How to work out the cost of a cup of coffee
Most café owners can tell you what a kilo of beans costs. Far fewer know what a flat white costs, because the beans are only half to two-thirds of it. The real cost per cup is the sum of six things:
- Beans: price per kilo ÷ 1,000 × grams per drink. At $38 a kilo and a 20g double shot, that's $0.76.
- Milk: millilitres in the drink × price per litre. 170ml at $1.70 a litre is $0.29.
- Milk waste: what gets oversteamed, left in the pitcher or tipped out. 10% is common.
- Alternative milk: the extra cost of oat, soy or almond over dairy, averaged across the share of customers who choose it.
- Takeaway packaging: cup, lid and sleeve, averaged across your dine-in and takeaway mix.
- Extras: chocolate, syrups and sugar.
A worked example
The calculator opens with a flat white: $38 beans at a 20g dose, 170ml of dairy milk at $1.70 a litre with 10% waste, 20% of customers on oat milk at $3.20 a litre with a $0.80 surcharge, and 55% takeaway at $0.24 for the cup, lid and sleeve. That flat white costs $1.27 to make, and the beans are 60% of it. At $5.50, plus the average oat surcharge, the cost is 22.4% of the price and each cup leaves $4.39. At 200 coffees a day, six days a week, milk waste costs about $2,100 a year and takeaway cups and lids about $8,200. To get to a 20% cost the flat white needs to be $6.20.
What your coffee cost percentage should be
| Measure | Typical range |
|---|---|
| Long black or espresso, per cup | 12–18% |
| Milk coffee, per cup, all costs counted | 15–25% |
| All coffee and beverage sales | 22–30% |
| Warning sign, beverage overall | Above 32% |
The per-cup figure is lower than the beverage total because the total also carries cold drinks, juices, wastage and staff coffees. If your per-cup cost looks fine but your beverage cost percentage on the P&L is high, the gap is usually milk waste, unrecorded staff and comp drinks, or remakes. Our guide to coffee cost percentage goes through each one.
Where coffee margin quietly disappears
Milk waste
Milk is usually the biggest cost after beans, and it's the one that leaks. A barista who steams a full jug for every drink and tips the rest can waste 50ml a coffee. Standard jug sizes for each drink and a quick weekly check of litres bought against coffees sold usually halve the waste within a month.
Takeaway cups
At $0.20–$0.30 a set, cups and lids look trivial. On 200 coffees a day with half going out the door, they cost $6,000–$9,000 a year. Some cafés now add a small cup charge or a discount for reusable cups; either way, count them.
Alternative milks without a surcharge
Oat milk costs roughly twice what dairy does. If a fifth of your customers choose it and you don't charge for it, every one of those coffees earns less. The calculator shows how much of the extra cost your current surcharge covers.
Bean prices that moved while your price didn't
Every $5 a kilo adds about $0.10 to a 20g coffee. Specialty beans have risen sharply in the last two years, and many cafés haven't moved their coffee price since. The bean price table in the calculator shows exactly what each step costs you.
Pricing your coffee
Divide your cost per cup by your target cost percentage to get the minimum price. At $1.20 a cup and a 20% target, that's $6.00. If the market won't take that, the levers are the dose, the milk waste and the cup cost, in that order. Small, regular rises of $0.20–$0.50 rarely lose customers. Each $0.10 on 200 coffees a day is worth about $6,000 a year.
For food and cabinet items, the café menu price calculator works the same way. Our guide to pricing a café menu covers the strategy around it.
Frequently asked questions
How much does a cup of coffee cost to make?
Most cafés spend $1.00–$1.50 to make a milk coffee once beans, milk, milk waste, a share of takeaway cups and lids, and alternative milks are counted. A long black is closer to $0.70–$0.90. The beans are usually only half to two-thirds of the cost.
What should my coffee cost percentage be?
A single milk coffee usually lands at 15–25% of its selling price. Across all coffee and beverage sales, 22–30% is the usual target. Above about 32% points to milk waste, underpriced drinks, or a bean price rise that hasn't been passed on.
How many coffees do you get from a kilo of beans?
At an 18–20g double-shot dose, a kilo gives about 50–55 coffees. Purging the grinder, dialling in each morning and remakes usually take that down to 45–50 in practice.
Should I charge extra for oat milk?
Yes, in most cafés. Oat and other plant milks cost two to three times as much as dairy per litre. A surcharge of $0.50–$1.00 usually covers the extra cost; without one, every alternative-milk coffee earns less than the dairy version.
How much does a bean price rise add to each coffee?
Every $5 per kilo adds about $0.10 to a coffee at a 20g dose. On 200 coffees a day over six days a week, that's around $6,000 a year.