I have two similar but slightly different questions here. One is, when I go to a major fast food chain, such as McDonald’s, and buy a Coke, where does my $1.29 (or whatever) go? I assume that McDonald’s and the Coca-Cola company both profit, but who gets what percentage? And how much does it actually cost to manufacture a 16-oz soda, anyway?
My other question is, is the profit scenario any different if I’m buying a Coke from, say, the falafel stand down the street, than if I’m buying it from a mega corporation like McDonald’s? Does the falafel guy get the same profit percentage on the Coke as McDonald’s does? And if not, how come?
Don’t forget the manufacturer of the paper cup, the plastic lid, the straw, and the straw wrapper, not to mention the company that makes the compressed fizzy stuff that goes in the Coke along with the Coke syrup, and the water company that makes the clean water to go in the Coke along with the Coke syrup and the compressed fizzy stuff.
OK, sure. So, like I said, who gets what percentage of the profits, and does it differ if we’re talking about McDonald’s or the falafel guy down the street?
Fountain soada can be one of the most profitable items in a restaurant. The establishment purchases the syrup from a local bottler. This syrup is enclosed in a thick plastic bag which is itself in a box. The common name in the business for this is BIB, or “Bag in a Box”. There is a hose connection on the side of the box. The restraunt hooks up their water supply to it, which mixes the water with the syrup when a soda is drawn from the tap.
By turning up the percentage of water, the restaurant can make even more money.
The price of the BIB depends on what size is purchased, and what quantaty. So it’s hard for me to give numbers.
But if a small bib is $21, and it yields 72 12 ounce cups, and a 12 oz. cup goes for 99 cents, then the profit is $71.28, not including the price of the cups/lids, which is minimal. This is a very general example, and the numbers will vary. I can tell you McDonalds is NOT buying small BIBS. They are buying the large ones, and at a huge quanity. overall, Mcdonalds is the one making the big profit, not the local Coke bottler (though they are making a heap selling sugar water).
Considering that you can buy a 12-ounce can of Coke for as little as $0.25, and McDonalds is selling a 20-ounce cup of Coke for $1.10+, someone is making a lot of money on profits here.
French Fries and cola are the two cheapest items for fast-food chains, IIRC. That’s why they’re given out so often, because the restaurant can afford to.
I am pretty sure that Mcdonalds and every other place just buys the coke syrup from Coca-cola or a distibuter and then marks it up and resells it to you just like most other retail items. Why would there be a special profit sharing arangement for soda?
If you (the restaurant) use a fountain machine, the cost to you is about 10-12 cents. That includes the cost of the syrup, CO2, cup, and machine rental.
I’m basing this costs on bids we’re received to provide breakroom services inside our own company. Now, McDonald’s and Coke are pretty tight, so I would not be surprised to learn that Mickey D’s cost per cup is lower, meaning they get A LOT of profit on sodas. This may explain the proliferation of Super-Size drinks among fast food restaurants; i.e., their cost per cup does not go up significantly with the size, so they can afford to look generous.
When I worked for Subway the cost of the cup was between 8-10 cents and the syrup was around 2 cents for a 20 oz. cup. A medium drink sold for around $1.
The restaurant is the one making the profit. A rather large one. Hence the large amount of places that offer free refills. There is no way that a person is going to consume enough soda to actually affect the profit significantly.
When I worked at Burger King as a teen I remember asking a manager the same thing. It was 10 years ago, but he told me that total cost of a large soda to the store was 7.5 cents including cup, lid, etc. It’s probably a bit higher now, as I did work at BK more than 10 years ago.
I’m going along with the crowd on this. I used to manage an IHOP restaurant, and we had figures for all of that. our cokes (24 oz, IIRC) sold for $1.99, and cost under 10 cents to us - and that includes ingredients, CO[sub]2[/sub] service, machine maintenance, utilities, and rent on the storage space for the BIBs. Considering the number of cokes a restaurant sells in a day, I doubt ten people could drink enough to dent the profits. That’s why refills are often free - To get a refill, you have to buy a coke.
So obviously the restaurant makes the lion’s share of the profits. But when you consider that we purchased anywhere from 5 to 10 BIBs every week, and the number of restaurants in the area doing the same, the Coca-Cola bottler wasn’t hurting for money either.
