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Profit analysis of Espresso Drinks

This is a discussion on Profit analysis of Espresso Drinks within the Coffee Shops, Espresso Bars & Cafes forums, part of the Coffee Addicts category; I'm looking to open up a gelateria/coffeeshop in the very near future. In order to keep my investors happy, I need to give them some ...

  1. #1
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    Profit analysis of Espresso Drinks

    I'm looking to open up a gelateria/coffeeshop in the very near future. In order to keep my investors happy, I need to give them some idea that they will not lose their money. In order to do that, I need to figure out how much it will cost to produce all of our products. I have an analysis of drip coffee, tea and the gelato already done, but I can't seem to find enough information on espresso drinks to do them. If anyone has any information on how much espresso is required to brew one shot, I can get the ball rolling to figure that out as well. Additionally, if anyone has already done all of this work, I would greatly appreciate the information, as would my investors. Thanks in advance.

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  3. #2
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    8 gramms of espresso per shot.... our drinks are all a double shot, plus milk & paper. I've got a spread sheet at home where I enter my cost per pound for beans, plus cost per gallon for milk and my cost per case for cups & lids... out comes my COGS. COGS X 3 = sugested retail price, then I adjust the SRP to my market conditions. If you want, I'll look for the excel sheet and email it to you.

  4. #3
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    don't forget

    chocolates for mochas, syrups for flavored latte's, and you'll have it...don't really need a spread sheet its just simple math:

    espresso typically runs 8 to 12 cents a shot depending on the quality \ price of the beans you buy.

    milk here is 2.33 per gallon or 128 ounces

    chocolate I pay almost a quarter for a typical 16 ounce drink - more for a 20 and 24 ounce...I break down the chocolate by the ounce just like the milk and watch for sales on them and stock up.

    lid and cup

    syrups...how much per bottle, I use 1883's, how many ounces in a bottle and is your shot 1 ounce - I vary this based on size of the drink.

  5. #4
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    I've been Googling this topic this morning, and found a pretty good breakdown - adjust for your own variables.

    It's from a user forum, so I don't even know how to credit the author, but the whole thread can be found at http://answers.google.com/answers/threadview?id=200279

    I've quoted the part most relevant to us below:

    To me, an ideal specialty coffee retail concept boils down to
    expertise and margins. The cost of goods sold (COGS - operator's cost
    of ingredients and products sold) on a sandwich or fine dessert is
    60%, if you're careful, while the COGS on a latte is only 23%.
    (Remember, as in golf, the lower the number, the better.)..."

    There is an excellent chart of assumptions on costs:

    Assumptions

    Daily sales goal $1,000

    Cost of coffee $7 per lb.

    Shots of espresso per lb. of coffee 62 (11 cents per shot)

    Cost of milk $3 per gal.; 128 fl. oz. per gal = 2 cents per oz. (9 oz.
    per "Double-Tall Flavored $2.75" drink)

    Flavored Syrup $3.60 per 24-oz. bottle (3/4 oz. per drink = 11 cents)

    Single Shot 1 oz. of coffee by volume

    Ounces of drip coffee per pound of coffee 360 (23 cents per 12-oz.
    cup)

    Food and non-coffee beverage markup 100% (50% margin)

    Food shrinkage and supplies 10%

    Hours of operation 14 (5:30 a.m. - 7:30 p.m.)


    You will want to see the entire breakdown on costs and profits that
    follow in this article. But just for example, $1,000 of espresso
    drinks can gross $770 based on this analysis:

    Double-shot flavored espresso-based drink (coffee 22 cents, milk 18
    cents, syrup 11 cents, cup 6 cents, lid 3 cents, condiments/supplies 3
    cents)

    Retail $2.75
    Number sold 365
    Cost of goods 23%
    Gross profit $770

  6. #5
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    wow...just what I was looking for...thanks

  7. #6
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    Shots of espresso per lb. of coffee 62 (11 cents per shot)
    Not disagreeing, but many shops elect to always pull double shots even if the order calls for a single espresso. So the break down could be different if you decided to go this route.

    1 pound = 450 grams
    2 shots + waste = 14 grams + 2 grams = 16 grams/shot
    450 grams / 16 grams/shot = 28 shot
    at $7.00 per pound, cost of espresso per order = $7/28 = $0.25

    If you add constant espresso grind adjustment, your double espresso shots cost more like $0.26 to $0.27.
    You want cream and sugar?
    NO COFFEE FOR YOU! NEXT!

  8. #7
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    Since the COGS is 23% - what about the avg labor cost per drink - does anyone have any data on this?

  9. #8
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    always pull doubles

    Quote Originally Posted by ElPugDiablo
    Shots of espresso per lb. of coffee 62 (11 cents per shot)
    Not disagreeing, but many shops elect to always pull double shots even if the order calls for a single espresso. So the break down could be different if you decided to go this route.

    1 pound = 450 grams
    2 shots + waste = 14 grams + 2 grams = 16 grams/shot
    450 grams / 16 grams/shot = 28 shot
    at $7.00 per pound, cost of espresso per order = $7/28 = $0.25

    If you add constant espresso grind adjustment, your double espresso shots cost more like $0.26 to $0.27.
    We always pull doubles but if we don't immediately use the extra shot it gets put into the cooler for cold drinks...its not lost so I wouldn't apply the cost of it too the single shot drink...

  10. #9
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    Not sure if this is what you're really looking for or not, but It found it usefull.

    http://www.specialty-coffee.com/Tools/c ... ulator.asp

  11. #10
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    Hi Editorbob.

    I am looking to start my own coffee shop, and am writing a business plan. Your excel spreadsheet looks like a great tool. Could you email it to me? (this site doesn't like me to put my email address so just remove the spaces here - max t cobb @ gmail . com)

    Thanks!

 

 
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