Pricing the 15% roast loss properly

Green beans cost 50 per kilo, roasted sells at 160. Many people take the margin as 160 − 50 = 110 per kilo.

That is wrong, and expensively so.

Where the error is

Coffee loses weight in the roaster: roughly 12–14% for a light roast, 15–17% medium, 18–20% dark, depending on origin, moisture and development.

So one kilo of roasted coffee needs more than one kilo of green.

At 15% loss: 1 ÷ (1 − 0.15) = 1.176 kg of green per kg roasted.

Green cost per roasted kilo is 50 × 1.176 = 58.8, not 50.

Real gross margin is 160 − 58.8 = 101.2 per kilo, not 110. At 500 kg a month that is 4,400 of margin you did not have.

The full cost line

• Green: 50 × 1.176 = 58.8
• Gas: 1.85 m³/h on a 6 kg, about 0.9 hours for four batches ≈ 5–6 per day, ~0.4 per kg
• Electricity: 1.5 kW total, ~0.1 per kg
• Labour: one roaster at 6,000 a month producing 300 kg = 20 per kg — the biggest line people forget
• Packaging: bag, valve, label, 2–5 per kg
• Losses: samples, test roasts, returns, 3–5%

All in, roughly 85–95 per kilo of roasted coffee at this green price. Selling at 160 leaves 65–75 per kilo, a 40–47% gross margin.

That is the number to use when you price contract roasting and when you work out payback.

A counter-intuitive consequence

Dark roasts cost more than light ones, and not only because of gas. At 20% loss you need 1.25 kg of green per roasted kilo — 62.5 versus 57.4 at 12% loss. Same selling price, lower margin.