Cheese Profit Margin: Fresh, Aged, Wheels and Curds

Fresh cheese sells within a week of the vat and keeps a wide margin; aged cheese keeps a good margin too, but it sits on a shelf for months first, so the cash is tied up long before it's sold. Milk is the biggest cost: a pound of aged cheese takes more than a gallon. Margin = (price − cost) ÷ price. In the example below, a 4-ounce cup of fresh goat cheese costs $2.94 to make and sell and goes for $8.00, a 63.2% margin. A month of four ways of selling brings $13,080 of sales and about $7,110 of gross profit.

The short version

• Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
• Count your time as a cost, even if you don't pay yourself yet.
• A 4-ounce fresh goat cheese: $2.94, $8.00, 63.2%.
• Milk is the biggest cost.
• Aged cheese ties up cash on the shelf for months.
• Whole wheels to shops earn less per pound than cuts.
• TaroStack costs each cheese from what each batch used. More below.

A cup, costed

Housatonic Creamery, the made-up cheesemaker in Great Barrington, Massachusetts, I use in these examples, makes fresh goat cheese, an aged tomme and curds:

Pricing a wheel from its batch is in how to price cheese, and the label in cheese labeling requirements.

Margins by channel

Fresh goat cheese keeps 63.2%; the tomme cut at the market keeps 53.9% and the whole wheels to shops 42.5%, after months of turning and brushing that the labor line carries.

A month's numbers

A month for Housatonic Creamery:

The month's numbers don't show the shelf: about 1,200 pounds of tomme aging, some $11,000 at cost, bought with milk months ago. Fresh cheese and curds pay the bills while it ages. The year is in cheese making business plan.

Get the calculator

Download the cheese margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The calculator holds one yield a gallon. Spring milk makes more cheese than August milk, and a wheel that loses more weight in the cave than planned costs more a pound, which only the batch records show.

How TaroStack does it

TaroStack costs each cheese from what each batch used, so margins sit on real cost.

True cost from the batch. Each batch takes milk and culture at the price of the deliveries they came from, so a price rise shows in the next batch's cost.

Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.

Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.

Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What is a good profit margin for a cheese business?

In the example, 63.2% on direct sales before overhead; wholesale earns less, so a business that sells both should know its mix.

Is a cheese business profitable?

It can be: the example's month of $13,080 in sales leaves about $7,110 of gross profit, before rent, insurance and the owner's pay.

What is the markup on artisan cheese?

In the example, fresh goat cheese marks up 172.1% on its cost at a market.

Is selling cheese to shops worth it?

In the example, whole wheels to shops keep 42.5% a pound, less than cuts, but a shop takes a whole wheel at once.