10/26/2026
Your Cheapest Ingredient Could Become Your Most Expensive Drink
A lower price on a supplier's invoice does not always mean a lower cost in the cup.
I learned this lesson working with chai. Years ago, I was involved in the liquid chai business. The format was convenient, but it meant moving a lot of water and packaging around the country.
Today, when I talk with cafés about chai concentrates and dry chai powders, I start with yield, not sticker price.
How many finished drinks does the package actually make? How much milk is required? What is the freight cost? How much storage space does it consume? What is thrown away when a container is opened or a drink is made incorrectly?
We modelled a 16-ounce chai latte using one of our dry products at 8 grams per serving. At a $110 wholesale price for a kilogram, that is approximately $0.88 of chai powder per drink, before milk and freight.
In specific liquid-concentrate examples we compared, the concentrate alone worked out to about $1.13 or $1.30 per drink. Freight increased the difference in those particular shipping scenarios.
Those are examples, not universal prices. Every supplier, dilution, recipe and freight route will produce a different result.
That is exactly why operators need to do the math.
The most useful spreadsheet is a simple one: supplier cost Ă· realistic number of finished drinks, plus the other variable costs that actually change with each sale.
Run that calculation on your chai, iced tea, hot chocolate or any beverage where format affects yield.
You might find that your current product is the best choice. Or you might discover you have been comparing packages instead of beverages.
Buy for the cost of the finished drink, not the apparent bargain on the carton.
Are you measuring beverage cost per serving or per package?