It Costs 20c For A Shot Of Coffee. So Why Does A Latte Cost $5?

The cost of living is undeniably high, and prices continue to climb. Even though getting a cup of coffee made by a barista at a local coffee shop is one of life’s finer experiences, it’s becoming expensive as hell.

However, why is it so costly? According to our calculations, each shot of coffee costs approximately twenty cents. Specifically, one kilogram of coffee yields 142 shots, and ten kilograms of coffee costs approximately $280. Therefore, 280 divided by 1420 equals 0.1972, or twenty cents.

Now, if you’re a coffee drinker who enjoys milk with your caffeinated beverage (such as a latte, flat white, or cappuccino), the price will increase slightly. The average price of a litre of milk in Australia is $1.50, so since most lattes contain approximately 150ml of milk, the total cost is 43 cents (23c for the milk plus 20c for the shot of coffee).

However, if you require “specialty” milk, such as oat or almond milk, in your coffee due to a personal preference or dietary restriction, your coffee will again, understandably, be more expensive. A litre of almond milk costs approximately $3, so a latte made with almond milk costs 65 cents.

Given that the cost of ingredients for a regular latte is just under 50 cents, but most cafes in Australia charge $5, this begs the question: where is the additional $4.50 going?

Obviously, cafes incur additional expenses, such as rent, wages, cups (bone china, ceramic, or paper), etc. Moreover, cafes must generate a profit. Considering that it is a business and we live in a capitalist society, we cannot expect free coffee.

Read more •

Suggested Reading