Financial Model: Coffee Brewing Methods

In recognition of National Coffee Day, I’ve put together a simple financial model to compare the cost of coffee brewing methods. While most holiday backers seem to be trying to get you to spend more on coffee, I’m here to help you spend less! By inputting basic details on your preferences and habits, the model will help you determine the most cost effective brewing method.

Financial Model File

This financial model does not require macros to be enabled.

How it Works

The model analyzes four methods of obtaining/brewing coffee: purchased at a coffee shop, coffee press brew, drip brew, and single serve brew. The model requires basic information about cost and consumption preferences for input in the white cells. Cost preferences are broken out between fixed and variable costs.

Financial model showing coffee brewing methods.

Coffee Shop

Cost is determined on a basis of per ounce of brewed coffee. The form asks for an estimate cost for a cup of coffee, as well as a typical size in ounces. For example, if your typical coffee is $2.50 for a 16oz cup, that comes out to about $0.156 per ounce. If you drink 3 cups in a day (8 oz per cup), you have 3 x 8 x $0.156 = $3.75 per day.

Coffee Press

Coffee farmer
The cost effectiveness of growing your own coffee plant is not within the scope of this financial model.

Cost is determined on a basis of per ounce of coffee beans for variable cost, and the cost of a coffee press for fixed cost. Cost of coffee beans is determined through the cost of 1 pound of coffee beans, with the assumption that 1 pound of coffee beans will make 48 cups of coffee. For example, if the 1lb of coffee beans cost $12, the cost per cup will be about $0.25. If you drink 3 cups in a day, take 3 x $0.25 = $0.75 per day. The cost of the coffee press is applied to the first day of the model.

Drip Coffee

Coffee beans out to dry.
Coffee beans out to dry.

Cost is determined on a basis of per ounce of coffee beans and cost of daily coffee filters for variable cost. The cost of a drip coffee maker is included as a fixed cost. If 2 pound of coffee beans costs $12, the cost per cup will be about $0.25. Assuming a box of 100 coffee filters is $15, and you use two per day, the daily cost per cup increases by $0.30. Take (3 x $0.25) + $0.30) = $1.05 per day. The cost of the drip coffee brewer is applied to the first day of the model.

Single Cup

Cost is determined on a basis of per cup used for variable cost, and the cost of the coffee maker for fixed cost. Assuming each single serve cup yields 1 cup of coffee, the variable cost can be calculated by knowing the cost per box and number of units. If a $12 box of single serve cups contains 24 units, each cup costs $0.54. Take 3 x $0.54 = $1.63 per day. The cost of the single serve coffee maker is applied to the first day of the model.

Assumption Flaws, Weaknesses, and Footnotes

  • Assumes same amount consumed each day.
  • Assumes flat cost and no change and preference throughout year.
  • Assumes fixed unit of coffee filters used every day.
  • Assumes coffee shop prices are fixed at a per ounce basis.

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