How much does it actually cost to make a cup of coffee in your café? Knowing the answer is essential for setting profitable prices, controlling expenses and running a sustainable coffee business.
Whether you own a café, restaurant or coffee shop in Nigeria, understanding your cost per cup of coffee helps you avoid underpricing your drinks and losing money.
Here’s how to calculate it.
1. Calculate Your Coffee Bean Cost
Start with the cost of your coffee beans and the quantity used per drink.
For example, if 1kg of coffee beans costs ₦45,000 and you use 18g for one espresso:
- Cost per gram: ₦45
- Coffee used: 18g
- Cost per espresso: ₦810
This gives you the coffee cost for one espresso shot.
2. Add Milk, Syrups and Other Ingredients
For milk-based drinks like lattes and cappuccinos, include every ingredient used.
Example: Cost of making one latte:
- Espresso: ₦810
- Milk: ₦300
- Flavoured syrup: ₦150
Total ingredient cost: ₦1,260
Calculate ingredients based on the quantity used per drink rather than the full purchase price of each product.
3. Include Packaging Costs
For takeaway orders, remember to include disposable cups, lids, sleeves, straws and napkins.
For example, if packaging costs ₦200 per drink, your total cost becomes ₦1,460.
4. Calculate Your Café Operating Costs
Your cost of making coffee also includes a share of your business expenses, such as:
- Staff salaries
- Electricity and water
- Rent
- Equipment maintenance
- Cleaning supplies
For example, if your monthly operating expenses are ₦600,000 and you sell 1,000 cups monthly:
₦600,000 ÷ 1,000 = ₦600 per cup
5. Calculate the Total Cost Per Cup
Using our latte example:
| Cost item | Amount |
| Coffee | ₦810 |
| Milk | ₦300 |
| Syrup | ₦150 |
| Packaging | ₦200 |
| Operating expenses | ₦600 |
| Total cost per cup | ₦2,060 |
Your estimated cost of making one latte is ₦2,060.
6. Set the Right Selling Price
Once you know your cost per cup, you can calculate your selling price.
If you want a 60% gross profit margin, use this formula:
Selling Price = Cost Per Cup ÷ (1 − Gross Profit Margin)
₦2,060 ÷ 0.40 = ₦5,150
You could price the latte at approximately ₦5,200.
Remember that gross profit margin is different from simply adding a percentage to your cost. Consider your target customers, competitors, taxes and other business expenses before deciding on your final price.
Build a More Profitable Coffee Business with EBC
Knowing your coffee cost per cup helps you make smarter purchasing decisions, reduce waste and maintain consistent drink quality.
At Everything But Coffee, we provide coffee machines, grinders, beans, syrups and accessories for cafés and coffee businesses.
Explore our commercial coffee machines, coffee beans and coffee accessories.
Great coffee brings customers back. Good costing helps keep your café profitable.
