To price granola, cost a real batch first: every ingredient at what you paid, divided by what comes out of the oven, not what went in, because granola loses weight as it bakes. Add the bag and label, your labor and your kitchen time, and you have the cost per bag. In the example below, a 12 oz bag of macadamia granola costs $5.19 to make; it sells for $7.50 wholesale, so a store can sell it at about $12.50, which is also the price at your own stall. Bulk bags to cafés earn less per pound and take less work. Below is the batch costed line by line, the three prices compared, what moves the cost most, and whether a month of it pays.
The short version
- Cost the batch from what you paid for each ingredient.
- Divide by the baked weight, not the raw weight: granola loses water in the oven.
- Add the bag, label, labor and kitchen time per bag.
- Wholesale at cost ÷ 0.70 or so; retail at what a store would charge, about wholesale ÷ 0.60.
- Bulk earns less per pound and suits cafés and the end of a big bake.
- The nuts usually decide the cost. Check them first when the margin slips.
- TaroStack costs every batch from what you paid and what came out. More below.
Step 1: one batch, from what you paid
Windward Roots, the made-up taro business I use in these examples, makes a macadamia and coconut granola. One batch:
| Ingredient | Amount | Price | Cost |
|---|---|---|---|
| Rolled oats | 5 kg | $1.60 a kg | $8.00 |
| Macadamia nuts | 1.5 kg | $22.00 a kg | $33.00 |
| Coconut flakes | 1 kg | $7.00 a kg | $7.00 |
| Honey | 1.2 kg | $9.00 a kg | $10.80 |
| Coconut oil | 0.8 kg | $6.50 a kg | $5.20 |
| Dried pineapple | 1 kg | $10.00 a kg | $10.00 |
| Salt, vanilla, cinnamon | $2.50 | ||
| Batch, about 10.5 kg in | $76.50 |
It goes into the oven at about 10.5 kg and comes out at about 10 kg, because the honey and fruit carry water that bakes off. So the ingredient cost is $7.65 per baked kilo, not $7.29 per raw kilo. Weigh your own batch out of the oven a few times and use your real yield.
Step 2: the bag
Three batches fit one four-hour kitchen slot: 30 kg of granola, which fills 87 bags of 12 oz (340 g).
| Per 12 oz bag | Cost |
|---|---|
| Granola, 0.34 kg at $7.65 a kg | $2.60 |
| Stand-up pouch with zipper, and label | $0.52 |
| Labor, 4 hours at $20, over 87 bags | $0.92 |
| Kitchen, 4 hours at $25, over 87 bags | $1.15 |
| Cost per bag | $5.19 |
One batch in the same slot would put labor and kitchen at $6.21 a bag on their own, which is why granola makers bake in as few, as full, sessions as the oven allows. How to cost the pouch and label precisely is in packaging cost per unit.
Step 3: three prices, compared
| Retail, 12 oz | Wholesale, 12 oz | Bulk, 5 lb to a café | |
|---|---|---|---|
| Price | $12.50 | $7.50 | $42.00 |
| Per pound | $16.67 | $10.00 | $8.40 |
| Cost | $5.19 | $5.19 | $31.56 |
| Margin | $7.31 (58.5%) | $2.31 (30.8%) | $10.44 (24.9%) |
The wholesale price is about cost ÷ 0.70, and the store's shelf price is wholesale ÷ 0.60, about $12.50, so your own retail price sits at the same $12.50 rather than undercutting the store. The bulk bag's cost is 2.27 kg of granola at $7.65, a $0.60 bag, and $6.00 a kilo of labor and kitchen time. Bulk earns the least per pound, but there's one bag to fill instead of seven. The reasoning behind the 0.70 and 0.60 is in how to price handmade items for wholesale, and why to price on margin rather than markup is in markup vs margin.
What moves the cost most
The macadamia nuts are $33.00 of the $76.50 batch, 43% of the ingredients, so a 20% rise in their price adds about 22 cents to every bag. Swapping half the macadamias for almonds, or making a lower-cost oat and coconut line beside the premium one, are the usual levers. After nuts: the yield (a batch that bakes down to 9.5 kg instead of 10 costs 5% more per bag), the pouch, and how full your oven sessions are. Macadamias are tree nuts, a major allergen, so they go in the allergen statement on the label.
Does a granola business pay?
Four kitchen sessions a month make 348 bags. Selling 120 at retail and 228 wholesale:
| Amount | |
|---|---|
| 120 retail bags × $7.31 | $877 |
| 228 wholesale bags × $2.31 | $527 |
| Contribution | $1,404 |
| Insurance, market fees, website | $500 |
| Profit, on top of $20 an hour for the baking | $904 |
It pays modestly at this size, and better with every extra bag the same kitchen session can hold. The bigger lever is the mix: each retail bag earns three times what a wholesale bag does, but wholesale is what fills the oven every week.
Where this stops working
A pricing sheet built once goes stale fast with granola. Macadamia prices move with every harvest, the honey supplier changes, a new person's batches bake down further, and a café asks for a 10 lb bag. The sheet still says $5.19, and the real cost is something nobody has worked out since spring. With three flavors in two sizes plus bulk, keeping every cost current by hand is a job that doesn't get done.
How TaroStack does it
TaroStack keeps the cost per bag true, batch by batch, without anyone redoing the sheet.
The batch is costed from what you paid. Ingredients come in at the price on the delivery, with freight spread across what arrived, and stock is costed in FIFO layers or moving average. Units convert: buy oats by the 25 kg sack, use them by the gram. Record a batch with what came out of the oven, and TaroStack costs it from the lots it used, divided by the good output, against what the recipe says it should cost. The bake loss is in every batch's cost, not assumed.
One granola, several products. The baked granola can be a component, packed into 12 oz pouches, 5 lb café bags or anything else, each with its own packing recipe, so one batch's cost flows into every size. Margins are reported per product on what each actually cost, so the bulk bag's real margin is a screen.
The nuts get watched. A price-creep report per supplier shows macadamias creeping up before the year-end numbers do. Recipe truth, from your own batch history, shows whether a recipe yields what it claims and which ingredient's quantity is off. And every batch's lots are noted automatically, so a nut supplier's recall leads straight to the bags it went into and the cafés that got them.
| The question | Pricing sheet | In TaroStack |
|---|---|---|
| What does a bag cost today? | The spring number | This batch's actual cost |
| Bake loss | Assumed | From every batch's output |
| Macadamias up 20% | Noticed at year end | Price creep, and the cost per bag moves |
| Bulk bag margin | Worked out once | Reported per product |
Lots, best-by dates and recalls are on every plan, from $49 a month; recipes, batch costs, margins on actual cost and recipe truth are on Standard at $99. The first 30 days are free, with no credit card, and your recipes import from a spreadsheet or a photo of a recipe card. If you'd like a hand setting up, ask, and we'll do it with you.