Reasonable or a rip-off? The big cost question during iced latte season

Have you found yourself paying more for an iced latte than you do for a hot one? In some cases it may be justified, but not always.

Is it reasonable for cafes to charge more for an iced latte than they do for a hot one? Yes and no. Source: Getty / Mariia Skovpen

Key Points

• Some coffee drinkers have found themselves paying more for an iced latte than they do a hot one.
• It's justifiable in some cases but not always, those in the industry say.
• The container, ingredients and labour involved can also play a role in the price of an iced latte.

Spring is here and as the weather warms up, more coffee drinkers switch from a hot drink to an iced version — but the seasonal change in coffee orders has some forking out more than they had in the cooler months.

The price that caffeine drinkers who opt for a cooler beverage are paying has sparked debate. Hundreds of users on social media platform Reddit weighed in over the price of an iced latte recently after someone shared that they had paid $8.50 for the chilly brew.

So, is an iced latte more expensive than a latte in Australia?

Iced latte vs iced coffee

Coffee roaster and cafe owner Skye Harrison said to answer this, it was important to differentiate between an iced latte and an iced coffee.

An iced latte generally consists of either espresso coffee or cold drip coffee, milk, ice, and perhaps sugar.

An iced coffee can have additional elements such as ice cream, cream, extra flavourings or blended ice if it is a frappe style, as well as coffee and milk.

Joshua Swiers and Skye Harrison own a coffee roasting business and a cafe in Victoria. Source: Facebook / Invest Frankston

"Some cafes might even put their costings down to the minute details of okay, it's going to take my employee two minutes to put this together and then blend it, it just depends on how people do their costings," Harrison said.

So the extra ingredients and sometimes labour taken to make an iced coffee may contribute to its higher cost

But what about in the case of an iced latte?

Coffee, milk and ice

Harrison and her partner Joshua Swiers co-own Coffee for the People Roasting Co and a cafe of the same name in Seaford in Melbourne's south-east.

Their cafe charges the same amount for a small iced latte as they do for a small latte.

There is no price difference between the two two because as Harrison said "our iced latte is just literally a cold version of our normal latte."

Coffee for the People Roasting Co. cafe charges the same for a latte whether it is hot or cold but not all Australian cafes do. Source: Supplied

Their cafe's small iced lattes are served in the same cup as their hot lattes because while the ice may take up extra space, the milk being cold, rather than frothed, takes up less volume.

"If you think about when you're making a hot coffee, you're stretching the milk, so when you're making the cold iced latte, you're putting the ice in there," Harrison said. "And so you're probably adding the same amount of milk for both types of coffee."

Paying the price for ice or something else?

While Swiers said he had heard that some cafes do "bulk up" their iced lattes with extra ice, "it's just a displacement".

Many cafes served iced drinks in containers that are larger than the usual coffee cup sizes, so they could be adding more ice but Harrison said good cafes would ensure a palatable ratio of ice to milk to coffee.

"If they're using a bigger cup, in order to keep the ratio of the coffee, they might be putting a triple shot or four shots in there instead of a double shot," she said.

Without adding extra coffee and milk, the coffee taste would be diluted.

"If I was to put in an iced latte in a 16-ounce (larger) cup I would be putting extra shots of coffee in there and then charging for that."

Harrison said customers should feel comfortable asking cafe staff about what was in a drink if the menu did not clearly state the details.

"We encourage it, it helps us make people happier, more easily."

The aesthetics of an iced latte

So if you are not getting an iced coffee with the extras, the cafe has not bulked up your drink with an excess of ice and you are not buying a product that has extra shots in it, is there still a possibility you are being charged more? Yes.

Charles Skadiang from Melbourne Coffee Academy, which provides barista training, said cafes often made a slightly higher margin on iced drinks than their cold counterparts.

Warmer weather often means Australian cafes will be making more iced drinks and fewer hot ones. Source: Getty / dontree_m

"Some places will put it into a clear, flat lid, kind of takeaway cup that looks a bit nicer and then because of the visual appeal of it, even though it's almost no difference in cost, they will charge like $1 extra," he said.

The value of coffee in Australia

But Skadiang said coffee drinkers in Australia had been getting a good deal as he believed coffee had been underpriced in Australia for a long time.

"Coffee is such a labour-intensive product, take a latte, the skill involved to make it," he said.

"We're charging say $5 a cup, and people complain if it goes higher but you can pour a beer ... and you can charge $10 and no one blinks, you can go to a petrol station, and pay $3.20 for a bottle of water, when it's cost like a few cents," Skadiang said.

"We're just so used to paying little for a really, really good product."

Skadiang says coffee is undervalued because Australia's coffee market is so competitive.