This is one of those questions that every café owner should know the answer to.
Not approximately.
Actually know.
Because a drink that sells for £4.00 or £4.50 can look extremely profitable until you start adding everything together.
The chai itself is only one part of the cost.
You’ve also got:
Chai concentrate
Milk
Cup
Lid
Labour
VAT where applicable
Wastage
The first calculation I normally make is the concentrate cost.
Let’s use a simple example.
Imagine a one-litre bottle of chai costs £13.50 and you use 40ml per drink.
That gives you roughly 25 servings.
So your chai cost works out at:
£13.50 ÷ 25 = 54p per drink.
Then add the milk.
Depending on what you’re buying and the size of the drink, let’s assume somewhere around 25p–40p.
That puts your basic liquid ingredients somewhere around:
80p–95p per drink.
If it’s takeaway, add the cup and lid.
Perhaps another 15p–25p.
So you could easily be at around £1.00–£1.20 in direct ingredients and packaging before you even start thinking about labour and overheads.
If that drink is selling for £4.25, there is clearly room for a healthy gross margin.
But here’s the important bit.
Do the calculation using your actual recipe.
I’ve seen cafés choose a cheaper chai concentrate only to discover they need considerably more of it to get enough flavour through the milk.
Suddenly, the supposedly cheaper bottle isn’t cheaper at all.
This is why I always think cost per serve is far more useful than cost per bottle.
The other thing worth remembering is that customers don’t buy purely on raw ingredient cost.
A chai latte that tastes brilliant can become one of those drinks people specifically come back for.
That has real value.
And because chai isn’t quite as easy for customers to recreate at home as a basic cup of tea, there is often less resistance to paying a premium café price for it.
For us, the goal when developing Jeeves & Jericho Chai Fusion has always been to balance flavour with commercial reality.
It needs to taste properly spiced.
It needs to be quick and easy for a barista to make.
And just as importantly, the numbers need to work for the café.
If you’re considering adding chai to your menu, I’d recommend creating a very simple costing sheet.
Write down:
Bottle cost
Serving size
Number of servings per bottle
Chai cost per drink
Milk cost
Packaging cost
Selling price
Gross profit per drink
It takes five minutes.
And it gives you a far clearer picture than simply asking:
“What’s your wholesale price per bottle?”