What a cup of coffee costs to make

A cup of coffee costs the sum of: the grams of coffee you use times the price per gram, the milk if there is any, the cup with lid and sleeve if it is takeaway, waste (dialling-in shots, milk poured away, filter coffee dumped), a share of the machine and your time. With real measurements from one small café, the example below comes to $0.98 for a double espresso in a cup, $1.95 for a 12 oz takeaway latte and $1.12 for a 12 oz batch-brew filter. Your numbers will differ; the method is the same.

What goes into a cup

Split the cost into parts, because each one is measured differently:

1. Coffee: grams per drink × price per gram.
2. Milk: millilitres per drink × price per millilitre, for milk drinks only.
3. Disposables: cup, lid, sleeve, stirrer, sugar, napkin.
4. Waste: coffee used to dial in the grinder, milk left in the jug, brewed coffee poured away.
5. Machine: power, servicing and a share of what it cost.
6. Your time: minutes per drink × what your hour is worth.

It is the same calculation as the cost per unit of a recipe: total cost divided by what actually comes out. Here the recipe is a single cup.

How many grams of coffee you use

Do not use a textbook dose. Put a scale next to the grinder and weigh every dose for a week. If your double espresso recipe is 18 g but the grinder sometimes throws 19 or 20, your real cost is the average.

To go from bag to gram: bag price ÷ grams in the bag. A 1 kg bag at $24 is $0.024 a gram. A 250 g bag at $8 is $0.032 a gram. To compare pack sizes quickly, the unit price calculator tells you which works out cheaper per kilo or per litre.

Milk: the biggest ingredient in a latte

For milk drinks, measure how much milk goes into the cup with your jug and your sizes. And measure what gets poured away: steamed milk left in the jug after each drink or each round. If you pour away 0.6 litres at the end of the day and made 30 milk drinks, that is 20 ml of waste per drink.

Cup, lid and sleeve

For takeaway, each drink adds a cup, a lid and sometimes a sleeve, plus stirrer, sugar and napkin. In a mug there is no disposable but there is washing, so add a few cents. The guide on cups, lids, straws and ice shows how to cost each one by size.

The machine and the grinder

An espresso machine has three costs to spread across your cups:

• Power: it is on all day, whether you sell or not.
• Servicing: cleaning, gaskets, the technician.
• What it cost: spread over the months you expect to use it. The guide on equipment depreciation explains how.

Add them up per month and divide by the drinks you make in a month. A batch brewer costs far less per cup.

Worked example: espresso, latte and filter

A small café. You sell 80 coffee drinks a day, 25 days a month, so 2,000 a month. Your measured figures:

• Coffee beans: 1 kg bag at $24, so $0.024 a gram.
• Whole milk: $1.30 a litre.
• Dialling in: each morning you pour away 3 shots of 18 g, 54 g a day. Across 80 drinks that is 0.675 g per drink × 0.024 = $0.02.
• Milk poured away: 0.6 litres a day across 30 milk drinks, 20 ml per drink. 0.02 × 1.30 = $0.03.
• Machine: it cost $9,000 and you expect 5 years (60 months) from it: $150 a month. Plus $100 of power and $70 of servicing: $320 a month. Across 2,000 drinks: $0.16 per drink. For batch-brew filter: $0.03.
• Batch brew: you pour away brewed coffee that has sat too long. You measured 1 cup in every 6 brewed going down the sink, so each cup sold carries a sixth more coffee.
• Your time: $18 an hour, $0.30 a minute. Espresso 1 minute, latte 2.5 minutes, batch-brew filter 1 minute.

Why 0.48 ÷ 5 for the filter: of every 6 cups brewed you sell 5, so the coffee for 6 cups (6 × 0.48 = $2.88) is paid by 5. That is 2.88 ÷ 5 = $0.58 per cup sold, or $0.48 plus $0.10 of waste.

Check the sums:

• Espresso: 0.43 + 0.02 + 0.03 + 0.04 + 0.16 + 0.30 = $0.98
• Latte: 0.43 + 0.02 + 0.31 + 0.03 + 0.21 + 0.04 + 0.16 + 0.75 = $1.95
• Filter: 0.48 + 0.10 + 0.17 + 0.04 + 0.03 + 0.30 = $1.12

What the example tells you

In the latte, coffee is not the biggest cost. Milk, milk waste and the cup add up to 0.31 + 0.03 + 0.21 = $0.55, more than the $0.43 of coffee. And your 2.5 minutes are $0.75, the single largest line: 0.75 ÷ 1.95 = 38% of the cost. Price a latte thinking only of the coffee and you come up well short.

Batch-brew filter is cheap in time and leaks coffee. One minute per cup keeps labour low, but the coffee poured away adds about a fifth to the coffee cost. Brewing smaller batches more often, at the times you actually sell filter, attacks that line directly.

Daily waste looks small. The 54 g of dialling-in coffee is 54 × 0.024 = $1.30 a day, about $32 over 25 days. The 0.6 litres of milk is 0.6 × 1.30 = $0.78 a day, about $20 a month. Measuring it shows you whether it is worth changing jug size or dialling in with fewer shots. The guide on the cost of food waste helps you track it month by month.

The price comes from the cost. At a 60% margin on the price before tax: espresso 0.98 ÷ 0.40 = $2.45; latte 1.95 ÷ 0.40 = $4.88; filter 1.12 ÷ 0.40 = $2.80. Add sales tax on top if your local rules require it. The guide on how to price drinks explains how to choose each drink's margin and check it against what customers near you pay.

How many cups you need to sell

The cost per cup tells you what you make on each drink. It does not tell you whether the café works. For that, you put that number together with rent, wages and everything else fixed in a month. The guide on café break-even does that sum: how many cups a day you need to not lose money.

Do it with the calculator

Put the coffee and milk for each drink into the food cost calculator, with the cup as packaging, your time and the waste you measured, and it gives you the cost per drink and the price for the margin you want.