Articles · October 16, 2026
How Much Does It Cost to Make a Latte?
A latte costs your shop whatever goes into the cup: the espresso, the milk, any syrup or sauce, and the cup, lid and sleeve, all priced from your own invoices. Add those up for each size, then divide by your target cost percentage, and you have a menu price you can defend.
That's the short answer. The rest of this guide walks through the math one step at a time, with a worked example you can copy. Every number below is a made-up example, not a benchmark or a supplier quote. Swap in your own.
What goes into the cost of a latte
When owners say "cost per cup," they usually mean the cost of goods for that one drink. For a latte that's:
- Espresso: the grams of coffee in your dose, priced from the bag you buy.
- Milk: the ounces you actually pour and steam, not the ounces on the recipe card.
- Syrups and sauces: priced per pump or per ounce, if the drink has them.
- Packaging: cup, lid, sleeve, and a straw for iced drinks.
- Waste: milk left in the pitcher, shots dumped while dialing in, and spills.
Labor, rent and utilities aren't in cost per cup. Your margin has to cover those, which is why getting the cup cost right matters so much.
Step 1: Turn your invoices into cost per unit
Everything starts with one formula:
Ingredient cost = (amount used ÷ amount in the package) × package price
Example: you buy espresso in 1 lb bags (453.6 g) at $14.00, and your double shot uses an 18 g dose. That's 18 ÷ 453.6 × $14.00 = $0.56 for the espresso.
Example: whole milk at $4.00 a gallon (128 oz) works out to $4.00 ÷ 128 = $0.031 per ounce.
Do this once for every ingredient you stock, and keep the list next to your invoices so you can update it when prices change.
Step 2: Measure what you actually pour
Recipe cards say "12 oz of milk." Baristas fill the pitcher a little high, steam it, and pour off the rest. Weigh or measure a handful of real drinks during a normal shift and use the average. Do the same for syrup pumps, since pump sizes vary by brand and by how worn the pump is. This one step is where most cost-per-cup math goes wrong.
Step 3: Add the packaging
Price each packaging item from its case cost. Example: if a case of 1,000 hot cups costs $120, each cup is $0.12. Add the lid and sleeve the same way. In the example below, a 12 oz cup, lid and sleeve together come to $0.20, and the bigger sizes cost a little more.
Worked example: a hot latte at three sizes
All numbers are examples only.
| Size | Shots | Milk | Espresso | Milk cost | Packaging | Total cost |
|---|---|---|---|---|---|---|
| 12 oz | 2 | 9 oz | $0.56 | $0.28 | $0.20 | $1.04 |
| 16 oz | 2 | 12 oz | $0.56 | $0.38 | $0.23 | $1.17 |
| 20 oz | 3 | 15 oz | $0.83 | $0.47 | $0.27 | $1.57 |
Notice the jump at 20 oz. The third shot adds more cost than the extra milk does. If your large is priced only a little above your medium, that's the size to check first.
Do this faster: the Coffee & Drive-Thru Menu Pricing Calculator does this math for up to 20 drinks at 4 sizes each, straight from your ingredient and packaging costs, in Excel or Google Sheets.
Step 4: Turn the cost into a price
The simplest pricing method uses a target cost percentage, meaning the share of the price that goes to ingredients and packaging:
Price = cost per cup ÷ target cost %
There's no single right target. It depends on your rent, labor and volume, so pick one that works for your shop. As an example only, at a 25% target:
- 12 oz: $1.04 ÷ 0.25 = $4.16, rounded up to $4.25
- 16 oz: $1.17 ÷ 0.25 = $4.68, rounded up to $4.75
- 20 oz: $1.57 ÷ 0.25 = $6.28, rounded up to $6.50
Then look at the dollars, not just the percentage. A large drink can have a higher cost % and still put more gross profit in the drawer per cup. Check both before you change the menu board, and compare the result with what your market will bear.
Don't forget milk swaps and add-ons
Milk alternatives and add-ons are where margin quietly leaks. Example: oat milk at $4.50 for a 64 oz carton is about $0.070 per ounce, versus $0.031 for dairy. On the 20 oz latte above (15 oz of milk), that's roughly $1.05 of oat milk versus $0.47 of dairy, an extra $0.59. A flat $0.75 upcharge covers it in this example, but run the math on your biggest cup, and on iced drinks if they use more milk.
Do the same for syrups. Example: a 750 mL bottle (about 25.4 oz) at $8.00, with a pump that dispenses a quarter ounce, works out to about $0.08 a pump. If a flavored latte gets three or four pumps and you don't charge for syrup, that cost comes straight out of your margin.
Drive-thru and delivery apps change the math
Delivery apps take a commission on each order, and drive-thru and delivery orders often need extra packaging like carriers and bags. Example: on a $4.75 latte with a 20% commission, you keep $3.80 before your $1.17 cost. If you want the same margin you get in the store, the app price usually has to be higher. Figure your net after fees for each channel, not just your menu-board price.
Common mistakes
- Costing from the recipe card instead of what baristas actually pour.
- Leaving out packaging. On a small hot drink it can be a big share of the cost.
- One upcharge for every size on oat milk, extra shots or cold foam, even though the large uses more.
- Never updating costs. When a supplier raises prices, your cost per cup changes the same day.
- Copying the shop down the street. Their prices reflect their costs and their rent, not yours.
- Watching only cost %. Gross profit dollars per drink pay the bills.
The bottom line
Cost every drink from real invoices and real pours, add packaging, price from a target you chose on purpose, and recheck whenever a supplier price moves. If you'd rather not build the spreadsheet yourself, the Menu Pricing Calculator on Etsy handles cost per cup by size, milk swaps, add-ons, packaging and delivery-app pricing in one workbook. If you're also scouting a new location, the Coffee Shop Owner Bundle pairs it with the Drive-Thru Site Selection Scorecard.
Want the formulas on one page first? Grab the free Coffee Drink Cost Cheat Sheet.
From CoffeeOpsToolkit. Built by a former coffee industry executive who led development for a multi-unit drive-thru chain.
This article was written with the help of AI tools. All example numbers are made up for illustration; use your own invoices.