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Where Does The Money Go Ric Nicaragua 2009pdf
1. Where Does the
Money Go?
A Look at the Consuming Side Economics of the
Coffee Supply Chain
2. For this Example a
Milled Green Coffee
Fair Trade and
Organic Certified
Sells to an Importer
at $1.50 per pound
3. Importer Adds Costs and Margin
Green Coffee $1.50
Shipping and customs entry .095
Warehouse and logistics .05
Finance and Storage .095
Importer Margin .15
Total Importer Add .39
Cost to Roaster At Warehouse $1.89
4. Coffee Ships to Roaster
Ex Warehouse Coffee Price $1.89
Shipping Cost .12
Shrink Loss of 18% .44
Roasted Cost per Pound $2.45
5. Roaster Sells a Pound of Roasted Coffee for
$7.25
Roasted Cost per Pound $2.45
Packaging Cost .39
Direct Labor Cost .55
Transfair Fee .10
Material Cost Total $3.49
6. All Other Operating Expenses for Roaster
Wholesaler
Material Cost Total $3.49
Wages Excluding Direct Labor .94
Sales, General & Administrative (SG&A) 1.68
Interest, Depreciation, Amortization and Lease .38
Total Cost To Roaster One Pound $6.49
7. The Bottom Line
Sales Price from Roaster One Pound $7.25
Total Cost To Roaster One Pound $6.49
Pre-Tax Profit on Sale of One Pound .76
State and Federal Taxes of 35% .27
Total Net Profit per Pound $ .49 (6.7%)
8. Coffee Retailer Buys One Pound of FTO
Coffee for $7.25
• Brews coffee using a ratio of 60 grams of coffee
per liter of water
• One pound yields 7.5 liters of coffee beverage
• Coffee is sold at $1.75 per 475 ml cup
• Pound yields 16 cups or $28.00
9. Retailer Revenue and Cost of Goods
Sale of 16 Cups $28.00
Coffee Cost 7.25
Cups 2.00
Lids .46
Stir Sticks .16
Condiment Cost .56
Gross Profit per Pound $17.57
11. Net Profit Retail Operations
Net Operating Profit $3.71
Depreciation, Interest, Amortization 1.12
State and Federal Taxes .91
Net Profit $1.68
( 6%)
12. Contact the SCAA
330 Golden Shore # 50
Long Beach, CA 90802
562.624.4100
info@scaa.org
www.scaa.org
SCAA on Facebook
SCAA on Twitter
