In this article, you’ll learn:
- Why cold brew drinks need their own pricing strategy
- How cafés can calculate the true cost of a cold brew serve
- What pricing tactics protect margin without deterring customers
Cold brew drinks are dominating menus everywhere, from big names like Starbucks to independent cafés and brands of every size. Their appeal lies as much in their functionality as in the innovative recipes they are evolving into to keep pace with consumer expectations.
Such an opportunity carries huge potential, but only for businesses that price their cold brew products right. It’s a delicate decision that impacts profit margins, shapes brand positioning, and influences consumer demand and behaviour.
Given the significance of this decision, it was only fair to speak with a professional who has actually navigated this successfully. Anastasiia Murashova, Chief Barista at Liberty Café in Lisbon, walks us through how they priced their drinks for maximum margin. Read on for her insights.
Why do cold brew drinks need their own pricing strategy?
Cold brew drinks need their own pricing strategy because their cost structure, input dosage, and perceived value differ from espresso-based drinks.
Hot and cold espresso-based drinks and cold brew drinks share core cost factors, including ingredients, packaging, and labour. However, their overall cost structures differ due to differing brewing methods, input dosages, storage requirements, and perceived value.
The unique flavours extracted during its longer production time partly explain cold brew coffee’s higher perceived value, a factor Anastasiia incorporates into pricing. “We factor in perceived value, since cold brew reads as a premium, crafted drink that guests expect to pay a bit more for,” she explains. Still, like most products, her pricing starts with production cost. “We start from cost, because with the coffee we use, we can’t afford to guess,” she shares.
Whether for espresso-based drinks or cold brew coffee, coffee quality will naturally affect pricing. Higher-grade beans, for instance, require more investment from farm to cup, which in turn influences final consumer costs.
However, input dosage varies between the two coffees, and that’s where pricing starts to shift. “Cold brew uses far more coffee per serve than a hot drink,” Anastasiia explains, “and we work with fermented and co-fermented beans that sit at the higher end on cost.”
Those two factors alone push prices above average, which is why she warns businesses not to blindly follow market rates. “The lesson we learned early was not to price by simply matching what other cafés charge.” Ignoring this can lead to thinner margins, as it did at Liberty Café.
That said, businesses shouldn’t overlook competitor benchmarking. Rather than letting it override other pricing factors, businesses should weigh it after production cost and perceived value, as Anastasiia did. As she puts it, “We sanity-check against other speciality cafés in Lisbon.” Doing this shows you what customers in your area are willing to pay.
Doing this too late was a mistake she made herself. “Once we costed a serve honestly, we saw we were under-charging and corrected it,” she shares.
Other factors, such as refrigeration and dispensing equipment, which hot coffees don’t require, further explain why cold brew drinks’ pricing deserves its own strategy.
How should cafés calculate the true cost of cold brew drinks?
Calculating the true cost of cold brew drinks means accounting for coffee cost, other ingredients, equipment amortisation, wastage, energy use, overheads, packaging, and labour.
Calculating the true cost of a cold brew serve takes more than tallying ingredients, perceived value, and market benchmarking. A truly accurate cold brew price accounts for production efficiency and equipment amortisation. It must also include wastage, energy use, overheads, packaging, and labour.
For Anastasiia, it all starts with the biggest expense. “We build it up from the coffee first, because that’s by far our biggest driver,” she explains. “We’re typically working with beans in the €40–45/kg range.”
Wholesale prices for speciality-grade coffee beans are generally higher than those for commodity-grade or mid-range blends. Accurately accounting for this cost is essential to price cold brew drinks correctly. “Because we build it on premium beans, pricing it correctly is something we pay real attention to,” she emphasises.
The same applies to the rest of the ingredients, including water for classic cold brew, and additions such as milk, syrups, and flavourings for more innovative recipes.
Your cold brew equipment will play just as big a role in final pricing. Higher yield efficiency means a lower cost per serving. For instance, in independent comparisons with traditional systems, modern equipment like the Baby Hardtank and Hardtank 20 brewed 80.1% more coffee volume using the same inputs.
Narrowed down to cost per serving, this means businesses with more efficient equipment have a choice. They can either reduce the price per cup to stay competitive or maintain pricing and grow margins.
But that decision should come after businesses properly account for equipment amortisation. This means spreading the equipment’s cost, including maintenance, over its useful life or repayment period, then incorporating that per-period cost into cold brew drink pricing.
As already mentioned, businesses should also factor in labour costs and the product’s perceived value. Wastage, packaging expenses, and overheads – including rent, utilities, and insurance – also need to be factored in.
What pricing tactics protect margin on cold brew drinks without deterring customers?
Pricing tactics that protect margin on cold brew drinks include raising prices, adjusting serving sizes, premiumising signature drinks, and bundling.
Many factors may influence consumer beverage choices, but pricing still weighs heavily on purchase decisions. In fact, there’s a long list of factors driving many consumers to be more price-conscious than ever.
With that in mind, cold brew businesses benefit from first understanding how much consumers are willing to spend, especially on classics, as Anastasiia points out. “Plain black cold brew is more price-sensitive, since people compare it in their heads to a regular iced coffee.”
From here, find out what factors would make them willing to spend more on cold brew drinks. Craft and consistency are part of that list, according to her. “When we’ve raised prices, doing it gradually and keeping the quality visibly high was what mattered,” she explains, “guests rarely push back on a small increase if the drink still feels crafted and consistent.”
Your drink size strategy could also work in your favour. You can scale down bottle, can, or multipack sizes to levels that are more affordable for customers. This avoids lowering prices and eating into your margins.
That said, cold brew has a unique flavour profile and specific wellness benefits that justify premiumisation. “The drinks that carry premium pricing best for us are the signature cold brews,” Anastasiia shares, “versions with a milk/oat build, and especially anything showcasing a distinctive fermented or co-fermented lot.”
Higher-grade or limited-edition coffees can create special cold brew drinks, and as a business, you can price them based on their perceived or estimated value. “Guests read those as a treat rather than an everyday drink,” Anastasiia explains, describing why consumers pay more for them.
Lastly, bundling is another pricing tactic worth considering. This means grouping multiple products and selling them as a single package, usually at a lower price than buying separately.
Given how much it affects operations and pricing, it’s important to get the equipment right first. Hardtank’s cold brethem w equipment uses patented rapid-extraction technology to brew cold brew in under an hour. Combined with the Hardtap dispensing system, it can improve production efficiency, reduce labour requirements, and support more consistent service.
To learn more about how our commercial cold brew machines can transform your business, visit our website or contact us directly.
Cold brew drinks pricing: Key takeaways
- Cold brew drinks need their own pricing strategy, since their cost structure, input dosage, and perceived value differ from espresso-based drinks.
- Calculating a truly accurate cold brew serve price means accounting for coffee cost, equipment amortisation, wastage, energy, overheads, and labour, not just ingredients.
- Gradual price increases, smart sizing, premiumisation, and bundling help protect margin on cold brew drinks without deterring price-sensitive customers.
Looking to price your cold brew drinks for maximum margin? Explore Hardtank’s cold brew equipment, or contact the team to get started.
Cold brew drinks pricing: FAQ
Why do cold brew drinks need their own pricing strategy?
Cold brew drinks have different cost structures, input dosages, shelf-life needs, and perceived value compared to espresso-based drinks, so pricing them the same way risks thinner margins.
What costs should cafés include when pricing cold brew drinks?
Cafés should account for the cost of coffee, other ingredients, equipment depreciation, waste, energy use, overheads, packaging, and labour, not just the price of the coffee itself.
How can businesses raise cold brew drinks prices without losing customers?
Raising prices gradually while keeping quality visibly high, adjusting serving sizes, and premiumising signature drinks all help protect margin without deterring price-sensitive customers.
Want to learn more about our cold brew systems?
- See the numbers: Read our ROI breakdown
- Explore the equipment: Why Hardtank
- Speak to the team: Contact Hardtank here
