthly benefit for a household of three is $577. But those benefits differ by state. And Craig Gunderson, an economics professor at Baylor University told us that while the idea of SNAP is to supplement, the maximum benefit is in theory, supposed to cover a household’s monthly food expenses, but as I’m sure many of you can attest, having been to the grocery store, $740 a month ain’t gonna do it. Gunderson research for the Urban Institute shows that before the government raised the maximum benefit and 2021 during the worst of the pandemic, SNAP benefits fell way short of average meal costs. In 96% of us counties, the maximum SNAP benefit would not cover your average meal costs. Then after the government increased, that SNAP benefits, that percentage of places that the money wasn’t enough to cover, went all the way down to 21%. However, those pandemic emergencies that boosted SNAP benefits have already expired or will expire soon. And so a lot of people that had that benefit that maybe was enough to cover their food expenses. It’s going down now and so it’s probably not going to be good for a lot of folks.

Kai Ryssdal 

Yeah. And food inflation costs continue apace, you know?

Kimberly Adams 

Yeah. All right. This next one seems to be for you, Ronda Scott tweeted this question for you: has anyone quantified how much business California does with Walgreens yet? That’s from that story we talked about the other day.

Kai Ryssdal 

Right. So this is because Walgreens has said it’s not going to dispense abortion pills in states where, first of all, it’s legal, but also in response to letters from about 20 or so Republican state attorneys general who said “We will challenge you if you do this” and they cited a 19th century mail law that, in theory would prevent Walgreens from doing this. In theory. Anyway, here’s the deal. And here’s what happened. And here is my theory about what happened. So the governor of California, Gavin Newsom, and we are an abortion friendly state, right? We provide women’s health care, and we want women to be able to get health care no matter what kind of health care that is. The governor came out when Walgreens got in the crosshairs and said “we are not going to do business with Walgreens.” And he did it on Twitter. And right… And then when everybody noticed the governor of California, which is the biggest state in the Union, as we all know, said that the biggest state in the union is not going to do business with a major pharmaceutical company or a major pharmacy company, and start asking questions, his office basically repeated his tweet in statements and responses to the press and did not answer any questions. So the short answer is no, we don’t know what the state of California is going to do because the governor of California much like oh, say a former president of the United States, shot this out on Twitter without really thinking about it, and now has to scramble to figure out exactly what it’s going to mean. So here’s what it could mean. It could mean that Meta-Cal, which is the state’s Medicaid arm, will not allow Walgreens to be a participating provider. It could mean the state’s prison system, which has a huge population merely because of our size and has inmates with medical needs will not be allowed to use Walgreens as a provider. The answer is: we don’t know. And it’s actually a political problem for Newsom because now he’s gonna have to put up or shut up having made a big stink about this. But the details are still very, very murky, because he has not said what he’s going to do and he has not responded to questions about what he’s going to do. It’s just kind of, we’ll see.

Kimberly Adams 

Yeah it’s gonna be hard to do that from like I can imagine Walgreens suing saying that “we’re being discriminated against for, you know, religious or political beliefs” or even like if their bid comes in lower to provide services, and they say no like that that just seems like a big legal mess. But we will see.

Kai Ryssdal 

Yep and also sorry, yeah, bureaucracy is real here too. Because you better believe that the Medi-Cal computer systems which talk about where you’re allowed to get your prescriptions filled, and the California Bureau of Prisons’, just for example, computer systems which talked about filling prescriptions, do not talk to each other. So somebody helped me figure that one out. All right. Newsom has made himself a mess, right? It’s it’s going to be super challenging. Super challenging.

Kimberly Adams 

Well so did Walgreens now.

Kai Ryssdal 

Well, well, well, oh my goodness, and you better believe all the rest of them like the CVS and all that happy to sit back and just go “All you pal. All you.” Alright, anyway, next question. Here you go.

Ryan 

Hello, Make Me Smart. This is Ryan in Rice Lake, Wisconsin. I’m hoping you can make me smart about why cold coffee is more expensive than hot coffee. For example, at the nearest Starbucks, a 12 ounce hot coffee is $2.65. While a cold brew coffee is $3.95 Same ingredients right? Why the disparity in price? Thanks for making me smart.

Kai Ryssdal 

That is amazeballs.

Kimberly Adams 

Let me give the caveat. I’m going to answer this question. But full disclosure, I am not a coffee person unless I’m in dire straits. And as as my very good friend back in Missouri likes to tell me “coffee is not for you, Kimberly” because

Kai Ryssdal 

Oh that’s funny. Wait how come? How come? Does it just make you all jittery?

Kimberly Adams 

All jittery, bouncing off the walls, like just really high strung. I remember the first time I had Turkish coffee when I was living in Egypt. I was awake for two days. And and like gives me the shakes and everything. So if you see me drinking coffee, just know it’s a real bad situation.

Kai Ryssdal 

Oh okay. I’ll get out of the way.

Kimberly Adams 

But yes, get out of the way. Anyway, to answer Ryan’s question, many coffee shops will say that making cold brew just cost them more money than making regular coffee, and therefore they’re charging you more. So for starters, cold brew requires a different brewing process, which takes a lot longer than brewing hot coffee. So with hot coffee, you have the coffee grounds and you drip water over it, or you squeeze it down a little French press thing, whatever you’re doing, and then you get the coffee. Fine. But with cold brew, those ground beans are soaked in cool water for 12 to 24 hours. And that creates a coffee concentrate. And then that’s what they use to make the iced coffee. Also, iced coffee gets served in plastic cups as opposed to paper cups, and they can cost twice as much. And then there’s straws which you use for iced coffee that you don’t use for hot coffee because that would burn and the napkins and things and all those extra bits and bobs add up to a higher cost for each drink. Plus, oddly enough, and this was interesting in the prep that I didn’t know, the ice that goes into each cup increases the costs because a lot of smaller coffee shops don’t have ice machines. Because why would they? And so they end up either having to rent an ice machine out or buy an ice machine, although those are getting cheaper. Why do I know this? Because I recently looked at the cost of ice machines because I throw a lot of parties but whatever. I did not buy one. I did not buy one. Not saying I won’t. I’m just saying I didn’t. But anyway, a lot of these smaller coffee shops don’t own ice machines. So they have to rent one or buy one or buy ice from the store. And all of that, again increases costs. However, not everybody believes this argument about the disparity in price that makes that much of a difference. In a piece for Vice, they did an interview with a professor Markmam Ellis author of “Coffee House: A Cultural History.” And they said that coffee chains know that cold and iced coffees are in higher demand during the warmer months of the year, so they just charge more for it. And so some people apparently in order to save money on iced coffee, they order a regular coffee with a side of ice. But if you try this, it’s probably not going to taste the same as the iced coffee. Because again, it’s not that coffee concentrate, it’s just going to taste like watered down coffee. And there’s also the option of making your own cold brew at home the way that our wonderful intern Antonio does. But and he says that the real work there is just the stirring and the waiting. And the added benefit then is that you can drink it whenever you want because it keeps a week in your fridge. But I will take Antonio’s word for it. Because if I have it, nobody’s gonna want to be around me.

Kai Ryssdal 

True story. The first time I had iced coffee was at some hipster place down in the arts district in Los Angeles. And I was like yeah, whatever fine I’ll have an iced coffee. So I asked for this iced coffee. They get it for me. I pay my you know, five bucks, whatever it was, took a sip and I asked them if they could microwave it because it was just terrible. Terrible. And they of course said “no, I can’t microwave that. Shut up.”

Kimberly Adams 

But doen’t it make it gross? If you microwave iced coffee?

Kai Ryssdal 

Yeah, no, no, I have a there’s a what… Maybe the top domestic dispute in my house, and I should say we have a very peaceful relationship my wife and I do, she microwaves her coffee in the morning after the first cup gets cold and I’m like, “Oh, God, no, no. No.”

Kimberly Adams 

You can get her one of those keep warm cups that has a little plate that you sit it on and it keeps it warm.

Kai Ryssdal 

She like walks around with it. No I just I’m happy to let her do whatever bestardization she has to do in her coffee but it just kind of grosses me out. I’m a coffee purist.

Kimberly Adams 

Alright, time for the last question of the day. You tried to, like I can see you scanning back through everything you said. Bastardization is the question I was wondering, the word I was wondering about.

Kai Ryssdal 

Gotcha.

Kimberly Adams 

We can cut all that out. That was just me being curious. Anyway, I didn’t have coffee today. All right, time for the last question of the day. So Kai, and I love to talk about space and space exploration. So Kendall wrote us this question. Have you watched and are you fans of the Apple TV series For All Mankind? Kai you recommended this to me.

Kai Ryssdal 

I do. So you have not watched it, right? I have not no. Okay, so I don’t have to worry about spoiler alerts. I’m a huge fan of it. It’s an alternate history of the space race between the United States and the Soviet Union. There are three seasons out. I am on… I finished season two, so no spoiler alert. Thank you, for anybody on the Zoom or listening. It’s really good. I really, I really like it. And it’s one of those where you know, you order Apple TV for a month, you pay your 10 bucks and then you watch all 12 episodes or whatever of the season and maybe some Ted Lasso and you move around long. It’s really good. I think it’s really, really good. It’s really good.

Kimberly Adams 

I will add it to the list.

Kai Ryssdal 

Did you see or hear perhaps this morning on on Morning Edition, the story about the 3d printable rocket?

Kimberly Adams 

No, I didn’t.

Kai Ryssdal 

So there’s this startup that has made a 3d printable rocket. It’s 110 feet tall was supposed to launch today, but they had to scrub for some reason. It’s called Terran. T-e-r-r-a-n-1 is the name of the rocket or it’s the name of the program? I think it’s Relativity is the name of the rocket company. Anyway yeah 3d printing rockets, which to me is just wild. Just wild. That’s pretty cool. It was cool story this morning. So let me give let me give the cross corporate plug here for Morning Edition.

Kimberly Adams 

Yes. Well, well, while we’re doing plugs, I’m going to do my own. Because if you are enjoying the cool stories that we bring you and hear about space, about coffee apparently, and all manner of other things. It’s because of listeners like you, and we really appreciate your support. And we are committed to have committed to having a very diverse newsroom that represents the public that we serve. And, you know, I can’t help but mention today is International Women’s Day. And it’s not just on our staff that we think about being representative of all genders and diversity and all of its wonderful, glorious forms, but also in terms of the voices that we amplify across our platforms: the sources and the experts that we reach out to from underrepresented groups. I mean, we’ve talked about your weekly rap Kai, and how it’s got this lineup of women that you would never hear from or see in that way in a lot of other news outlets. And these voices are often really left out of business and financial news and we really work hard to do that. But we can only do it with your support. So if you are able, in honor of International Women’s Day, and in support of the inclusive journalism that we do at Marketplace and at Makes Me Smart, we would really appreciate that donation.

Kai Ryssdal 

You gotta give them the URL marketplace.org/givesmart

Kimberly Adams 

I was handing that off to you. That was supposed to be a handoff to you.

Kai Ryssdal 

Oh! Marketplace.org/givesmart. Please. Thank you. Jayk! Jayk!

Kimberly Adams 

Radio professionals.

Kai Ryssdal 

My lordy. Make Me Smart is produced by Courtney Bergsieker. Elean Rolfes writes our newsletter. Our intern is Antonio Barreras. Today’s program program was engineered by Jayk Cherry.

Kimberly Adams 

Our intern and coffee, cold brew aficionado apparently. Ben Tolliday and Daniel Ramirez composed our theme music.

Kai Ryssdal 

Ooh Ooh. I forgot. I forgot I saw Ben today. Ben came by the office. He looks great! He’s having a good time. He’s got two kids now. His baby is six months old. It yeah, he’s doing great. He’s doing great. Looks exactly the same. Yeah. He he’s such a good guy. Anyway sorry.

Kimberly Adams 

He is. Well, he helped along with Daniel Ramirez to compose our theme music and our acting senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the Executive Director of Digital. And we have way too much fun on this show.

Kai Ryssdal 

We do.