Coffee pricing looks easy until you account for milk ounces, cup costs, and VAT. That is where most UK cafe margins leak.
This guide gives you a UK-ready pricing framework for espresso drinks, flat whites, and filter coffee.
Quick Summary
- Lock espresso dose and milk ounce standards
- Treat cups, lids, sleeves, and stirrers as real ingredients
- Set targets on net (ex-VAT) revenue, then add VAT to menu price
- Review prices monthly if dairy or coffee costs move
The Simple Pricing Formula (UK)
Drink cost = Coffee + Milk + Add-ons + Packaging + Waste
Food cost % = Drink cost ÷ Net (ex-VAT) price
Menu price = Net price × (1 + VAT)If your menu price is stable while costs rise, your margin quietly shrinks.
Portion Standards That Actually Protect Margin
- Espresso dose: pick one standard (for example 18-20g) and train to it
- Flat white milk: 4-5 oz steamed milk keeps costs tight
- Latte milk: 8-10 oz for 12-oz drinks, 12-14 oz for 16-oz drinks
- Iced drinks: cost separately (ice changes volume, not labour or packaging)
Small over-pours add up fast. A 0.5 oz milk drift on 150 drinks/day adds real cost in a month.
UK Cost Pressure Signal (Why Monthly Reviews Matter)
The ONS reported restaurants and hotels inflation at 3.8% year-on-year in October 2025. Even if your ingredients are stable this week, the broader category has been trending upward, which is a warning sign for slow repricing.
Source: ONS Consumer price inflation, UK: October 2025
VAT Reality Check (Eat-In vs Takeaway)
VAT treatment can differ between eat-in and takeaway, and between hot and cold items. Use HMRC guidance for the exact classification of your menu before setting price targets.
Source: HMRC VAT Notice 709/1: Catering, takeaway food
Quick Example: Latte (Illustrative)
- Espresso: £0.28
- Milk: £0.42
- Cup + lid + sleeve: £0.20
- Syrup: £0.08
Total drink cost: £0.98
Target food cost: 25% (net)
Net price = £0.98 ÷ 0.25 = £3.92
Menu price (VAT added) ≈ £4.70Round to your menu ladder (e.g., £4.60 or £4.80) and keep a consistent gap between sizes.
A Pricing Ladder That Feels Natural
- Espresso / Americano: lowest base
- Flat white: +£0.30-£0.50 premium
- Latte / flavoured: add syrup + £0.40-£0.60
- Iced: price as its own recipe (packaging + ice)
The ladder makes staff upsells easy and protects margin without feeling arbitrary to customers.
Monthly Coffee Menu Checklist
- Re-cost top 5 drinks with current milk prices
- Check cup, lid, and sleeve costs (packaging inflation is real)
- Update recipe standards if portions drifted
- Review dine-in vs takeaway mix and VAT impact
- Test a small price move on top 3 sellers
Do This Now
- Weigh your espresso dose on a scale and lock it in (18-20g is standard)
- Measure milk ounces for each cup size—no eyeballing
- Add cup, lid, and sleeve costs to your recipe (check your supplier invoice)
- Calculate your current food cost % on your top 3 drinks using net (ex-VAT) price
- Set a monthly reprice reminder for when milk or coffee costs move
Related Guides
- UK Menu Pricing Calculator
- UK Menu Price Review Checklist
- Cafe Menu Cost Guide
- US Coffee Cart Cost Guide
If you want coffee prices that update as milk, beans, and packaging move, KitchenCost recalculates drink costs automatically.