Coffee roaster COGS: what's really in a 12 oz bag of specialty coffee

A 12 oz bag of specialty coffee at a direct-to-consumer roaster usually retails between $18 and $24. Ask five roasters what it actually costs them to produce and you will get five different answers, most of which will be off by a factor of two because they forgot a category. Here is the full structure, with the ranges we see most often.

The five real cost categories

• Green coffee — raw bean cost plus shipping, landed per lb. Typically 35–55% of COGS.
• Packaging — bag, valve, label, tin-tie, sometimes a box. $0.60–$1.40 per 12 oz bag.
• Labor — time to roast, cool, weigh, bag, and label. Usually the most underestimated line.
• Utilities and amortization — gas for the roaster, electricity, and a fair slice of what the machine cost to buy.
• Shrinkage — the bags that get dropped, torn, or given away as samples. 2–4% is normal.

Why the roast loss number matters here

Green is typically the largest single line, and it is the line most affected by roast loss. A 2% swing in average loss — the difference between a consistent light profile and drifting dark — moves your green cost by a meaningful percentage of the bag. Over a year, for a mid-size roaster, that is usually five figures.

How to price off your COGS, not your vibes

Once you know the real per-bag cost, set a target margin per channel (retail, wholesale, subscription). Back-solve the price from the margin. Round to the nearest dollar. This is the whole game — most roasters price by feel or by matching the shop down the street, and it is where margin quietly disappears.