chapotraphouse

Price wise I'm going to standardise on Coke Zero, because I think the UK and some US states have a sugar tax and I want to take that out of the equation. I'm also going by uber prices, because I'm not in either location. If I was going to do this seriously I'd look at in-store prices to avoid the Uber markup as well.

If we go by the menu prices on uber for McDonalds Princes St in Edinborough, the first one to show up in my web search, a small is L1.49. A medium is L1.99, and a large is L2.39.

By contrast, at McDonalds Uleta Miami; A small is $2.39, A medium is $2.59 and a large is $2.79.

So a US large is a better deal by ratio; 2x the coke for 1.17x the price (US) vs. 2x the coke for 1.6x the price (UK). What's interesting is the medium. A UK medium is 1.6x the coke for 1.3x the price. US medium is 1.3x the coke for 1.08x the price.

Interesting side note, the UK store lists a small as the default option; medium and large incur an extra charge. Whereas the USA store lists a medium as the default, with a small having a discount. I have no idea if the demographics in these places are comparable, they're just literally the first search result I found. This also assumes the cup is 100% full, which it isn't. More on that later.

So anyway.

In the UK, you're paying:

L1.49 for 250mL, 1.99 for 400mL, or 2.39 for 500ml. That's 0.59p / mL for a small, 0.49p / mL for a medium, and 0.47p / mL for a large.

in the US:

$2.39 for 473mL, $2.59 for 621mL, $2.79 for 946mL. That's 0.5c / mL for a small, 0.41c / mL for a medium, and 0.29c / mL for a large.

By ratio or unit price, the large universally looks like the best deal. By a much bigger margin in the US than the UK, but it's still the clear winner. So I'd guess this is the one they -want- you to buy. So, what's their margin?

It's surprisingly difficult to find postmix suppliers that actually list prices directly on their website. One UK supplier lists Coke Zero at L66.99 / 7L delivered. It's also not easy to find the ratio for Coke Zero Postmix, but 7L of Original coke apparently makes 45L of finished product so we'll assume it's the same. McDonalds probably doesn't have to go through a supplier, and likely gets a hefty volume discount. But I'm not privvy to that information, so let's just roll with what I can find.

So, at L66.99 / 45L, that's just under 0.15p / mL. Which is about 314% markup per mL for a large, 326% for a medium, and 393% for a small.

I couldn't find a bulk US supplier that didn't want me to create an account to see their prices. But a Canadian supplier lists 10L Coke Zero postmix at $133.09CA ($92.45USD via xe.com). Assuming the ratio is the same (7L:45L = ~6.4x), 10L gives 64L finished product. Which gives us about 0.14c / mL. That's 207% mer mL markup for a large, 273% for a medium, and 357% for a small.

So the US margins seem to be a lot lower. Which is fascinating. Unless they're getting the same or better deal from Coca Cola USA. Their overheads in terms of staff wages will be a lot lower too.

This is where ice comes in. According to Food Theory's scientifical(tm) research, which is the closest thing I can find to actual data, a McD's small actually contains 11.6oz (343mL) or 72.5% full, a medium 16.6oz (491mL) or 79% full, and a large 22.2oz (657mL) or 69% full, of soda.

The price they pay per mL stays the same, but suddenly instead of making $2.39 - ($0.0014 * 473) = $1.727 per small, $1.720 per medium and $1.465 per large, they're making $1.909, $1.902, and $1.870, respectively. An entire three cents less profit between a small and a large. What the fuck.

On the UK side, if we assume the fill percentage stays the same, a UK small is actually 181.25mL, a medium is 316mL, and a large is 345mL. So instead of L1.49 - (L0.0015 * 250) = L1.115 profit for a small, L1.39 for a medium, and L1.64 for a large, they're making L1.21, L1.51, and L1.87, respectively. This makes a lot more sense from a business point of view. They push you towards the large because it looks like a better deal, but actually makes them more profit.

So what the fuck is going on in the states? This is where I have to speculate a bit because the math makes no ghoddamn sense. They make slightly less off a large than a small, but still push you towards it. My best guess is it's purely about consumer perception and economies of scale. They'd rather make slightly less per unit, but have you think you got a good deal and come back for more. Two sales at $1.87 profit is better than one at $1.909.