What is a typical gross margin for a coffee roaster?

It varies widely by channel and coffee. Calculate your own from cost per kilo and price per kilo; averages from other businesses rarely match your mix.

Is roast loss part of cost of goods?

Yes. You pay for green coffee by weight before roasting and sell roasted coffee, which weighs less. Dividing green cost by (1 minus roast loss) puts it on the right basis.

Gross margin per kilo: the number that runs a roastery

Turnover tells you how busy you are. Gross margin per kilo, by channel and by coffee, tells you which customers and products actually pay the rent.

7 min read Updated 9 October 2026

Gross margin per kilo is your selling price per kilo of roasted coffee minus the cost of goods per kilo. Multiply it by kilos sold and you get the gross profit that must pay every fixed cost. Because a roastery sells the same coffee through several channels at very different prices, a single average hides the decisions that matter.

What goes into cost of goods

Green coffee, landed, divided by (1 minus roast loss) to give green cost per roasted kilo.
Packaging: bag, valve, label, box and void fill for that pack size.
Energy per batch, shared across the batch's output.
Direct labour: roasting, packing and dispatch time per kilo.
Delivery if you deliver or pay for courier on that channel.
Payment fees where they scale with the sale.

Rent, rates, insurance, software and salaried management are fixed costs and sit below gross margin.

Same coffee, three channels

Worked example

Gross margin per kg by channel, worked example for one blend

Wholesale 1 kg, large account£5.50
Wholesale 1 kg, small account with delivery£6.20
Retail 250 g online, after postage subsidy£17.30
Subscription 250 g, after postage£15.80

Illustration with assumed prices and costs. Per kilo, retail looks far better, but each kilo needs four orders, four packs and more customer service.

The point of the example is not which channel wins but that each needs its own number. A large wholesale account at a thin margin can still be your most valuable customer because it fills the roaster every week with little selling cost. A small account a long drive away can lose money once you count delivery.

Margin by coffee

A rare, expensive lot sold at the same bag price as your house blend can make a fraction of the margin. Calculate margin per kilo for each coffee as well as each channel, and decide deliberately which ones are there to make money and which are there to build your reputation.

How to keep the number honest

Monthly margin checks

Use your measured roast loss per coffee and roast level, not a single assumption
Update green cost with each new lot, including freight and duty where they apply
Count packaging at the price you actually pay at your order quantity
Time packing for a typical week and divide by kilos
Review margin per customer quarterly and act on the bottom ten

Using it to decide

With margin per kilo by customer you can set minimum order sizes, delivery charges and the lowest tier you will offer. With margin per coffee you can decide which lots to rebuy. With the total, you can see how many more kilos you need to afford a hire or a second roaster. See when to buy a second roaster.

Where Roastnet helps

Questions roasters ask

What is a typical gross margin for a coffee roaster?: It varies widely by channel and coffee. Calculate your own from cost per kilo and price per kilo; averages from other businesses rarely match your mix.
Is roast loss part of cost of goods?: Yes. You pay for green coffee by weight before roasting and sell roasted coffee, which weighs less. Dividing green cost by (1 minus roast loss) puts it on the right basis.