A 10-ounce tub of hummus costs $1.81 to a grocer, in chickpeas, tahini, lemon and oil, the tub, lid and label, and labor, and sells for $3.75, a 51.7% margin. Tahini is most of the ingredient cost. The market keeps far more, 71.1%, and catering trays keep 70.8%; 5-pound tubs for cafés land near the grocer margin with less packaging. Margin = (price − cost) ÷ price. In the example below, a month of four lines brings $19,870 of sales and about $11,350 of gross profit, before kitchen hours, the van and the owner's pay.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- A grocer tub: $1.81, sold for $3.75, 51.7%.
- Tahini is most of the ingredient cost.
- Market tubs keep 71.1%.
- Catering trays keep 70.8%.
- TaroStack costs each tub from what each batch used. More below.
A tub, costed
Cedar and Lemon Hummus, the made-up hummus maker in Dearborn, Michigan, I use in these examples, counts kitchen labor in each tub:
| A 10-ounce tub to a grocer | Cost |
|---|---|
| Chickpeas, tahini, lemon and oil | $0.91 |
| Tub, lid and label | $0.40 |
| Labor at $20 an hour | $0.50 |
| Cost | $1.81 |
The tub's price is in how to price hummus, and the business's year in hummus business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| 10 oz tub | Grocers | $3.75 | $1.81 | $1.94 | 51.7% |
| 10 oz tub | Farmers markets | $7.00 | $2.02 | $4.98 | 71.1% |
| 5 lb tub | Restaurants and cafés | $26.00 | $12.48 | $13.52 | 52% |
| Catering tray for 25 | Events, invoiced | $65.00 | $19.00 | $46.00 | 70.8% |
The catering tray keeps 70.8%, with pita and vegetables; the 5-pound tub keeps 52%.
A month's numbers
A month for Cedar and Lemon Hummus:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| 10 oz tub, grocers | 3,000 | $11,250 | $5,820 |
| 10 oz tub, farmers markets | 600 | $4,200 | $2,988 |
| 5 lb tub, restaurants and cafés | 120 | $3,120 | $1,622 |
| Catering tray for 25, events | 20 | $1,300 | $920 |
| Month | $19,870 | $11,350 |
The grocers bring the most gross profit, 3,000 tubs at 51.7%. Every dollar off a pound of tahini saves about 9 cents a tub, about $280 a month across the grocer tubs alone. Kitchen hours, the refrigerated van and the owner's pay come out of the gross profit. How long the tubs keep is in hummus shelf life.
Get the calculator
Download the hummus 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 cost per tub. Tahini prices move, a flavor with roasted peppers costs more, and tubs that come back past their date change every margin.
How TaroStack does it
TaroStack costs each tub from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes chickpeas, tahini and lemons 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.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a tub cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
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.