The inflation rate of lemonade

The lemonade stand. A longstanding symbol of childhood summer entrepreneurship.

In this FRED Blog post, we answer the cornerstone question of every sound lemonade stand business plan: "How much does it cost to produce a glass of lemonade?"

The FRED graph above uses data from the U.S. Bureau of Labor Statistics to calculate the cost of a single glass of lemonade. The white bars represent the cost of the sugar and the yellow bars represent the cost of the lemon juice. The white and yellow bars are stacked to more easily show the total cost. We use tap water, which is so cheap in this recipe that we can ignore it without substantially impacting our calculation.^*

The latest data available at the time of this writing showed that the cost of a glass of lemonade was $0.36 in 2023. Since 1980, when the data were first available, that cost has increased almost threefold. However, the year-over-year inflation rate of this sweet and tart drink has been volatile, given that food item prices themselves are volatile.

Clearly, the cost of the ingredients is only one of the factors that drives how much money one spends at a summer lemonade stand. The cost of labor, overhead, marketing ingenuity, and overall entrepreneurial tactics of the stand owners will account for the rest.

^*The recipe is from MyPlate.gov, the website of the U.S. Department of Agriculture that provides recipes based on the Dietary Guidelines for Americans, 2020-2025.

How the graph was created: Search FRED for and select "Average Price: Lemons (Cost per Pound/453.6 Grams) in U.S. City Average." Next, use the "Edit Line" tab to customize the data by typing the formula (a/15)*2. Next, use the "Add Line" tab to search for and add "Average Price: Sugar, White, All Sizes (Cost per Pound/453.6 Grams) in U.S. City Average." Use the "Edit Line" tab to customize the data by typing the formula (a/12.5). Next, use the "Format" tab to change the graph type to "Bar" and the stacking to "Normal." Last, customize the plot area and bar colors to your liking, stir well, and serve cold.

Suggested by Elizabeth Marmer and Diego Mendez-Carbajo.