THE FRAPPUCCINO INDEX
A gauge of the relative cost of living and disposable income of key global cities
Introducing the Momentum Works Frappuccino index
A fresh lens on global purchasing power (and affluence)
Starbucks is one of the most famous (and beloved) coffee brands globally. Ubiquitous across the globe, Starbucks has become synonymous with not just coffee, but also a lifestyle and a sense of community. One drink stands out as particularly symbolic of the Starbucks experience: the Frappuccino. With its wide range of flavours and customisable options, the Frappuccino is a beloved staple of many Starbucks fans (despite its higher price tag).
As Starbucks expands its global reach, the pricing of a Frappuccino varies, reflecting the brand's adaptation to local consumer profile of different markets. Hence, we bring you the Frappuccino Index - a practical measure that taps into the ubiquitous presence of Starbucks to offer insights into the relative cost of living and disposable income across the globe.
Using the price of a Frappuccino in New York City (NYC) as a benchmark, the Frappuccino Index provides a unique, lighthearted perspective for assessing economic status, affordability, and the premium placed on global brands in various locales.
Momentum Works Frappuccino Index 2023 of key global cities
*The Frappuccino Index was created using the 2023 price of a cup of Caramel Frappuccino in size Grande of various key cities globally, benchmarked against that of New York, USA. Source: Momentum Works Insights
How to interpret the index
Consumer Economic Status (affluence)
The proximity to the base reflects the similarity in consumers' purchasing power to that of NYC.
The closer to the base, the less premium Starbucks is seen in the city, offering insights into local consumer culture and the brand's integration into consumers’ daily lives.
The nearer to the base, the broader the consumer base for Starbucks products, implying successful market penetration and competitive pricing with NYC.
For better understanding, let's compare Vietnam and Singapore:
The Frappuccino index value for Hanoi & Ho Chi Minh (233), the two largest cities in Vietnam, is much higher than that for Singapore (149). This can be interpreted as follows:
Within these two cities in Vietnam, consumers generally have lower consumption power compared to Singapore, who share more similarities with New York City consumers. As such, Starbucks is seen as a highly premium brand in Vietnam that is only accessible to a small pool of consumers. Additionally, Vietnamese have a stronger preference for affordable local traditional coffee than Singapore consumers, making it more difficult for Starbucks to be well-integrated into the consumers' daily lives and achieve successful market penetration in Vietnam than in Singapore.
While the Frappuccino index is not a definitive measure of affluence or economic status, it nonetheless offers a digestible interpretation of the complex economic conditions and consumer behaviour.