Cost, dosing & menu maths
How to Price a Matcha Latte on Your Menu
A menu price starts from the full cost of the drink, then adds either a markup on cost or a target share of the price. Cost-plus asks "how much do I add to my cost?"; target margin asks "what share of the price do I want to keep?" Both work, but they give different prices for the same percentage, so pick one and use it consistently. This article sets out the algebra for both and a worksheet you fill in with your own costs and your own target. It does not suggest market prices; your price depends on your costs and your guests.
Before you start: one cost number
You need the full cost per drink, excl. VAT. Build it line by line with the full matcha latte cost template: matcha, milk, sweetener, cup and lid, labour, waste.
Only the matcha line can be worked out here. For Ceremonial Barista Matcha at €195.00 per kg excl. VAT (at the time of writing, November 2026; check the product page for the current price) and an example dose of 2 g:
- Before waste: €195.00 × 2 ÷ 1,000 = €0.39
- With an example 8% loss: €195.00 ÷ (920 ÷ 2) = €195.00 ÷ 460 = €0.42
Replace the dose and loss with your own. Every other line comes from your own invoices and time measurements. Call the total C (full cost per drink, excl. VAT).
Method 1: cost-plus
You choose a markup percentage, K, and add it on top of cost.
Price excl. VAT = C × (1 + K)
Your markup is a business decision. Write it as a decimal: a markup of K% becomes K ÷ 100.
Strength: quick and easy to explain to staff. Weakness: a markup on cost does not tell you directly what share of the price you keep.
Method 2: target margin
You choose the share of the price, excl. VAT, that you want left after the cost of the drink. Call it M (as a decimal).
Margin = (Price excl. VAT − C) ÷ Price excl. VAT
Rearranged to find the price:
Price excl. VAT = C ÷ (1 − M)
Strength: you set the share you keep, which makes it easier to compare drinks on the menu. Weakness: the price climbs quickly as M gets close to 1, so very high targets can produce prices your guests will not accept.
Markup and margin are not the same number
The same percentage gives two different prices. You can convert between them:
- Margin = K ÷ (1 + K)
- Markup = M ÷ (1 − M)
Pure arithmetic, not a recommended level: a markup of 100% (K = 1) is a margin of 1 ÷ 2 = 50%; a margin of 50% (M = 0.5) needs a markup of 0.5 ÷ 0.5 = 100%. Mixing the two terms in a team discussion can easily lead to pricing errors.
Adding VAT
Menu prices to consumers usually include VAT. Use the rate that applies to your drink in your country, which can differ for eat-in and takeaway in some countries; check with your accountant or tax authority.
Menu price incl. VAT = Price excl. VAT × (1 + VAT rate)
And in reverse, to check an existing menu price:
Price excl. VAT = Menu price incl. VAT ÷ (1 + VAT rate)
Never calculate margin on a price that includes VAT. The VAT is not yours.
Worked example from your own inputs
Fill in your values and follow the steps in order.
| Step | Input or formula | Your value |
|---|---|---|
| 1 | Matcha cost per drink (from above or your own) | €___ |
| 2 | All other costs per drink (from the C04 template) | €___ |
| 3 | C = step 1 + step 2 | €___ |
| 4a | Cost-plus: your markup K (decimal) | ___ |
| 5a | Price excl. VAT = C × (1 + K) | €___ |
| 4b | Target margin: your margin M (decimal) | ___ |
| 5b | Price excl. VAT = C ÷ (1 − M) | €___ |
| 6 | Your VAT rate (decimal) | ___ |
| 7 | Menu price incl. VAT = step 5a or 5b × (1 + step 6) | €___ |
| 8 | Round to your menu's price steps | €___ |
After rounding, check it backwards: take the rounded menu price, remove VAT with the reverse formula, and recalculate your actual margin. Rounding down can cost more margin than you expect.
Check what share the matcha takes
Once you have a price, the matcha share is a useful sense check:
Matcha share of price = matcha cost per drink ÷ price excl. VAT
For example, with the €0.42 matcha line above and your price P excl. VAT, the share is €0.42 ÷ P. It tells you how much a change in matcha price or dose moves your margin compared with milk or labour.
Pricing across sizes and products
- Sizes. Cost each size separately, because dose and milk both rise. Matcha cost by drink size has a scenario matrix for the matcha line.
- Products. If you also offer a pure serve with Ceremonial Matcha, its matcha line is higher. Barista vs Ceremonial cost per drink compares them.
- The whole menu. How the matcha drinks sit next to each other and next to coffee is covered in building a matcha menu.
Next step
Complete the cost template and the worksheet for your main matcha latte, then do the same for each size. If you have not chosen a matcha yet, test a 10 g sample of Ceremonial Barista Matcha in your recipe before you set the price.