This question comes courtesy of Morning Brew (yes, there's a bit of irony there!). They have a daily email blast which is a great way to start the day. I also discovered while researching this QoD that 40% of teenagers drink coffee on a regular basis. 

Answer: 

• Shop costs/rent (35%)
• Staff costs (25%)
• Cups/Napkins (7%)
• Milk (4%)
• Coffee (4%)

Questions:

• Does it surprise you that the basic coffee you purchase from Starbucks for $2.50 has about $0.10 worth of coffee in it? 
• Why do you think the appeal to purchase coffee at a coffee shop is so strong when one can make it at home for a fraction of the cost? 
• Can you think of other items where the cost of what you are actually purchasing is a fraction of the price that you are paying for it?

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (from FT.com; sub. required):

But in an everyday £2.50 brew, the coffee itself accounts for about 4 per cent, or around 10p — rent, labour and tax taking a much larger portion of the cost. “The cost of coffee is really marginal [for the retailer],” says Jeffrey Young, chief executive of consultants Allegra Strategies. “Even if your coffee beans go down 30 per cent, the cost of cups and workers has gone up, the rent has probably gone up and everything else has gone up.”

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Want to get financial writers fired up? Bring up the question "what if you saved that latte?" Rather than engage in that debate, we created an activity that makes for an interesting thought experiment, CALCULATE: What If You Invested That Latte? 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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