I talk to café owners every week who can tell me exactly what their rent costs, but have never worked out what a single flat white costs to make. That gap is where margin quietly disappears.

Here's the maths, so you can price with confidence instead of matching whatever the café down the road charges.

The real cost per cup

Cost per cup isn't just the coffee. It's:

Coffee + milk + cup and lid + extras + wastage + your time

Most owners count the beans and forget the rest. That's why a menu that looks profitable on paper can still leave you short at the end of the month.

What each size really costs

These are rough figures, based on our wholesale price of $39.90 a kilo and milk at around $2 a litre. Our house recipe uses a 22.5g dose, which gives you about 44 serves per kilo, so the coffee costs around 90 cents a cup.

  • 8oz: coffee 90c, milk 35c, cup and lid 15c, wastage 10c. Total: around $1.50
  • 12oz: coffee 90c, milk 50c, cup and lid 18c, wastage 12c. Total: around $1.70
  • 16oz (usually with an extra half shot): coffee $1.35, milk 70c, cup and lid 22c, wastage 15c. Total: around $2.42

What to charge

Most specialty cafés aim for a beverage cost of around 20 to 30% of the sale price.

Price = ingredient cost ÷ target cost percentage

In our part of the world, a regular 8oz coffee typically sells for $5.20 to $5.50. At $5.35, that's a beverage cost of about 28%. That's within a healthy range.

Apply the same 28% to the larger sizes and you get:

  • 12oz: around $6.10
  • 16oz: around $8.65

Most cafés charge nowhere near $8.65 for a 16oz. Which brings me to the biggest trap on the menu.

The 16oz trap

The 16oz is the most expensive coffee you make. It uses more milk, often more coffee, a pricier cup, and more of your barista's time.

Time is money, and it belongs in your costings. Two 8oz coffees can be steamed together in one small jug in about a minute. Two 16oz coffees need a bigger jug, take longer to steam and are harder to texture well, so allow closer to 90 seconds. At around $30 an hour including on-costs, every extra 30 seconds on the machine costs you 25 cents. In a rush, it also costs you the next customer in the queue.

So before you commit to a box of 1,000 16oz cups, run your costings. If you can't charge enough to cover it, you're better off not offering the size.

Don't undercharge for extras

Dirty chais and mochas are the most commonly underpriced drinks on a café menu. Every extra ingredient needs to be costed:

  • A dirty chai is a chai latte plus a shot of espresso. That's chai powder or syrup (40–60c) on top of the coffee (90c) and the milk. It should sit well above your latte price.
  • A mocha adds chocolate, around 30–50c per serve.
  • Alternative milks usually cost two to three times more than dairy. Charge accordingly.
  • Syrups and extra shots need a set price, every time.

Add value, bring in new customers

Not everyone walking past your café drinks a flat white. A few well-chosen extras can bring in customers your core menu misses:

  • Batch brew. Fast to serve, low labour and a great margin. It brings in filter coffee lovers and anyone in a hurry.
  • Iced coffees, made well. Iced lattes, iced long blacks and cold brew bring in younger customers and anyone avoiding hot drinks in summer.
  • Cold foam. It turns a simple cold drink into something worth paying more for.

These broaden your customer base, and they often carry better margins than your core coffee.

Common pricing mistakes

  • Copying the café next door. Their rent, wages and supplier costs aren't yours.
  • Forgetting packaging. Cups, lids and sleeves add up fast across volume.
  • Ignoring wastage. Spilled milk, over-pulled shots and unnecessary grinder purges are real costs. Budget for them. Our guide to dialling in your espresso machine shows how quickly purging adds up.
  • Never revisiting prices. Green coffee prices shift, and a menu priced two years ago is often quietly eating your margin.

Raising prices without losing customers

Small, regular adjustments of 20 to 50 cents are far less noticeable than one big jump after years of holding steady. Most regulars absorb a modest increase without comment, as long as the quality and consistency haven't slipped. What they notice is a sudden jump that feels unexplained.

For help running these numbers against your actual costs, get in touch through our wholesale page. It's a conversation we have with our wholesale partners regularly.