Business
COGS (Cost of Goods Sold)
Cost of Goods Sold (COGS) is the total cost of the ingredients and packaging that go into your drinks and food — beans, milk, syrups, cups, lids, sleeves. Specialty cafés target COGS at 22–28% of revenue; above 30% signals a pricing or sourcing problem.
COGS is the most controllable big number on a café P&L. The largest components are usually beans and milk (60–80% of COGS combined), followed by packaging (cups, lids) and add-ins (syrups, alt milks). Each one offers a different lever for margin improvement.
Healthy COGS targets vary by café type: espresso-led shops run 22–28%, pour-over bars run higher (25–32% due to green coffee costs), drip-heavy shops can be under 18%. Track yours monthly and react to trends, not single months.
The most common hidden COGS drainers are inconsistent portion control (over-pouring milk, syrup variation), inventory waste (expired pastries, spoiled milk), and price increases from suppliers that go unnoticed. Tighten these before changing bean quality or vendors.
FAQ
Frequently asked questions
What's a healthy COGS percentage for a coffee shop?
How do I lower café COGS without hurting quality?
Is COGS just food cost?
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