How Much Does it Cost to Add Specialty Coffee to Your Bakery?December 24, 2022 (Published: July 31, 2019)
Want a way to nearly double the profits of your bakery? Turn it into a bakery café by adding specialty coffee drinks to the menu!
According to industry statistics, at least 60 percent of Americans are coffee drinkers. Tickle their taste buds – and boost your bottom line – with an upgrade over the drip coffee most bakeries serve.
Don’t your cookies, cakes, pastries and other fresh-baked goodies deserve to be served with award-winning specialty coffee drinks? Our experience shows that espresso-based drinks like cappuccinos, café mochas and cold-brew coffee increase sales of both coffee drinks and baked goods.
Specialty coffee drinkers are incredibly loyal once they find their favorite java. Why not give them a reason to visit your bakery several times a week – or even daily?
How Much More Can You Make by Adding Specialty Coffee?
On average, the price of espresso-based drinks ranges from double to triple that of drip coffee. Each pound of coffee can yield about 24, twelve-ounce cups of drip coffee or 50 shots of espresso. Specialty-grade gourmet coffee costs around $8 per pound at wholesale.
If you sell 24 cups of drip coffee at $1.85 per cup, you’ll bring in $44.40, for a gross profit of $36.40.
If you sell 50 espresso-based drinks at an average of $4.15 per drink, you’ll generate $207.50. What business owner wouldn’t want to generate almost 500 percent more income from one product?
The espresso-based drinks do have additional labor and ingredient costs as outlined below, but you can easily double or triple profits from each bag of coffee. And that doesn’t take into account the extra customers who will return several times a week for their favorite café latte or frozen blended drink – and a sweet treat to go with it.
How Much Does It Cost to Add Specialty Coffee to Your Bakery?
At Crimson Cup, we don’t believe in cookie-cutter solutions. Our coffee consulting services are always based on a frank and honest appraisal of your existing business, resources and goals.
Your costs will vary based on your retail space, location and specific circumstances. That said, typical expenses include:
- Coffee Shop Equipment, including a top-of-the-line espresso machine, espresso and coffee grinders, blenders, gourmet drip coffee brewers, refrigerator, etc.
- Buildout costs to add counter space for the espresso machine and other coffee equipment, if these will not fit into your existing layout. These should include designer/architect fees, building permits, cost of materials and labor, etc.
- Coffee, milk, chocolate, syrups and other drink ingredients.
- Payroll costs for baristas, including wages, benefits, payroll taxes, worker’s compensation and costs of payroll processing. As a rule of thumb, payroll costs should be 35 percent or less of sales.
- Supplies (napkins, stir sticks, straws, etc.) These usually are similar to what you’re already spending to serve drip coffee.
- Interest (if you plan to finance a build-out or purchase of new equipment).
- Advertising to spread the word about your incredible new coffee.
When you add everything up, we’ve seen costs range from as little as $25,000 for a bakery that didn’t require any renovation to as much as $75,000 for one that invested in a dedicated coffee bar and additional seating space.
You’ll find a more detailed explanation of how to calculate projected revenue and expenses plus a comprehensive coffee shop business plan in Seven Steps to Success in the Specialty Coffee Industry, written by Crimson Cup Founder and President Greg Ubert. Hundreds of independent coffee shops and bakery cafés across the USA have used this book as their guide on how to open a coffee shop.
Questions About How to Add Specialty Coffee to your Bakery?
We’re here to help! Give us a call or drop us an email. Then, we’ll chat and see where it leads.
That’s it. No high pressure sales. Just a no-obligation brainstorm about your bakery and how we can help you reach your goals. Call us anytime at 888-800-9224.