Profit margin on drip coffee versus expresso drinks

MVcoffee

New member
Jan 22, 2008
1
0
Marin California
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!
 

jmeiss

New member
Dec 5, 2005
65
0
Lenexa, Kansas
MVcoffee said:
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?
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,222
6
Near Philadelphia, PA
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
 

davidsbiscotti

New member
Oct 4, 2007
338
0
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!
 

jmeiss

New member
Dec 5, 2005
65
0
Lenexa, Kansas
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.
 

ElPugDiablo

New member
Jul 16, 2004
991
0
Hartford and New Haven, CT
jmeiss said:
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
 

jmeiss

New member
Dec 5, 2005
65
0
Lenexa, Kansas
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...
 

ElPugDiablo

New member
Jul 16, 2004
991
0
Hartford and New Haven, CT
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.
 

jmeiss

New member
Dec 5, 2005
65
0
Lenexa, Kansas
well, I guess my point is that there are a lot of roasters out there that say their espresso is best at 20gr or 18 gr, or even 22gr (I laughed at that one).... Each machine does make a difference - you're right. But your temps shouldn't be so different across machines....
 
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