Size options in ounces.
Small-16 ounces
Medium-21 ounces
Large-30 ounces
Tried to find the base cost of what McDonalds is paying for a soda before selling it and found a few sources, but general average.
Straws-.015 cents
Lids-1 cent
The cup-Small is 5 cents & large is 7.
The small soda with 16 ounces will cost about 12 cents.
Large will be 22 cents.
Meaning, McDonalds makes $0.88 cents on a small and $0.78 on a large.
Wanted to do this one more time, but a different example with movie theater popcorn.
AMC charges for popcorn.
Small-$6.10
Medium-$7.10
Large-$8.10
Found a medium popcorn cost $0.72 to make.
Couldn’t find weight, but found calories online, so will go with that.
In 2013, calories per serving were…
Small-225 calories
Medium-430
Large-1,030
Using that math.
Small-$0.37
Medium-$0.72
Large-$1.72
Margin wise AMC makes…
Small-$5.73 a cup
Medium-$6.38
Large-$6.38
AMC takes in a slightly lower margin going large, but does up revenue.
So why would they price large like that, if they don’t make more money?
I read somewhere McDonalds charges $3 for large drinks and got that wrong. Likely a result of not having been to a McDonalds in over a decade.
But began researching pricing for larger portion sizes and looked at different size items at different chains, to find none of them make much more going from small to large.
Ultimate reason that I believe it works this way is size doesn’t matter…
Food cost at restaurants average 28%.
But things such as soda, fries, popcorn and more have such low food cost, the margin is 85-95% in most cases.
Meaning food in these cases are just a product of desired portion sizes and don’t actually really matter if it cost them an extra 10 cents, when they already made 10x that.