In the dessert and beverage business, profit isn’t a mystery—it’s the result of careful calculations. Many F&B business owners, especially those just starting out, often set their selling prices based on “rough estimates” or by matching competitors’ prices. However, without a detailed understanding of the Cost of Goods Sold (COGS), you’re running your business with your eyes closed.

A single glass of a beverage sold may not actually generate a profit—or may even result in a loss—if the cost of goods sold (COGS) isn’t calculated correctly. This article will break down how to accurately calculate COGS per glass, so you can set the right selling price and maximize the profitability of your beverage business.

Breaking Down the Cost Components of a Single Glass of Beverage

To calculate COGS accurately, you must break down each component. Business owners often forget to account for “minor” expenses like ice cubes or straws, even though these costs add up.

Let’s break down the main components of the cost of goods sold (COGS) for a single glass of a trendy beverage:

1. Cost of Main Ingredients

• Beverage Base:Drink powder, tea (leaves/powder), or coffee beans.
• Liquids: Milk (UHT/fresh milk), creamer, or mineral water.
• Sweeteners: Liquid sugar, flavored syrup, fruit puree/sauce/jam.

2. Cost of Toppings and Add-Ins (Fillings & Toppings)

• Toppings: Boba / tapioca pearls, popping boba, jelly (such as coffee jelly or grass jelly), crystal jelly, nata de coco, whipped cream, or ice cream.
• Optional: Sauce (caramel, chocolate) or toppings (sprinkles, cocoa powder).

3. Cost of Consumables

• Ice Cubes: Ice cubes involve production costs (water, electricity for the ice machine) or purchase costs. Never forget this!

4. Packaging Cost

This is everything customers take home along with their drinks.

• Plastic or papercups
• Convex/flat lid
• Straws (plastic, paper, or boba straws)
• Plastic sealer (if using a heat press)

Case Study: Calculating the Cost of Goods Sold for “Strawberry Jasmine Milk Tea”

The key to the calculation is the Standard Recipe. You must have precise measurements for each drink you make to ensure consistent cost of goods sold (COGS). For example, suppose you want to calculate the cost of goods sold for one glass (16 oz) of “Strawberry Jasmine Milk Tea.”

Step 1: Convert the Purchase Price to Cost per Gram/mL

First, find out the unit price of your materials.

• Jasmine Tea Base (Bobaking): 450 g = 111,000 rupiah
  • Cost per gram = 111,000 IDR / 450 g = 247 IDR per gram
  • Assumed Brewing Ratio: 10 grams of tea leaves are used to make 1,000 ml (1 liter) of tea.
  • Cost for 1,000 ml of tea = 10 grams × Rp 246.7/gram = Rp 2,467
  • Cost per ml of tea = Rp 2 , 467 / 1,000 ml = Rp 2.467 per ml (We'll round this to Rp 2.5/ml)

• Water: 19 liters (19,000 ml) = 15,000 rupiah
  • Cost per ml = 15,000 IDR / 19,000 ml = 1 IDR/ml

• Dreamy Milky Base: 1 kg (1,000 g) = 69,750 rupiah
  • Cost per gram = 69,7500 IDR / 1,000 g = 69.75 IDR per gram
  • Assumed Brewing Ratio: 1 gram of creamer mixed with 1 ml of water.
  • Cost per 1 ml of base creamer = (1 gram × Rp 69.75/gram) + (1 ml × Rp 1/ml) = Rp 69.75 + Rp 1 = Rp 71/ml
  • Cost per ml of base creamer = 71 rupiah per ml

• Strawberry Fruit Mix (Bobaking): 1 liter / 1.3 kg (1,300 g) = 126,500 IDR
  • Cost per gram = 126,500 IDR / 1,300 g = 97 IDR/g

• Simple Syrup (Bobaking): 1 liter / 1.3 kg (1,300 g) = 31,500 IDR
  • Cost per gram = 31,500 IDR / 1,300 g = 24 IDR/g
• Ice Cubes: Cost per 1 g (assumed) = Rp 1/g
• Complete Set (Cup + Lid + Straw): 1 set = 1,200 IDR

Step 2: Calculate Costs Based on the Standard Formula

Now, enter the cost per gram/ml into your standard recipe.

After calculating all raw material costs, you arrive at a cost of goods sold (COGS) of Rp 8,400 per glass. Many people stop at this stage and immediately set the selling price. However, there is one important element that is often overlooked—and this is where many F&B businesses lose profit without realizing it.

Step 3: Don’t Forget! Cost of Goods Sold Isn’t the Only Expense

COGS only accounts for the cost of raw materials, but to run an F&B business, you don’t just pay for ingredients—you also pay for:

• Barista / Employee Salary
• Electricity for ice machines, refrigerators, and food sealers
• Rent a space
• Plastic, tissues, laundry detergent
• Other daily operating expenses

All of this is referred to as OPEX (Operational Expenditure) or operating expenses. The biggest mistake business owners make is calculating the selling price based solely on COGS without factoring in OPEX. If OPEX isn’t factored in, you might think you’re “making a profit,” when in reality your business is only generating cash flow, not profit.

Total OPEX in this example is Rp 10,000,000 per month. Now , calculate the OPEX per glass based on estimated sales. For example, the sales target is 3,000 glasses per month.

OPEX per glass = Total OPEX / number of glasses per month

OPEX per glass = 10,000,000 IDR / 3,000 glasses = 3,300 IDR per glass

Once you know the full cost per glass, you can then calculate the ideal selling price. In the F&B industry, the general rule is:

The ideal cost of goods sold (COGS) should be between 30% and 40% of the selling price.

If your food cost target is 30%, then:

• Selling Price (before VAT) = Cost of Goods Sold / 0.35
• Selling Price (before VAT) = 11,700 IDR / 0.35
• Selling Price = Rp 33,428 ≈ Rp 33,500

With a selling price of Rp 33,500, you’ll have a gross profit of Rp 21,800 to cover operating expenses and generate a net profit. Additionally, keep in mind that the final selling price also depends heavily on the profit margin you want to achieve. Not all outlets or brands use the same margin, as every business has a different pricing and positioning strategy in the market.

Having Trouble with Math? Let the Bobaking Team Help You!

Calculating COGS in detail does require precision. However, this is a crucial step for the success of your F&B business. The accuracy of COGS depends heavily on the consistency of your measurements and the quality of the ingredients you use.

Choosing the right supplier is key. Bobaking’s high-quality ingredients not only ensure a consistently premium taste for your desserts and beverages, but also provide price and supply stability, making it much easier to manage your cost of goods sold.

Good news! Bobaking’s team of experts doesn’t just supply raw materials. We’re your growth partner. We’re here to help you:

• Calculating Cost of Goods Sold (COGS): Our team can help you break down the costs and calculate the COGS for each item on your beverage menu.
• Menu Development (R&D): Want to create a new, unique, and profitable signature menu item? Our R&D team is here to help.
• Free Product Demo: Try and experience firsthand the premium quality of Bobaking’s beverage powders, boba, jelly, and other ingredients right at your location.

Stop running your business based on guesswork. It’s time to take full control of your profits.