The margin on coffee can reach 80-90% in food service businesses, making it one of the most profitable products. Many cafés and restaurants, however, underestimate how much they actually earn from coffee. In this article you'll learn exactly how to calculate the margin and what to watch out for.
What determines the margin on coffee?
The margin on coffee depends on three factors: the purchase price of the beans, your portion size, and the selling price. Unlike food, there are no VAT differences here (coffee in your establishment is 9% VAT), but there are big differences in quality and purchase price.
💡 Example: Standard espresso
Sell espresso for €2.50 (incl. 9% VAT):
- Selling price excl. VAT: €2.29
- Coffee beans per portion: €0.15
- Milk (small splash): €0.05
- Sugar/napkin: €0.02
Total cost price: €0.22 → Margin: 90.4%
Typical margins per coffee type
The margin varies greatly by coffee type. The more milk and extras, the lower the margin becomes:
- Espresso: 85-92% margin
- Cappuccino: 75-85% margin
- Latte: 70-80% margin
- Specialty coffee: 60-75% margin
💡 Example: Cappuccino
Sell cappuccino for €3.20 (incl. 9% VAT):
- Selling price excl. VAT: €2.94
- Coffee beans: €0.15
- Milk (150ml): €0.25
- Sugar/napkin/cup: €0.08
Total cost price: €0.48 → Margin: 83.7%
Hidden costs that reduce your margin
Many food service entrepreneurs forget to include costs that lower the coffee margin:
- Machine maintenance: €50-150 per month
- Energy: €2-4 per day for a professional machine
- Waste: poorly pulled shots, discarded milk
- Free refills: if you offer them
⚠️ Note:
Add machine maintenance and energy to your monthly coffee costs. With 300 coffees per month, this adds €0.50-0.80 per cup to your cost price.
Bean purchase price: big difference
The quality of your beans largely determines your margin. Cheap beans may seem attractive, but can actually harm your margin through poor taste and lower customer satisfaction:
- Supermarket beans: €8-12 per kg → €0.08-0.12 per espresso
- Professional blend: €15-25 per kg → €0.15-0.25 per espresso
- Specialty coffee: €30-50 per kg → €0.30-0.50 per espresso
💡 Example: Impact of more expensive beans
Switch from €12/kg to €20/kg beans:
- Extra cost per espresso: €0.08
- At €2.50 selling price: margin drops from 94% to 91%
- Still extremely profitable
Better quality often justifies higher price
Coffee as a profit engine
Coffee is often the highest margin item in your entire business. Use this strategically:
- Combine with pastries: increases average transaction
- Loyalty program: 10th coffee free costs you €0.22, customer feels €2.50 value
- Upsell: from espresso to cappuccino for €0.70 extra
With a system like KitchenNmbrs you can track exactly what each coffee variation costs, including all additions and waste. This way you see which combinations are most profitable.
How do you calculate the margin on coffee? (step by step)
Calculate cost price per portion
Add up all ingredients: coffee beans (usually 7-9 grams), milk, sugar, and packaging. Don't forget to include maintenance and energy spread over your monthly volume.
Determine selling price excluding VAT
Divide your menu price by 1.09 to get the price excluding 9% VAT. This is the price you need to use for your margin calculation.
Calculate the margin percentage
Use the formula: (Selling price excl. VAT - Cost price) / Selling price excl. VAT × 100. With coffee you usually end up between 70-90%.
✨ Pro tip
Check your coffee margin per month, not per cup. When you include maintenance and energy spread over your total volume, you get a more realistic picture of what coffee actually generates.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Why is the margin on coffee so high?
Coffee beans are relatively inexpensive and you use only a small amount per portion. Additionally, coffee requires little labor time and customers are willing to pay a premium for good coffee.
Should I include machine maintenance in my cost price?
Yes, definitely. Machine maintenance, energy, and repairs are real costs that reduce your margin. Divide these monthly costs over your number of sold coffees for a realistic picture.
How can I increase my coffee margin?
Focus on volume rather than cheaper beans. Better quality justifies higher prices and attracts more customers. Upselling to cappuccino or latte also increases your absolute profit per customer.
What is a realistic coffee price for my business?
Check what comparable businesses in your area charge. An espresso between €2.00-3.00 is normal, depending on location and positioning. Even at lower prices your margin remains high.
How many coffees can I make from 1 kg of beans?
From 1 kg of beans you get approximately 110-140 espressos, depending on your portion size. Calculate an average of 7-8 grams per espresso for good strength.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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