How much does a latte cost to make? And am I charging enough for it?
The short answer: the ingredients for a 12 oz latte usually cost between $1.00 and $1.55. Beans, milk, cup, lid and sleeve are all in that number. Labor, rent and waste come on top.
Below we show the sums line by line. Every figure marked as an example is our own input, so you can check the maths and swap in your numbers.
How much does a latte cost to make: the range
Three public sources give a range. We opened each one on 2026-10-02. They use different prices and different years, so treat the range as a guide.
| Source | Latte cost it states |
|---|---|
| Coffee Machine Depot | $1.00 to $1.55 for a 12 oz latte: beans $0.40 to $0.60, milk $0.35 to $0.50, cup and lid $0.15 to $0.25 |
| Coffee Shop Startups, cost of 100 coffees | $1.14: espresso $0.50, milk $0.40, cup and lid $0.24. It uses coffee at $12 a pound and milk at $4.00 a gallon |
| Espresso Services | About $0.89 for a flavored latte sold at $3.50. It uses espresso at $8 a pound and milk at $3.00 a gallon |
The lowest figure uses the lowest input prices. Your own supplier invoices matter more than any of these pages. Use the range to check your own result.
Line by line: one worked latte
This is an example, not a statistic. We chose the inputs. Change any of them to match your invoices.
Our example drink is a 12 oz latte with a double shot.
| Line | Input | Arithmetic | Cost |
|---|---|---|---|
| Espresso | 18 g at $30 per kg | 18 ÷ 1,000 × $30 | $0.540 |
| Milk | 240 ml at $1.20 per liter | 240 ÷ 1,000 × $1.20 | $0.288 |
| Cup | $0.14 each | $0.140 | |
| Lid | $0.06 each | $0.060 | |
| Sleeve | $0.05 each | $0.050 | |
| Ingredients and packaging | $0.540 + $0.288 + $0.140 + $0.060 + $0.050 | $1.078 |
Round that to $1.08. It sits inside the sourced range of $1.00 to $1.55.
To find your own cost, follow three steps:
- Weigh your shot. Put the cup on a scale and note the grams of espresso in it.
- Divide your bag price by its weight in grams. Multiply by your dose.
- Measure the milk you steam for this cup. Multiply the liters by the price per liter.
Add syrups and sugar the same way. A pump of syrup is the bottle price divided by the pumps in the bottle. Espresso Services, for example, counts a flavored latte's syrup at 22.5 cents from a $4.50 bottle.
The costs people forget
The $1.08 above is a clean number. Real cafes spend more, because some drinks never reach a customer.
Dumped shots. Every shot you pull to dial in the grinder is coffee you paid for. Every bad shot you remake is too. For one week, put a small cup by the machine and count what goes in it.
Milk poured away. A pitcher is steamed for one drink and a second drink is canceled. The milk goes down the sink. Count the pitchers you pour out in a week.
Free drinks. Staff drinks, refills and a mistake made right all cost you the ingredients. The customer paid nothing for them.
Oat milk. The upcharge on the menu is not the cost. Here is an example with our own inputs. Say dairy milk is $1.20 per liter and oat milk is $2.40 per liter. In 240 ml, dairy costs $0.288 and oat costs $0.576. Oat costs $0.288 more. If you charge $0.70 extra, you keep about $0.41 of that. If you charge $0.30 extra, you keep about $0.01. Type in your own oat price to see which case you are in.
Here is a waste example. Say your waste adds 10% on top of ingredients. That is $1.078 × 0.10 = $0.108. Your cost per sold latte is $1.078 + $0.108 = $1.186. Round to $1.19.
The 10% is an example. We do not know your waste. Count it for a week and use your own figure.
Coffee shop profit per cup at three prices
Use the $1.19 cost with waste from above. Gross profit is the price minus that cost. Gross margin is gross profit divided by price.
| Price | Cost with waste | Left after ingredients | Gross margin |
|---|---|---|---|
| $4.50 | $1.19 | $3.31 | 73.6% ($3.31 ÷ $4.50) |
| $5.00 | $1.19 | $3.81 | 76.2% ($3.81 ÷ $5.00) |
| $5.50 | $1.19 | $4.31 | 78.4% ($4.31 ÷ $5.50) |
Coffee Machine Depot says well-run shops typically run a gross margin of 60% to 70% on beverages. Our example sits above that. Check your own inputs before you relax. Maybe your cup is bigger or your beans cost more.
The same source says that with ingredients at $1.25 and a 70% gross margin target, the price points to roughly $4.15 and up. With our $1.19, the same step gives $1.19 ÷ 0.30 = $3.97.
What is left after labor
Gross margin is not what you keep. Now add the barista. This is an example: 3 minutes of work at a loaded wage of $20 an hour. That is 3 ÷ 60 × $20 = $1.00 per latte.
| Price | Left after ingredients | Minus labor ($1.00) | Share of price |
|---|---|---|---|
| $4.50 | $3.31 | $2.31 | 51.3% |
| $5.00 | $3.81 | $2.81 | 56.2% |
| $5.50 | $4.31 | $3.31 | 60.2% |
Gross margin and net margin are different things. Gross margin counts only the cost of the item. Net margin is what is left of all sales after every cost: labor, rent, power, card fees, software and the rest.
Published net margins are much lower than the numbers above. Coffee Machine Depot gives roughly 12% to 20% for a well-run specialty shop. Coffee Shop Startups says the average coffee shop profit margin ranges from 5% to 10%, and that many independents reach 12% to 18%.
So a latte that leaves $3.31 does not become $3.31 of profit. The $3.31 pays for everything else in the shop first.
Cafe food cost percentage: what it means and what it does not
Food cost percentage is the cost of an item divided by its price. Our $1.19 latte at $4.50 is $1.19 ÷ $4.50 = 26.4%. At $5.50 it is 21.6%.
Espresso Services says a successful food-service operation has food costs of around 30% to 35% of revenue. That figure is for a whole operation. We do not have a sourced figure for drinks alone.
A low percentage looks good, but you cannot pay rent with a percentage. Here is an example with our own inputs. Say a drip coffee sells for $3.00 and costs $0.45 to make.
| Item | Price | Cost | Cost % | Cash left per cup |
|---|---|---|---|---|
| Drip coffee | $3.00 | $0.45 | 15.0% ($0.45 ÷ $3.00) | $2.55 |
| Latte at $4.50 | $4.50 | $1.19 | 26.4% | $3.31 |
The drip coffee has the better percentage. The latte leaves $0.76 more cash per cup. Sell 100 of each and the drip leaves $255 and the latte leaves $331. Rank your menu by cash per item first, and use the percentage as a second check.
For the full method on the whole menu, read menu engineering explained. To see how many drinks a day cover your fixed costs, read the restaurant break-even point formula.
What a free coffee on a stamp card really costs
A free coffee costs you what it cost you to make. The menu price is a different number.
The free Loyalty Card Calculator shows this with a worked example. The inputs are a 10-stamp card, a $5 average sale and a 75% margin. A free coffee then costs $1.25 to give away.
The customer paid for ten visits, so they spent $50. The reward costs $1.25. That is $1.25 ÷ $50 = 2.5% of what they spent. Many owners expect 10%.
Now use our latte. If the free drink is our $1.19 latte on a 10-stamp card at $4.50, the customer spends $45. The reward is $1.19 ÷ $45 = 2.6%.
The calculator also shows how many extra visits the card must cause. Those are visits that would not have happened without the card. That number tells you if the card pays for itself.
Where KANJIN helps
We make KANJIN, so take this section as ours. Everything above works with a spreadsheet and a scale.
Free, with no card and no time limit:
- Profit by item is a screen where you type each item's price and cost. It shows which items make the money.
- Daily ledger keeps your takings, costs and invoices in one place.
- Break-even shows how many sales a day cover your fixed costs.
- Stamp card lets regulars collect stamps by phone number, with no app.
- 15 public tools run in the browser without an account. The Menu engineering matrix calculator is the one for this post.
Where KANJIN is weaker: it does not know your ingredient prices. You type them in, and you update them when your supplier changes a price. It does not read your POS. It works next to any POS, so you type your costs and the day's sales in yourself.
The Paid plan adds email tools for regulars, Google review requests and supplier and profit reports you can print. It is $39 a month, or $390 a year, per location, and the first 30 days are free. The free plan has no time limit. Nothing is charged until you start the paid plan yourself.
Frequently asked questions
What is a good profit margin on a latte? A gross margin of 60% to 70% on beverages is the range Coffee Machine Depot gives for well-run shops. Our example latte sits above that at 73.6% to 78.4%. Gross margin ignores labor and rent, so check your net margin too.
How much does oat milk add to the cost of a latte? It depends on your two milk prices. In our example, oat at $2.40 per liter against dairy at $1.20 per liter adds $0.288 to a 240 ml drink. Type in your own prices to get your figure.
What food cost percentage should a cafe have? Espresso Services puts a successful food-service operation at about 30% to 35% of revenue. A single drink often sits below that, as our latte does at 21.6% to 26.4%. Judge each item by the cash it leaves, not only by its percentage.
How much does a free coffee on a loyalty card cost me? It costs what the drink costs you to make. On a 10-stamp card with a $5 sale and a 75% margin, the Loyalty Card Calculator example shows $1.25 against $50 spent, or 2.5%. Use your own cost and price.
Your next step
Write down your espresso dose, your milk volume and the price of each. Then type your drinks into the free Menu engineering matrix calculator to see which ones earn the most per cup. No account is needed. With a free account, the same numbers live on the Profit by item screen.
For more cafe-specific numbers, see our cafe page.