Revolution in a cup: Cofix 5-shekel menu aims to shake up coffee market

Coffee, soda, sandwiches will all be available for the same fixed price of 5 shekel.

cofix sign 370 (photo credit: NIV ELIS)
cofix sign 370
(photo credit: NIV ELIS)
There’s new competition in town for the coffee shops that famously pervade the streets of Tel Aviv.
Cofix, a new take-away discount coffee chain that opened its doors Monday, is looking to shake up the Israeli coffee scene by offering an across-the-board price of NIS 5 for everything on its menu.
Coffee? NIS 5. Put it on ice and substitute soy milk? Still NIS 5. A pastry, a half sandwich or a small salad? You get the idea. Even tall cans of Coca- Cola, which retail for NIS 7-10 in kiosks and supermarkets, fit the bill.
“This is a revolution,” said Cofix CEO Avi Katz, whose previous venture Hakol Bedolar (everything for a dollar) lends some insight to his approach to business.
Katz says that paying NIS 18 for a large coffee and another 22 for a piece of cake is absurd.
“Every product, all the raw materials, are cheaper now than they used to be. Coca-cola used to be 40 agorot more,” he said.
“Yet everything we buy in the food sector is more expensive.”
According to the USDA Economic Research Service, Israeli consumers spent 15.9 percent of their expenditures on food in 2012, more than many other OECD countries (the United States spent the least of anyone, with just 6.6% doled out on grub).
In Israel, only housing (25%) and transportation and communications (20.1%) ate a bigger chunk of people’s monthly expenditure, according to the Central Bureau of Statistic’s 2011 survey. That same year, the high cost of living was the main driver of massive social protests in the streets.
Cofix certainly appeals to Israelis’ bargain-hunting instincts. One passerby photographed the shop’s 5-shekel menu to prove to his wife it was real. Another wondered out loud how such a business could be profitable.
“The world is divided into two kinds of people,” Katz said, “those who sell a lot cheaply, and those that sell a little bit at high prices. I’ve always been from the first group.”
By his calculation, once rent, wages, taxes and the costs of the products are accounted for, each branch can stay afloat by selling about 1,000 products a day. Double that, he says, and he can pull in NIS 900,000 a year in profit.
While only the Ibn Gvirol pilot store has opened for business, branches on King George Street and Haarba Street are scheduled to open in the coming weeks. After that, Bank Hapoalim is on board to help fund 100 franchises in the months ahead.
Of course, the regular coffee shops hold one main advantage; they offer people a place to sit, work, relax and converse.
Cofix caters to the “to-go” crowd, who want to grab a snack and a drink and take it back to the office, their homes, or a public space.
Cofix is also not the only new entrant into the coffee market.
CUPS, a smart-phone app that offers users monthly subscriptions for unlimited coffee at a chain of participating cafes, also made waves since it launched last September. CUPS also offers an alternative program of buying a prepaid coffee card, but each cup costs NIS 7, still more than Cofix.
One way or another, Katz is convinced that the success of his chain will force established coffee shops to bring down their prices.
Neither Cafe Landwer nor Aroma returned inquiries from The Jerusalem Post on the issue.