Cost of roasted specialty beans per lb???

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Permalink Reply by Justin Johnson on November 2, 2009 at 11:28am

John,
I'm finding nice coffees around the price of $2 a pound.
Almost all coffees that you get from brokers is hedged against the c market so price fluctuations will occur according to what the market is at on a particular day. You can go to Alaron.com to find out what commodity grade coffee costs. Brokers will then add a differential to the c based upon many variables like the certifications that the coffee has (organic, FTO...) as well as the quality and availability.

If I can add my 2 cents... roast your own. It'll fill you with an unbelievable sense of pride.

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Permalink Reply by John Dowling on November 2, 2009 at 11:51am

Hi Justin,

Thanks for your reply, that helps me a lot as I really needed that info as well, re green beans that is.

However, I'm sorry but I wasn't clear at all in my original post and have adjusted it. I am trying to find out how much I could expect to pay per lb of roasted beans wholesale so I can weigh up the pros and cons of roasting in house. Thanks again for your help!
I'll just restate that I know that this is going to fluctuate considerably depending on the beans being purchased, but at the same time I gather there is a perceived average price for a decent espresso blend.....thanks again.

Justin Johnson said:

John,
I'm finding nice coffees around the price of $2 a pound. Almost all coffees that you get from brokers is hedged against the c market so price fluctuations will occur according to what the market is at on a particular day. You can go to Alaron.com to find out what commodity grade coffee costs. Brokers will then add a differential to the c based upon many variables like the certifications that the coffee has (organic, FTO...) as well as the quality and availability. If I can add my 2 cents... roast your own. It'll fill you with an unbelievable sense of pride.

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Permalink Reply by greg costello on November 2, 2009 at 11:52am

I think one can ask alot of questions, probably a good idea to think about what your asking for. SOmetimes prices for green can be highly sensitive areas of information but if you feel you have a right to this information crack on and ask.

Justin Johnson's advice is spot on but be aware that high profile coffee's command the price they can get and bear no relationship to c market. Then there are finca brands you cant even get a look in on buying little own throw your weight around on the price you pay.

You want to roast your own. Everyone wants to roast their own so I wont try and talk you out of that regardless of quantity's. But I would look around first.For example if your in Victoria Australia you might find someone who has perfect synergy with yourself and your goals. This might be an opportunity for you to work "with them" once your roasting your own often you are just another competitor.

Explore all relationship opportunity's first........Before running out into the snow on your own in a pair of shorts

p.s. if I was paying $2 per Ib for my favourite coffee's Id be very very happy

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Permalink Reply by John Dowling on November 2, 2009 at 12:28pm

Hey Greg,

You're right, one can ask a lot of questions, I'm guessing about an infinite amount.

As for everyone wanting to roast, isn't that dependent on one's location? While that might be true say in the UK, it doesn't necessarily ring true in say Abilene, Texas. I find a lot of cafe owners to be intimidated (rightly so) by the notion of roasting and would as a result much rather leave it up to the "professionals". This accounts for the multitude (which I'd assume to be the majority) of cafes that choose not to roast their own instead opting to buy their beans roasted by a reputable source.

It goes without saying, you'd be a fool to dive into the any market as a roaster without surveying the landscape, getting to know your locals and deciding whether to work with them, or not. Although I accept it's a competitive market, I don't however see a new roasting company as a threat. Rather it has the potential to raise the bar for all involved in said market, adds healthy competition and has the potential to give consumers better access to quality coffee. All depends on context though innit?

greg costello said:

I think one can ask alot of questions, probably a good idea to think about what your asking for. SOmetimes prices for green can be highly sensitive areas of information but if you feel you have a right to this information crack on and ask.

Justin Johnson's advice is spot on but be aware that high profile coffee's command the price they can get and bear no relationship to c market. Then there are finca brands you cant even get a look in on buying little own throw your weight around on the price you pay.

You want to roast your own. Everyone wants to roast their own so I wont try and talk you out of that regardless of quantity's. But I would look around first.For example if your in Victoria Australia you might find someone who has perfect synergy with yourself and your goals. This might be an opportunity for you to work "with them" once your roasting your own often you are just another competitor.

Explore all relationship opportunity's first........Before running out into the snow on your own in a pair of shorts

p.s. if I was paying $2 per Ib for my favourite coffee's Id be very very happy

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Permalink Reply by Derryl Reid on November 2, 2009 at 1:43pm

Hi John

I am a commercial roaster that roasts "in house" (literally). Started my company a little over two years ago, with all the proper approvals.
We are hoping to open our own cafe in the near future as well.
Start with phoning Green Suppliers & see what your cost would be. Then phone up a few roaster & ask their prices. I know I get those types of phone call and don't mind. They should be fine with giving you a price, just have an idea on your weekly volume 10,20,30lbs per week? Some roasters work on volume discounts.
Then you can work out if you want to roast in-house or buy from a supplier!

My ballpark would be $8-$12/lb roasted in the US market. I am in the Canadian market so there might be a slight difference.

Good luck!

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Permalink Reply by greg costello on November 3, 2009 at 7:57am

Of course you are right about healthy competition. We all know what its like dealing with markets where real competition is non existent.......anyone want to catch a train? Your right also physical location is going to have a massive impact on practicality's. I know for me working with other company's has opened doors I didn't even know existed. Looking fwd to hearing how you get on.

John Dowling said:

Hey Greg,

You're right, one can ask a lot of questions, I'm guessing about an infinite amount.

As for everyone wanting to roast, isn't that dependent on one's location? While that might be true say in the UK, it doesn't necessarily ring true in say Abilene, Texas. I find a lot of cafe owners to be intimidated (rightly so) by the notion of roasting and would as a result much rather leave it up to the "professionals". This accounts for the multitude (which I'd assume to be the majority) of cafes that choose not to roast their own instead opting to buy their beans roasted by a reputable source.

It goes without saying, you'd be a fool to dive into the any market as a roaster without surveying the landscape, getting to know your locals and deciding whether to work with them, or not. Although I accept it's a competitive market, I don't however see a new roasting company as a threat. Rather it has the potential to raise the bar for all involved in said market, adds healthy competition and has the potential to give consumers better access to quality coffee. All depends on context though innit?

greg costello said:

I think one can ask alot of questions, probably a good idea to think about what your asking for. SOmetimes prices for green can be highly sensitive areas of information but if you feel you have a right to this information crack on and ask.

Justin Johnson's advice is spot on but be aware that high profile coffee's command the price they can get and bear no relationship to c market. Then there are finca brands you cant even get a look in on buying little own throw your weight around on the price you pay.

You want to roast your own. Everyone wants to roast their own so I wont try and talk you out of that regardless of quantity's. But I would look around first.For example if your in Victoria Australia you might find someone who has perfect synergy with yourself and your goals. This might be an opportunity for you to work "with them" once your roasting your own often you are just another competitor.

Explore all relationship opportunity's first........Before running out into the snow on your own in a pair of shorts

p.s. if I was paying $2 per Ib for my favourite coffee's Id be very very happy

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Permalink Reply by Bryan Wray on November 5, 2009 at 1:24am

$8-$12 for roasted on a wholesale account is a little high in my experience. You can buy exceptional beans in the $12 range retail from some serious powerhouse roasters.

Obviously it depends on where you are getting them from and the quality you are seeking but $6-$9 is pretty average.

-bry

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Permalink Reply by Alun Evans on November 5, 2009 at 2:41am

I dont think its a secret, Bryan is about right I think for a wholesale price based on a reasonable volume. It may have been that the roasters you have approached also thought you were after the green price...which is almost an impossible question to answer as the price paid for good greens, direct trade or organic beans of quality can be pretty high.

Bryan Wray said:

$8-$12 for roasted on a wholesale account is a little high in my experience. You can buy exceptional beans in the $12 range retail from some serious powerhouse roasters.

Obviously it depends on where you are getting them from and the quality you are seeking but $6-$9 is pretty average.

-bry

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Permalink Reply by Chris Cockrell on December 1, 2009 at 6:34am

LONG…
John - I’ve been through this same exercise. I spent about 6-8 months on a business plan for an espresso bar and in the process interviewed many of the so called “top” roasters in the industry. I met with many of them at coffee conventions and many sent pounds of their best, just roasted coffees. Most sent along wholesale pricing and found that the $6.50 - $9 is the range for these coffees. Can you find better pricing locally, maybe. For me, it was more the taste. For the espresso bar plan it was about $$. I found only one or two of the so called best beans out there were on my radar for use in MY shop. Once I crunched the numbers using their prices I found it not to be very economical in my business plan. In the end, my planned showed me that outsourcing the coffee beans (primary component of the business) was not a good idea. Too, the control over freshness and the idea that my shop did not roast its’ own was just not working for me. I’m a control freak when it comes to what I would be serving my high paying customers. The margins were not what I needed as well. In my model we could not make it out of the first 18months outsourcing beans at these prices. Lower traffic volume in our location contributed to this.
Finally, I put the shop on hold and I started concentrating on roasting. ..eventually buying a good roaster. ..reading, experimenting, learning from other roasters, buying bad beans and wasting a lot of it…Tasting a lot of coffee from other roasters…good and bad. Once I started producing really good repeatable beans folks wanted to buy. ..we came up with our name, remodeled our home, got licensed, inspected, and eventually moved to roasting and selling great coffee beans at the local farmers market, making great friends and building a good following for my coffee and name. Now, our buyers at the FM buy from us online or by sending emails and phone calls…the following keeps growing. In a few more years we will have such a following that a move to a retail coffee house is inevitable. They are asking for it now…we are just not ready yet.

In the end, you want to be successful...having quality products that people want at a price the like, will do it! Location is another key and thread. So are employees, equipment, branding...

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