What is the Cost of a Cup of Coffee in a Cafe: How to Calculate Coffee Costs

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What is Cost?

Cost refers to the amount of money spent and the purchase price for producing goods and services. Typically, products and similar items will be sold at cost plus a certain profit margin. From the costs we usually see, the amount obtained by subtracting the seller's or worker's profit is the cost.

Where are Coffee Prices Determined?

Coffee has been traded as an internationally exchanged commodity for many years. Coffee prices are determined by futures trading of Arabica coffee varieties in the New York market and Robusta varieties in the London market. (Futures trading involves transactions involving the delivery of goods at some future time)

Coffee is also affected by weather and disease, and is said to be influenced by global economic conditions and luxury goods exchange rates.

Coffee Costs are About 1% to 20% of the Selling Price

If coffee sells for 25 yuan, the cost is considered to be around 2.5 to 5 yuan, or 10-20% of the price. Does this mean there's an 80% to 90% profit margin? One must consider that before coffee beans become a cup of coffee, there are various costs such as utilities, packaging, labor costs, transportation costs, and so on.

In coffee shops, store rent also varies, and interior and coffee equipment must also be depreciated. Even self-service coffee shops have costs as high as cafes with packaging materials. Even with profits between 80% and 90%, it cannot be said that the overall profit margin is high when all factors are considered.

Convenience Store Coffee Costs are High!

The selling price of 7-Eleven coffee is 8 yuan, and "the cost is expensive!" has been discussed. While it might seem "was the price set this way?", this is a cost structure that cannot be achieved in specialty coffee shops. However, in convenience stores, coffee is not the main product but part of the merchandise. Because the goal is to use coffee to attract customers to buy other items, even if coffee's profit is low, it's not a problem. To put it plainly, this means it's for the customers.

Dark Roast Coffee Costs More!

The price of coffee depends on the production area and brand name, but between light roast and dark roast, dark roast coffee costs more. The reason is simple - this is because the roasting time is longer, and the practical cost of roasting is more expensive than light roasting.

Coffee Costs are About 10% to 20% of the Selling Price

Coffee prices depend on futures trading in the New York and London markets. Coffee costs are typically about 10% to 20% of the selling price, and when coffee sells for 25 yuan, the cost is about 2.5 to 5 yuan, plus sugar and fresh ingredients... costs also vary depending on whether it's full service, self-service, a coffee shop, or a convenience store.

Considering coffee prices, it turns out that many people are involved in the process. This is something to remember - against this background of so many people's participation, you can buy inexpensive yet delicious coffee.

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