In the dessert and beverage industry, 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 prices based on guesswork or by following competitors’ prices. However, without a detailed understanding of your Cost of Goods Sold (COGS), you’re essentially running your business blind.

A single drink 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 drink, 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 Drink

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

Let’s break down the main cost components for a single serving of a trendy beverage:

1. Cost of Main Ingredients

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

2. Cost of Toppings and Fillings

• 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 with their drinks.

• Plastic or papercup
• 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 COGS 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 lowest unit price for your materials.

• Jasmine Tea Base (Bobaking): 450 g = 111,000 IDR
  • Cost per gram = Rp 111,000 / 450 g = Rp 247 per gram
  • Brewing Ratio Assumption: 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 milliliter of tea = Rp 2 , 467 / 1,000 ml = Rp 2.467 per ml (We round this to Rp 2.50/ml)

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

• Dreamy Milky Base: 1 kg (1,000 g) = Rp 69,750
  • Cost per gram = Rp 69,750 / 1,000 g = Rp 69.75/gram
  • Recommended 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 = Rp 71 per ml

• Strawberry Fruit Mix (Bobaking): 1 liter / 1.3 kg (1300 g) = Rp 126,500
  • Cost per gram = Rp 126,500 / 1,300 g = Rp 97/g

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

Step 2: Calculate Costs Based on the Standard Recipe

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 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.

The total OPEX in this example is Rp 10,000,000 per month. Now , calculate the OPEX per cup based on the sales estimate. For example, the sales target is 3,000 cups per month.

OPEX per cup = Total OPEX / number of cups per month

OPEX per glass = Rp 10,000,000 / 3,000 glasses = Rp 3,300 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 food cost should be between 30% and 40% of the selling price.

If your food cost target is 30%, then:

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

With a selling price of Rp 33,500, you 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 wish 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 the 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! The team of experts at Bobaking does more than just supply raw materials. We are your growth partner. We’re here to help you:

• Calculating COGS: Our team can help you break down the costs and calculate the COGS for each of your beverage menu items.
• 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.