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A Wall Drug billboard advertising 5-cent coffee, as seen from the interstate.
A Wall Drug billboard advertising 5-cent coffee, as seen from the interstate.
Photo courtesy of Rick Hustead

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America's Cheapest Cup of Coffee

How did coffee go from 5 cents to 5 dollars?

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A latte may cost $5but America’s cheapest cup of coffee is a mere 5 cents. With the recent proliferation of third wave beans, more sophisticated coffee consumers are on a never-ending search for creative ways to score a caffeine fix, from $10 liquorish lattes to buttered brews, even if drinks comes at outrageous prices. Yet, one kitschy old place in Wall, South Dakota is garnering attention for the opposite reason. Their cup of joe only costs a nickel. And owners haven’t raised the price since the 1960s.

Wall Drug Store, also known as Wall Drug, is a Western-themed diner on the edge of the Badlands that sells the bargain brew using an honor system, with serve-yourself coffee urns and piggy bank-style boxes where customers drop their change. "It’s a great, regular-old cup of coffee,"  says third-generation owner Rick Hustead.

"The coffee was that price 50 years agoand it was a bargain then."

"The coffee was that price 50 years agoand it was a bargain then. Our customers get a kick out of it," he said, adding that it’s likely the country’s best deal on java. (Previously, America’s cheapest cup was believed to be at a pharmacy in Foley, Alabama for 10 cents.)

Hustead touts the deal on billboards along South Dakota's main thoroughfare I-90, luring truckers and weary travelers to brake for something warm and caffeinated. It works in a place so rural, the nearest Starbucks is a 55 mile trek.

Founded in 1931, the former pharmacy-turned-roadside attraction is a weird slice of Americana; there’s even a sculpture of a pistol in the dining room. Men wearing overallsdesigned for cornfields, not catwalksdown slices of cherry pie. Handwritten signs offer, "free ice water."

L: A vintage photo of Wall Drug. [Photo courtesy of Rick Hustead] R: A contemporary photo of Wall Drug. [Phoyo by Flickr/bk1bennett]

The black water here is no Blue Bottle pour-over, but it's hot, fresh and totally drinkable. Especially for its 5 cent tag. And while the price gimmick gets people in the door, the cafe loses money each year on its coffee, said Hustead, who buys bulk beans from restaurant supply company Farmers Brothers "by the truckload." Instead, he makes a profit selling grub that pairs well with coffee, like frosted donuts ($1.19) hotcakes ($5.29) and eggs with toast ($4.29).

If America is on its "third wave" of coffee, Wall's charm is that it’s stuck in a time capsule. And so is its coffee. The place is also a reminder of how far the beverage has come — from 5 cent cup to world class brew.

... the nearest Starbucks is a 55 mile trek.

"In the 50s, coffee was low cost and low quality. For awhile, consumption was declining," says Brett Smith, owner of Durham, North Carolina's Counter Culture Coffee, a pioneer of the direct trade movement.

"But the quality of coffee in America has improved so much. There are different varietals and flavor profiles. And a larger audience is discovering that," he continues. Before chains like Starbucks and Peet’s made coffee widely available, most American coffee was just plain swill.

The country’s first coffee shop, The King’s Arms, hit New York City in 1696. But owners were more interested in turning it into a town hall than a tasting room. At home, Americans started replacing fermented juice, or "must," with coffee at breakfast. (Hungry settlers may have been simply grateful it didn’t taste quite so much like dirty socks.)

Coffee stands soon began popping up across New York City, including Chock Full o'Nuts, which sold a sandwich and a cup of joe for a 5 cents in 1942. But nobodyperhaps outside of Americans who had been to Italy and knew betterexpected coffee to taste good.

Peet’s and Starbucks changed that in the 1970s. Founded in Berkeley, CA and Seattle, WA respectively, the companies opened dozens of "European-style" coffee houses across the country by the late 80s. Just 10 years later, the coffee-to-go phenomenon was born.

Wall Drugs' 5-cent coffee. [Photo by Natalie O'Neill]

"For many, a daily stop at Starbucks is as routine as a visit to a cash machine or gasoline station," The Seattle Times wrote in 1992, the year company started selling stock. "If you have some extra cash available and would like to buy stock in Starbucks, give it a try. But realize you're gambling," the writer advised.

Buying Starbucks stock turned out to be worth the bet. Two years later, customers nationwide were forking over $1.25 for a tall-sized coffee, which was widely considered a gourmet treat.

"Coffee Prices Hit 20-Year High," a USA Today headline read in 1997. By 1999, the number of Starbucks shops had increased to 2,498 — up from just 84 in 1990 according to the company.

But outside of the corporate coffee world, a movement was bubbling. Coffee nerds, some claiming the quality of chain brews had gone down, went looking for the next big thing.

"Peet’s and Starbucks let people know that good coffee was out there. Smaller specialty coffee roasters took that and continued to push it further," said Smith, who founded Counter Culture in 1995.

"Around 15 years ago, coffee companies started saying, ‘We want to know more about where the beans came from. We want to know about the farmers and their stories,’" he said, adding that "It was a natural progression and a natural curiosity."

If America is on its "third wave" of coffee, Wall's charm is that it’s stuck in a time capsule.

Other companies were simply forced, for the first time, to pay attention to who grew their beans. The so-called "coffee crisis" of 2001, caused by an imbalance between supply and demand, and put tremendous pressure on farmers in developing countries. That year coffee prices fell to a 30-year low and average Americans saw a minor fluctuation in the price of a daily cup. But the slightly better deal was a serious blow to the global sustainability of coffee beans, experts said. 

That prompted some forward-thinking companies, including Starbucks, Illy and Peet’s, to strike up direct-trade relationships and grower cooperatives to assure their coffee supply would be high-quality and consistent.

Inside Wall Drug Stone. [Photos by Natalie O'Neill]

A few years later, smaller specialty roasting companiessome with borderline obsessive attention to detailbegan to gain cult-like followings. They included Stumptown of Portland, OR, Blue Bottle of San Francisco, CA, intelligentsia Coffee of Chicago, IL and Counter Culture.

Blue Bottle founder James Freeman, for example, opened his first coffee kiosk in a friend’s garage in San Francisco in 2005. His single-origin beans, roasted not more than two days prior, were brewed individually on Bonmac Drippers.

It was worth the extra couple dollars, customers gushed.

The pour-over craze became hotter than a steam wand. Shops from San Diego to Chicago adopted the Japanese-inspired, flavor-enhancing preparation method.

For the first time, terms like "sustainable" and "ethically sourced," were tossed into coffee house conversations. Coffee lovers wanted beans from a specific regions, with certain flavor profiles. And some cared about how their coffee was effecting the planet. As customers’ standards got higher, so did pricesto more than $3 for pour-overs in 2008.

By 2012, the average American worker was spending $1,100 on coffee per year ...

"You get what you pay for," said Jeremy Tooker of San Francisco's Four Barrel Coffee, who has been called one of the kings of coffee's third wave.

"High quality stuff, sourced more responsively costs more money. Cheap coffee is grown in areas that are clear cut and machine picked," said Tooker, who charges $3 to $6 per cup. He continues, "Cheap coffee is actually not healthy for you. It can be messed up, damaged by mold or insects ... It will make you crash, but high-quality light roasted beans won’t."

By 2012, the average American worker was spending $1,100 on coffee per year—nearly as much as he or she spent on commuting, according to Consumerist.

The price of coffee beans doubled last year due to lack of rain in Brazil, but that didn't stop many Americans from spending $1.50  to $5 on their favorite morning beverage. Coffee drinkers can now expect to drop $1.95 on a tall coffee at Starbucks, for example, and $3 to $4, and sometimes even more for a pour-over at specialty shops. The trending stuff, including nitro coffeecold brew and fad-diet coffee, is even more expensive.

"The next wave of coffee is what it does for you, how it makes you feel," claims Bulletproof founder Dave Asprey, who encourages customers to mix coffee with grass-fed butter to lose weight.

But Wall Drug isn't paying attention to the fads.

Coffee trends may come and gobut owners haven’t been touched by any of it. The cafe hasn’t changed its simple drip brew since before the days of "Coffee with the Kennedys."

"We’ve been doing it this way for 50 years," Hustead said. "I don’t expect we’ll change things anytime soon."

Wall Drug

510 Main St, Wall, SD 57790, USA
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