It Costs 20c For A Shot Of Coffee. So Why Does A Latte Cost $5?
DMARGE has done the math and a shot of coffee costs just under 20c. So why does a coffee cost upwards of $5 at most cafes in Australia?
The cost of living is undeniably expensive and prices just keep on rising. And while one of the finer experiences in life is heading down to your local cafe and getting a barista-made cup of coffee, that too is getting pricey AF.
But why is it so expensive? By our calculations, coffee costs about 20 cents per shot. If you’re wanting the specifics of how we got this figure, one kilogram of coffee produces 142 shots and ten kilograms of coffee costs around $280. So, 280 divided by 1420 equals 0.1972 AKA 20 damn cents.
Now, if you’re a coffee drinker who prefers a bit of milk with your caffeinated beverage (like a latte, flat white or cappuccino) that’s where the price understandably increases a tad. The average cost for a litre of milk in Australia is $1.50, so as most lattes use about 150ml of milk, that takes the total up to 43 cents (23c for the milk plus 20c for the shot of coffee).
However, if you have to have a ‘speciality’ milk, like oat or almond milk, in your coffee because it’s either a personal preference or a dietary requirement, your coffee will again understandably cost more. For instance, a litre of almond milk goes for roughly $3, meaning a latte made with almond milk costs 65 cents.
Considering the cost of a regular latte is just under 50c in terms of bare ingredients but most cafes in Australia charge $5, this begs the question: where is the extra $4.50 going?
Well obviously, there are other costs involved with cafes – the rent, wages, cups (bone china, ceramic or paper) etc. Plus, cafes need to make a profit. After all, it is a business and we live in a capitalist society – we can’t expect to just get coffee for free.
We won’t pretend to know all the costs involved with running a cafe but it would be interesting to see how much money per cup of coffee goes towards running costs and how much is a profit.