Miami, Dubai, Sydney, Shanghai, Santiago de Chile, Buenos Aires ... it does not matter where you are in the world. In virtually every major city around the planet it is very likely that there is a local Starbucks.
With 24,000 stores scattered in nearly 70 countries, this company born in Seattle, United States, back in 1971, now became the world's largest chain of coffee shops.
That is why this hyper globalized company, like other firms such as McDonald's, is usually considered a sort of "thermometer" to evaluate some economic variables at the international level.
It happens that, as well as since the mid-'80 The Economist began to relieve the values of the most popular burger of the company of the golden arches around the world and then dump them every six months in his "Big Mac Index", The Wall Street Journal then he did the same with the so-called "LatteIndex".
This glass, printed with the figure of the mermaid, contains a coffee with milk that is served almost the same in all stores of the chain. And, being so standardized worldwide, has become a reference for many economists when it comes to establishing how appreciated or depreciated is the monetary sign in each nation.
In addition, it allows for an approximate reference on how competitive an exchange rate turns out to be an economy.
With the exception of coffee beans - which are produced in specific regions and then imported into each of the countries - and some plastic materials, a large part of the costs that make up the final price of the classic latte glass are strongly influenced by the local conjuncture.
In this same line, it is not strange to see, for example, that the times when the price of this coffee with milk was more expensive in a store in Buenos Aires than in a store in Santiago de Chile -always in terms of the dollar-, this It coincided with the times when tens of thousands of Argentines took advantage of holidays or long weekends to cross the mountain range and do "tourism shopping".
The ranking of the "Starbucks Index"
When analyzing the ranking of the most expensive countries -measured in US currencies- one can observe quickly that now Argentina not only stopped being in the main positions but it is located well at the bottom of the table, among the cheapest nations .
Indeed, when drawing up this survey it can be seen that Switzerland leads the list. There is paying the most expensive glass of latte globally, with a price that is equivalent to about $ 5.90.
France - taking as a reference the current value in Paris - and Hong Kong follow in this list, with levels that exceed $ 4.60 for this classic café con leche.
And what about the United States, a country that is set as a reference? In a city like New York it averages $ 3.80, although in some places with a lower GDP per capita, its price may be slightly lower.
However, among the Latin American countries it can be seen that Uruguay and Chile lead the "Starbucks Index", while Argentina is very comfortably in the last position, below Mexico and Brazil.
In Buenos Aires, the glass of lattetall (the smallest format) costs about $ 112, a figure that, at the official exchange rate, represents about $ 2.51.
Strangely, in the last year, this size stopped being included in the billboards of prices that are exhibited in each one of the Buenos Aires stores - only the "large" and "venti" measure is shown. But it is still possible to request it in the box.
Beyond this detail, the important thing is that the price that must be paid at a local coffee shop is US $ 1.30 below that which prevails in some cities in the United States, while involving US $ 1.45 less than in the case of Montevideo, according to the survey carried out by iProUP.
In this type of comparison, such as the one that The Economist makes with the global hamburger, the concept of "purchasing power parity" is applied, which compares the cost of the same good in different countries.
This theory establishes that, with the same amount of dollars, it should be possible to buy an identical good in all nations, be it a food or a standardized service.
Thus, if a product in a country has a value that is very far from the reference market -the US, for being quoted in dollars- then the local currency is considered undervalued against the dollar. Otherwise, if that same drink is more expensive than in the US, the domestic monetary sign would be overvalued.
For practical purposes, it is interesting to analyze what happened, for example, in the comparison with Chile.
Now, the price in a shop in the Trans-Andean capital is 50% higher than in a local Buenos Aires (US $ 3.80 vs. US $ 2.51).
However, the situation was very different in mid-2016, when still the planes were traveling loaded with passengers to the other side of the mountain range to take advantage of the low prices in services and goods, mainly technology and clothing.
At that time, in Buenos Aires the popular coffee was obtained at a price of $ 54, which, at the exchange rate of that time, yielded a figure close to US $ 3.90.
In return, in June 2016, the latte glass in Santiago was cheaper: it was equivalent to US $ 3.50.
What happened in these three years? The value of the dollar, tip by tip, varied very little in the neighboring nation: it went from 680 to 691 Chilean pesos, in a context in which the accumulated inflation there was barely 8%. In contrast, in Buenos Aires, the price of coffee increased by about 107%, but the jump that the greenback experienced was much higher: 215% ($ 44.5 vs. $ 14.11).
This ended up generating a collapse of the Argentine price of latte internationally, always taking the greenback as a reference.
But, of course, this movement of the currency generated other "collateral effects", such as the fact that today more wages are needed to travel and buy abroad.
To put it in context, according to data from the Department of Studies of the National Chamber of Commerce, Services and Tourism of Chile (CNC), purchases with debit and credit card of Argentines in the third quarter of 2016 still growing at a surprising rate : 119% year-on-year
On the other hand, between January and March of this year (latest data available), operations plunged by 71%.
Something similar happened with Uruguay: as a result of the jump of the greenback in Argentina, that neighboring country suffered a collapse of receptive tourism last summer, forcing the authorities to extend their plan of tax benefits for 2019, in order to attract visitors with DNI albiceleste.
Finally, there is the case of Brazil, which in the surveys of recent years has always positioned itself as one of the cheapest countries in the region when it comes to buying a coffee at a Starbucks store.
Since 2016, in fact, the price of latte in dollars varied very little, given that the accumulated inflation in that country -of 13 %- was compensated with a devaluation that, end-to-end, was 20%.
X-ray of a glass of coffee with milk
Beyond the particularities that can occur in each market, the reality is that a glass of the classic coffee with milk of this American chain is a good thermometer of the value, in dollars, of the prices of goods and services.
It happens that, contrary to what is usually believed, the imported content that contains a latte is minimal. And Argentina is not the exception.
In effect: coffee, which is the essential raw material and reason for existing of this company, barely represents 4% in the cost structure that ends up determining the final price that a consumer must pay in the box.
Milk - I believe it is produced locally - represents around 4%. The glasses, cardboard covers to avoid burning and other products-napkins, sweeteners, spoons, etc.-add another 7.5%.
Depending on where in the world the store is located, profitability can represent about 10% of the value of each coffee.
While taxes, labor - including taxes and social security - and the rent of the premises - adding commercial costs - can explain no less than three-quarters of the final value of the classic latte.
There is one last key point to understand why Argentina's position in the international ranking fell so much. Along with the sharp devaluation, there is one fact that can not be ignored: the domestic crisis, which caused a sharp drop in consumption and caused non-essential products to keep pace with inflation.
This can be seen in a no lesser detail: since mid-2016, the CPI experienced an increase of 113%. In return, the value of the latte at Starbucks increased 107% in the same period.
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