How to Price Your Roasted Coffee

Many new roasters price by guesswork, look at a competitor, pick a number, and hope. That is how businesses quietly lose money. Pricing coffee properly means knowing every cost that goes into a bag, then adding a margin you can actually live on. The trickiest part is a cost beginners forget entirely.

The cost everyone forgets: roast loss

When you roast coffee, it loses weight. Moisture evaporates and the bean sheds mass, so green coffee shrinks by roughly 15 to 18 percent during roasting. That means one kilogram of green does not make one kilogram of roasted. It makes around 820 to 850 grams. If you price as if a kilo of green becomes a kilo of roasted, you are underpricing every bag from the start. Always calculate your green cost against the roasted weight you actually sell.

Add up every cost

• Green coffee, adjusted for roast loss as above.
• Labor: the time to roast, cool, pack and label, valued at a real wage.
• Energy: gas or electricity for the roaster, which is not trivial.
• Packaging: bag, valve, label, and any nitrogen flushing.
• Overhead: rent, equipment depreciation, insurance, marketing, spread across your volume.

Sum these to get your true cost per bag. Only then do you add margin.

A simple worked example

Say green costs 8 currency units per kilogram. With 17 percent roast loss, a kilo of green yields about 830 grams roasted, so your green cost per roasted kilo is about 9.6 units. Add, per 250 gram bag, your share of labor, energy, packaging and overhead, perhaps another 1.5 to 2.5 units. Your cost might land around 4 to 4.5 units per bag. Now apply a margin that fits your channel.

Wholesale versus retail margins

Retail bags sold direct carry a higher margin because you do all the selling. Wholesale, where a cafe or shop resells your coffee, sells at a lower price per bag because they take their own margin on top. Many roasters aim for a healthy markup at retail and a thinner but volume-driven price for wholesale. Whatever you choose, both must clear your true cost with room left over.

Do not race to the bottom

Underpricing feels like a way to win customers, but it starves the business and signals low quality. If your coffee is fresh, well roasted and well sourced, price it to reflect that and explain the value. Customers who care about coffee will pay for quality, and the ones who only want the cheapest were never your market. Price for a business that survives, not just for the first sale.