How to price drinks: coffee, juice and batch drinks

To price a drink, first work out what each cup costs you: what goes in it (coffee, milk, fruit, sugar), the cup with its lid and straw, the ice, its share of waste and your time. With that cost per cup, the price comes from dividing by (1 − the margin you want). Then you check whether that price works on your street. The classic mistake with drinks is counting only the coffee or the fruit: the cup, the ice and what gets poured away at the end of the day usually weigh more than they look.

In this guide:

• What a cup of coffee costs to make: espresso, latte and filter.
• Fresh juice: fruit yield and cost per glass.
• Batch drinks: cost per litre and per cup.
• Smoothies and açaí bowls: costing portions and toppings.
• Cups, lids, straws and ice: the drink costs people forget.
• Pour cost for cocktails and spirits.
• Bottled drinks you make yourself.
• Reselling sodas and water: what margin makes sense.
• Café break-even: how many cups a day.

Why drinks are deceptive

A latte is a few grams of coffee and some milk. A cup of lemonade is lemons, sugar and water. Looking only at that, almost any price seems to leave plenty of profit. That is why so many cafés and stalls price drinks by eye, copying the place next door.

The trouble is everything around the liquid:

• The takeaway cup with lid and straw can cost almost as much as what is in it.
• Ice has to be bought or made, stored, and it melts.
• Bar waste: dialling-in shots, steamed milk left in the jug, juice squeezed that nobody ordered, lemonade left in the dispenser at closing.
• Your time: a fresh orange juice takes minutes; pouring a lemonade takes seconds.

Every drink has a different mix of those costs. That is why one margin or one price for the whole menu rarely works.

Step 1: the recipe per cup, measured

Write down each drink's recipe per cup with what you actually use. Not what the bag says or what another café does: what you weigh at your own bar.

• Coffee: grams of ground coffee per drink. Weigh it for a week and take the average.
• Milk: millilitres per drink, given your jug and your cup.
• Fruit: kilos of fruit per glass. For squeezed juice, measure how many millilitres of juice you get per kilo. For blended juice, how many grams of clean fruit go into each glass.
• Batch drinks: batch cost divided by the litres you actually sell.

With the price from your receipt and the quantity of each ingredient, you get the cost per cup. If you buy coffee by the kilo and use grams, or milk by the litre and use millilitres, convert everything to the same unit before multiplying.

Step 2: the cup and everything around it

Add up every disposable per drink: cup, lid, straw, sleeve, stirrer, sugar sachet, napkin. Plus ice if it has any. The guide on cups, lids, straws and ice shows how to cost each one by size, and the guide on costing packaging and labels helps if you also sell in bottles or pouches.

If you serve in a mug or glass in-house there is no disposable, but there is washing: water, detergent and time. Put a small amount per drink rather than zero.

Step 3: bar waste

Waste on drinks is small per cup and large per month. Measure yours for a week:

• Coffee: how many shots you pour away dialling in the grinder each morning. Spread that coffee across the drinks you sell that day.
• Milk: how much steamed milk is left over and poured away. Spread it across the milk drinks.
• Fruit: how much spoils before you use it. If you lose 1 kg in every 20, add 5% to the fruit cost.
• Batches: how many litres of lemonade or iced tea you pour away at closing. Those litres are not sold, so the batch cost is split across fewer litres.

Step 4: your time and the machine

Time how long each drink takes, from order to hand-over. Multiply the minutes by what your hour is worth. For batch drinks, divide the time spent making the batch by the cups it gives you.

If you have an espresso machine, add a share of its power and servicing per drink. The guide on the cost of a cup of coffee goes through it.

Step 5: the price

With the cost per cup, the price for a given margin is:

price = cost per cup ÷ (1 − margin)

A 60% margin on a cost of $2.00 gives 2.00 ÷ 0.40 = $5.00. If you think in markup, or want to check the conversion, the markup and margin calculator does the sum both ways.

Many people use food cost percentage (ingredient cost ÷ price) to check their drinks. It is useful for comparing one drink with another on your menu, but there is no universally correct percentage. What matters is that your margins, added together, pay the rent and the wages and leave you something.

That margin is on the price before sales tax. If your prices include tax, add it at the end. Rules differ by country, so check your local tax rules or ask an accountant.

Worked example: three drinks at a coffee cart

You run a coffee and juice cart. These are your own measurements; yours will be different.

Latte, 12 oz takeaway

• Espresso: you use 18 g per drink. A 1 kg bag costs $24, so $0.024 a gram. 18 × 0.024 = $0.43
• Milk: 250 ml from a 4-litre jug that costs $5.20, so $1.30 a litre. 0.25 × 1.30 = $0.33
• Cup, lid and sleeve: $0.12 + $0.05 + $0.04 = $0.21
• Waste: dialling-in shots, 5% of the coffee ($0.02), plus steamed milk poured away, about 10% of the milk ($0.03): $0.05
• Your time and the machine: 2.5 minutes at $18 an hour is $0.75, plus $0.10 for power and servicing: $0.85
• Cost per cup: 0.43 + 0.33 + 0.21 + 0.05 + 0.85 = $1.87

Fresh orange juice, 12 oz takeaway

• Oranges: you squeezed 5 kg and got 2.1 litres, so 420 ml per kilo. For 330 ml of juice you need 330 ÷ 420 = 0.786 kg. At $2.40 a kilo: 0.786 × 2.40 = $1.89
• Cup, lid and straw: $0.22
• Fruit that spoils: 5% of the oranges, 1.89 × 0.05 = $0.09
• Your time: 3 minutes at $18 an hour, $0.90
• Cost per cup: 1.89 + 0.22 + 0.09 + 0.90 = $3.10

Lemonade, 16 oz with ice

• Batch: lemons 4 kg at $4.00 ($16.00), sugar 2 kg at $1.50 ($3.00), mint 2 bunches at $1.50 ($3.00). Total: $22.00
• The batch makes 10 litres after straining, but at closing you pour away what is left and sell 8.4 litres. At 350 ml a cup, that is 8.4 ÷ 0.35 = 24 cups. Lemonade per cup: 22.00 ÷ 24 = $0.92
• Ice: $0.06
• Cup, lid and straw: $0.24
• Your time: 40 minutes making the batch at $18 an hour is $12, across 24 cups: $0.50
• Cost per cup: 0.92 + 0.06 + 0.24 + 0.50 = $1.72

Now the price. You choose a 60% margin for the latte and the lemonade, and 50% for the juice, because the fruit is a big share and at 60% the juice would land at a price your customers will not pay.

Real margin is (menu price − cost) ÷ menu price. For the latte: (4.75 − 1.87) ÷ 4.75 = 60.6%. Rounding up to a menu price helps you; rounding down costs you, so do it knowing by how much.

Look at what is not liquid. In the lemonade, cup and ice are 0.30 ÷ 1.72 = 17% of the cost. In the latte, the labour and machine line is 0.85 ÷ 1.87 = 45%. Leave those out and you price from a cost that is a fraction of the real one.

And look at the profit in dollars. The latte leaves you 4.75 − 1.87 = $2.88 per cup; the juice 6.25 − 3.10 = $3.15; the lemonade 4.50 − 1.72 = $2.78. The juice has the lowest margin as a percentage but the most dollars per sale. Both numbers matter.

Sizes: the large is not twice the cost

When you offer two sizes, the large has more in it, but your time and much of the packaging barely change.

Following the example, a 16 oz latte with the same double shot:

• Espresso: $0.43, the same
• Milk: 350 ml, 0.35 × 1.30 = $0.46
• Cup, lid and sleeve for 16 oz: $0.16 + $0.05 + $0.04 = $0.25
• Waste: $0.07
• Your time and the machine: $0.85, the same
• Cost: 0.43 + 0.46 + 0.25 + 0.07 + 0.85 = $2.06

It costs $0.19 more than the 12 oz. At $5.25 it leaves you 5.25 − 2.06 = $3.19 a cup, against $2.88 for the 12 oz. That is why the price step between sizes should come from the sums, not from a fixed rule.

Drinks you resell, bottle or pour at a bar

Not every drink is made to order:

• Sodas and water you resell: the cost is the buying price plus the fridge's power and whatever breaks or goes out of date. The guide on margins on resold drinks shows how to price them next to your food.
• Drinks you bottle yourself: cold brew, lemonade or iced tea in bottles add the bottle, cap, label, filling loss and unsold returns. That is in the guide on bottled drinks you make.
• Cocktails and spirits: costed per measure poured, with spillage and over-pouring. See pour cost.
• Smoothies and bowls: the cost moves a lot with toppings. See the guide on smoothies and bowls.

Delivery and takeaway

A drink sold through a delivery app needs more packaging than at the counter: a sealed lid, a cup carrier, a bag. And the app takes a commission on the price. Say the app charges 30%: from a juice listed at $6.25 you receive $4.38 before paying for the extra packaging. The delivery app price calculator gives you the app price that keeps your margin after commission.

How many cups you need to sell

The price per cup tells you what you make per drink. To know whether your cart or café holds up, divide your monthly fixed costs (rent, wages, power, the machine lease) by the average profit per drink. That tells you how many drinks a day you need to sell to not lose money. The guide on café break-even works through it step by step.

Do it with the calculator

Put each drink's recipe or batch into the food cost calculator, with the cup and ice as packaging, your time and the waste, and it gives you the cost per cup and the price for the margin you want.