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  1. #1
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    Marin California
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    Profit margin on drip coffee versus expresso drinks

    Can anyone tell me, what''s the profit margin or cost of goods sold on a cup of premium drip coffee versus most common espresso drinks?

    Assume very premium artisan roast purchased from a local roaster in California for a single small coffee, tea and pastries operation.

    Thanks!

  2. #2
    Member
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    Dec 2005
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    Lenexa, Kansas
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    Re: Profit margin on drip coffee versus expresso drinks

    Quote Originally Posted by MVcoffee
    Can anyone tell me, what''s the profit margin or cost of goods sold on a cup of premium drip coffee versus most common espresso drinks?

    Assume very premium artisan roast purchased from a local roaster in California for a single small coffee, tea and pastries operation.

    Thanks!
    Ok - use 12oz cup as the basis

    Latte:
    - 2 shots espresso (using 9gr/shot and $7/lb) = $0.18 (1 penny per gram)
    - 8oz milk (using $4/gal) = $0.24 (3 pennies per ounce of milk)
    - 12oz cup = $0.07
    - lid = $0.04
    - sleeve = $0.02
    ===============
    12oz latte COGS = $0.55
    12oz latte sale price = $2.85
    Revenue = $2.30 (80% profit)

    Drip Coffee (using 5.25oz coffee to brew 3L airpot gets you 8 12oz cups):
    - $0.29 coffee for 12oz cup
    - 12oz = $0.07
    - lid = $0.04
    - sleeve = $0.02
    ===============
    12oz coffee COGS = $0.42
    12oz coffee sale price = $1.45
    Revenue - $1.03 (71% profit)


    How's that?
    --
    Jeremy Meiss
    Origins Coffee Co., LLC

  3. #3
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    --
    Jeremy Meiss
    Origins Coffee Co., LLC

  4. #4
    Super Moderator
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    Feb 2008
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    Near Philadelphia, PA
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    4,750
    Hi Jmeiss,

    I was very impressed by the way you broke down the comparisons showing the difference between the cost of a specialty coffee vs. drip.
    You certainly answered MVCoffee's question in detail!

    The web site that you recommended, is a great resource. I bookmarked it in case I ever need to find it again.

    I'm glad you answered MVCoffee's question, because in the process you answered a couple of my questions too.

    Rose

  5. #5
    Senior Member
    Join Date
    Oct 2007
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    338
    Yes, it's a cool coffee profit calculator. Since I saw this thread, I've been searching for a site that offers a calculator for pastries. I found a few, but nothing like the one Jmeiss posted. Nice job!

  6. #6
    Member
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    Dec 2005
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    Lenexa, Kansas
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    65
    NP PinkRose - glad to be of service. I go through that exercise every few months. Helps me keep track of my "contribution margin"....

    You should do the same analysis for every single item you sell - helps you know where your big margin items are, know your big expenses, etc.
    --
    Jeremy Meiss
    Origins Coffee Co., LLC

  7. #7
    Senior Member
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    Jul 2004
    Location
    Hartford and New Haven, CT
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    991

    Re: Profit margin on drip coffee versus expresso drinks

    Quote Originally Posted by jmeiss
    Ok - use 12oz cup as the basis

    Latte:
    - 2 shots espresso (using 9gr/shot and $7/lb) = $0.18 (1 penny per gram)
    - 8oz milk (using $4/gal) = $0.24 (3 pennies per ounce of milk)
    - 12oz cup = $0.07
    - lid = $0.04
    - sleeve = $0.02
    ===============
    12oz latte COGS = $0.55
    12oz latte sale price = $2.85
    Revenue = $2.30 (80% profit)

    Drip Coffee (using 5.25oz coffee to brew 3L airpot gets you 8 12oz cups):
    - $0.29 coffee for 12oz cup
    - 12oz = $0.07
    - lid = $0.04
    - sleeve = $0.02
    ===============
    12oz coffee COGS = $0.42
    12oz coffee sale price = $1.45
    Revenue - $1.03 (71% profit)
    I come out with different number for espresso

    1 pound = 453 grams
    1 shot = 9 grams
    2 shot = 18 grams
    453 grams / 18 grams per serving = 25 servings
    $7 / 25 serving = $.28/serving
    factoring waste, double shots is about $0.31
    You want cream and sugar?
    NO COFFEE FOR YOU! NEXT!

  8. #8
    Senior Member
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    Aug 2004
    Location
    Des Moines, Iowa
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    1,552
    I guess I'm old fashioned. I use 7/14 grams.
    Have you ever walked through the aisle of your local grocer and smelled the death of a dying bean?

  9. #9
    Member
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    Dec 2005
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    Lenexa, Kansas
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    Yeah - I think 7/14gr is better - though for some reason some roasters are pushing people towards 10/20gr "to take advantage of our great espresso".... which is flawed reasoning - but I used 9gr in my example because of that...
    --
    Jeremy Meiss
    Origins Coffee Co., LLC

  10. #10
    Senior Member
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    Jul 2004
    Location
    Hartford and New Haven, CT
    Posts
    991
    I think dosing size is a matter of personal preference and machine being used. I a Cimbali in one shop which works great with 14 gram double. My Marzocco at the other location on the other hand works better with 17 grams. Also, I found smaller dosage favors lower temperature and bigger dosage prefers higher temperature.
    You want cream and sugar?
    NO COFFEE FOR YOU! NEXT!

 

 
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