The last time you worked it out
You worked out the cost of a flat white when you opened: a double shot, so many grams of beans, so much milk, a cup and lid if it is takeaway. That was a while ago. Since then, the roaster has put prices up twice, the dairy once, oat milk has changed, and takeaway cups and lids have gone up. Your prices have moved a little. You are not sure if they have moved enough.
You suspect some drinks are fine and others, like the large oat latte with a syrup, are barely worth making. But the numbers live in a spreadsheet from opening year, and nobody has updated it. Every time a supplier email mentions a price change, you mean to sit down with it, and every time the week gets in the way.
Why cost per cup gets lost
- Supplier price rises arrive on invoices, not as updates to your costings.
- Each drink has several sizes, milks and extras, which multiply the sums.
- Takeaway drinks carry a cup, lid, sleeve and sometimes a carrier that eat-in drinks do not.
- Waste from dialling in, spilled milk and remakes is real but rarely counted.
- Pricing decisions are made by feel, or by matching the cafe down the road.
What not knowing costs
Drinks that have become barely profitable keep being sold at the same price, and they are often the popular ones. Price rises are either too timid to cover costs or too broad, putting up prices on drinks that did not need it. And you cannot see the effect of simple choices, such as switching cup supplier or charging a little more for alternative milk.
How we build cost per drink
- We set up each drink's recipe by size: dose, milk quantity by type, syrup, and packaging for takeaway.
- Ingredient and packaging prices are read from supplier invoices in Xero or QuickBooks, or entered from price lists, and the latest price is used.
- Every drink, size and common combination gets a current cost, eat-in and takeaway.
- You can add an allowance for waste, based on what you log or a figure you choose.
- Cost is shown against your current till price, so you can see the margin on each drink and which ones have slipped.
- When a supplier price changes, you see which drinks moved and by how much, and can test a new price before you change the till.
| Drink component | Where the cost comes from |
|---|---|
| Espresso | Roaster invoice, grams per dose |
| Milk | Dairy and alternative milk invoices, millilitres per size |
| Syrups and extras | Supplier invoice, pumps per drink |
| Takeaway packaging | Cup, lid and sleeve invoices |
What you charge is your decision. We show what each drink costs to make; the price is up to you and your market.
Pricing with numbers
When the roaster's new price list arrives, you update it once and see every espresso drink's cost change. You notice the large oat latte has slipped further than the rest, and decide to change the alternative milk charge rather than every price on the board. You can also see that takeaway drinks cost more to make than eat-in, and decide whether that should be reflected on the till.
Could this be your menu board?
- You last worked out drink costs when you opened.
- Supplier price rises are not reflected in any costing.
- You are not sure which drinks make the least money.
- Takeaway packaging is not included in your costs.
- Price changes are decided by feel.