I'm a really tight pricing guy. I'm going to be switching my espresso menu to a higher quality. By that, I mean switching to a GMO free, grass-fed, organic milk, and paying more for much better tasting espressos. In doing this, I am also going to eliminate my large sized latte's off of our menu. I will have a 10 n 14 oz latte, and I will go with an 8 oz cappuccino only.
When I break down my drinks I do it with the high average amount of milk use, and a pretty exact gram amount of espresso. Since I pull double shots only, I factor a double shot for both small and medium cafe lattes. New espresso is going about .02 cents a gram, and milk is at about .05 cents a fluid oz. And my paper cost for small is .13, medium is .16.
Before, I always factored my paper in at base cost with my ingredient cost, and then went on sales percentage going for anywhere between 20-30% COG. But I've been thinking deeper lately. The cost of paper. Should I make it like my retail items and sell at 50% COGS since I don't technically craft the cup? Should I sell it at cost at .13-.16 in addition after my Mark-up to ingredients? Or should I continue including into my base cost. What do you do at your cafe, and what is your reasoning? We also have ceramic cups. I don't change the price of my drinks if they use a ceramic instead. Is that unethical from a sales perspective?
10 oz latte with paper included in base: 2.95 retail (cost/.3)
10 oz latte with paperx2 added afterwards: 2.75 retail (cost ing./.3)+(paper x 2)
10 oz latte with paper cost added afterwards: 2.65 retail (cost ing./.3) + paper cost
The nickels and dimes make a huge difference in the coffee world.
(we take any extra steamed milk, which usually isn't much, and keep it in a steel pitcher in the fridge. If someone orders a smoothie or blended espresso, we use the extra milk in that.)
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