Quick answer: Coffee shop COGS is the cost of everything you sell: coffee, milk, syrups, food and the packaging that leaves with each order. Calculate it monthly as beginning inventory plus purchases minus ending inventory, then divide by sales. Many operators use a rule of thumb of roughly 25–35% of sales for total COGS, with drinks usually lower than food. Your right number depends on your menu and prices.
Key takeaways
- COGS includes ingredients and packaging, not labor or rent.
- Calculate monthly: begin + purchases − end.
- A common rule of thumb is ~25–35% total; drinks often run lower than food.
- Track it by category to see what's actually moving.
The formula
COGS = beginning inventory + purchases − ending inventory
COGS % = COGS ÷ sales × 100
Use the same period (usually a month) for every number, and count inventory on the same day each month. Our inventory management guide covers the counting system.
What goes in (and what doesn't)
| In COGS | Not in COGS |
|---|---|
| Coffee beans, espresso | Labor and payroll taxes |
| Milk, plant milks, cream | Rent and occupancy |
| Syrups, sauces, powders, tea | Utilities |
| Food and pastry | Equipment and repairs |
| Cups, lids, sleeves, straws, carriers, bags | Marketing |
| Napkins and stir sticks given with orders | Card processing fees |
Rule-of-thumb ranges
These are common operator benchmarks, not industry standards. Use them to spot problems, not to set your prices:
| Category | Rule-of-thumb range |
|---|---|
| Espresso drinks | Often ~20–30% of drink price |
| Brewed coffee | Often lower than espresso drinks |
| Food and pastry | Often ~30–40% |
| Total COGS | Often ~25–35% of sales |
If you're well above these ranges, look for pricing, portioning or waste problems. If you're well below, check that you're counting everything, including packaging.
Why COGS is under pressure
World Coffee Portal describes unprecedented cost pressures on U.S. coffee shops, and green coffee prices remain elevated: the International Coffee Organization's composite indicator averaged about 249 U.S. cents per pound in June 2026, with arabica groups well above that. When input costs climb, COGS creeps up unless prices and recipes keep pace.
The levers that move COGS
- Price: the fastest lever. See our menu pricing guide.
- Recipes and portions: standardize shots, milk and syrup pumps.
- Waste: milk at close, expired syrups, remakes.
- Purchasing: volume tiers, fewer SKUs, recurring orders.
- Mix: promoting higher-margin drinks.
- Packaging: standardized lids and right-sized cups.
Start with our cost per drink guide to see which drinks drive your number.
Make packaging predictable
Affogato Bean quotes branded cups, lids and sleeves per unit and delivers them on a schedule with Affogato Reserve, one less line that surprises you each month. See products.
General information, not financial advice.
Frequently asked questions
What is included in coffee shop COGS?
Everything that goes into what you sell: coffee, milk, syrups, tea, food and pastry, and the packaging that leaves with each order, such as cups, lids, sleeves, straws and bags. Labor, rent and utilities are not part of COGS.
What is a good COGS percentage for a coffee shop?
Many operators use a rule of thumb of roughly 25–35% of sales for total cost of goods, with drinks usually running lower than food. Treat it as a starting benchmark, since the right number depends on your menu, prices and positioning.
How do you calculate COGS?
Beginning inventory plus purchases during the period, minus ending inventory, equals COGS. Divide by sales for the same period to get COGS percentage.
Sources
- World Coffee Portal, “Growth Slows in $58.5bn US Branded Coffee Shop Market Amid Unprecedented Cost Pressures (Project Café USA 2026).”
- International Coffee Organization, “ICO Composite Indicator Price, June 2026.”
Sources checked October 2026. Statistics are reported as published by each source.