Pricing the croissant: a margin walkthrough you can copy in 12 minutes.

Most café menus are priced by feel. The owner walks down the street, sees what the neighbours charge, and matches them within fifty cents. Sometimes that's fine. Mostly it isn't — and the difference shows up six months later as a quiet 4-point margin drift the accountant flags in May. This piece walks through the four-step pricing exercise we run with new café customers, using a croissant as the worked example.

Why most menu pricing is wrong

Two failure modes. Either the owner anchors on competitor pricing without knowing their own cost (cheap mode — slow bleed), or they multiply COGS by some round number like 3× without thinking about labour and rent (industrial mode — overshoots and customers grumble). Neither is wrong on purpose. Both come from not knowing what each item actually costs to put on a plate.

The four-step exercise below takes about twelve minutes per item. Run it once for your top three sellers and you'll know more about your menu than 80% of the cafés on your street.

Step 1 — Ingredient COGS, per unit

For a sourdough croissant: bag of flour (€1,80/kg → €0,12 per croissant at 67g of dough), block of European butter (€7,40/kg → €0,21 at 28g), one egg (€0,32 split across three croissants → €0,11), sugar/salt/yeast (€0,02), and the paper sleeve (€0,03). Total ingredient COGS: €0,49 per croissant.

Step 2 — Labour minutes × hourly rate

A croissant is a labour-heavy product. From dough mix to lamination to overnight rest to morning bake, you're looking at roughly 14 minutes of skilled baker time per croissant (across a 60-croissant batch, that's 14 hours total / 60 = 14 minutes each). At a baker's gross hourly rate of €18 (Berlin), that's €4,20 per croissant in labour.

This is where most owners flinch. Labour is the dominant cost on a hand-laminated pastry. If you skip it, you're pricing the croissant as if you're donating your time. (Sometimes you are. That's fine — but call it what it is.)

Step 3 — Overhead allocation

Today's slice of rent, electricity, insurance, the oven loan — pro-rated to one croissant by share of revenue. For a 60-croissant batch that sells out in a morning alongside €600 of other revenue, the croissant line is roughly 36% of the day. Divide today's overhead (€220 typical for a Berlin micro-bakery) by 36% and you get €79; divide that across 60 croissants and you have €1,32 per croissant in overhead.

This is the step nouz does automatically once you set up fixed costs. You don't have to do it by hand — the daily slice gets pro-rated into EBIT in the background.

Step 4 — Target margin and shelf price

Sum the three costs: €0,49 ingredients + €4,20 labour + €1,32 overhead = €6,01 break-even cost. Now decide your target EBIT margin. A common bakery target is 15-25% above break-even. At 20% margin, shelf price is €6,01 × 1,25 = €7,51.

Bake that into your menu and round to the nearest natural-feeling number (€7,50). If the local market won't bear €7,50 for a croissant, you have three options: cut labour (smaller batch, faster shaping), cut overhead (smaller premises), or cut margin target (operate at 10% instead of 20%). Each has consequences. nouz's job is to make those consequences visible before you pick.

I'd been pricing my sourdough croissant at €3,40 for three years. The maths said it should be €3,60. I changed the chalkboard the next morning. By month-end the line was 7 percentage points more profitable and not a single regular said a word about the twenty cents.

The Tuesday check

Once you've set the price, the only thing left is to watch margin weekly. The product card in nouz shows per-SKU EBIT after all costs. If you see margin drift more than 2 points in a week, something moved — usually a supplier price. Catch it on a Tuesday, not in May.

For a longer companion piece on margin drift, read how to spot margin drift early. For the daily P&L routine that surfaces it, see the 60-second daily routine.

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