How to Calculate Cost of Goods Sold (COGS) for Your Cafe and Use It to Set the Right Prices

Running a cafe means juggling a lot of moving parts. You’re managing staffing, marketing, and customer experience. At the end of the day, profitability often comes down to one thing: knowing your numbers. One of the most important numbers for any cafe owner to understand is Cost of Goods Sold (COGS).

If you’re serving coffee, tea, or specialty drinks, understanding your COGS not only keeps your margins healthy but also helps you price confidently. As a coffee roaster that partners and works closely with cafes, we’ve seen how powerful it can be when owners use a simple framework (and the right tools) to calculate and manage COGS.

That’s why we created a COGS and Pricing Calculator that you can download (link at bottom) and start using right away. But first, let’s walk through the basics.

What is COGS?

COGS is the total cost of the ingredients and packaging used to produce the items you sell. For a cafe, this typically includes:

• Coffee beans 

• Milk and alternative milks

• Syrups, sauces, and flavorings

• Tea, matcha, and other drink bases

• Cups, lids, sleeves, straws, stir sticks

The key thing to remember is that COGS does not include labor, rent, or overhead. It is strictly the cost of the consumables that go into each drink.

Using COGS to Price Drinks

If you’ve ever heard people talk about pricing in terms of a COGS ratio (for example, “keep your COGS around 25–30%”), the multiplier method is simply another way of expressing the same thing.

The ratio tells you what percentage of the final price is made up of your ingredient costs. The multiplier flips that around and asks, “How much times my cost do I need to charge in order to hit that ratio?”

Here’s how they connect:

• A 25% COGS ratio means your costs should be one-quarter of your price. That works out to a 4x multiplier (1 ÷ 0.25 = 4).

• A 30% COGS ratio means your costs should be about one-third of your price. That works out to roughly a 3.3x multiplier (1 ÷ 0.30 ≈ 3.3).

So when you apply a multiplier, you’re ensuring that the COGS only make up a portion of the price you charge for each drink. The rest of the price goes toward covering labor, rent, utilities, and profit.

How the Calculator Helps

While you can do this math manually, it becomes difficult to maintain when ingredient prices are constantly changing. Our COGS and Pricing Calculator simplifies everything.

• Input your ingredient costs in the units that you purchase in, and the calculator breaks them down to a base unit cost.

• Input your drink sizes and standard recipes.

• Automatically see your total COGS and suggested pricing at different margin levels.

This makes it easy to:

• Spot low-margin items that might need a price adjustment.

• Confidently launch new menu items.

• Compare supplier options and see how ingredient changes affect your bottom line.

Why It Matters

We’ve seen cafes struggle because they set prices based only on what “feels right” or what competitors are charging. The problem is that without running the numbers, you risk underpricing your drinks. Over time, that eats away at profit.

By using a COGS-based approach, you’re not guessing. You’re ensuring that every drink contributes to the health and sustainability of your cafe.

Grab the Free Calculator

We built this tool because we want our cafe partners to succeed. That means not just with great coffee, but with profitable businesses.

👉 Download the COGS and Pricing Calculator here.

💬 At Bugle Call Coffee, this kind of guidance is part of the support we provide for every wholesale partner. From recipes to profitability tools, we’re here to help you succeed.

📋 Interested in working with us? Complete our Wholesale Inquiry Form to learn more.