Is Selling Soft Pretzels Profitable? Markets and Breweries

A 4-ounce soft pretzel costs $0.78 in flour, malt, lye, butter, the bag, shaping time and the card fee, and sells at a market for $5.00, a 84.4% margin, one of the widest in food. Giant pretzels for breweries keep 71.2%, pretzel bites with cheese dip keep 76.2%, and frozen six-packs for grocers keep the least, 48.3%, because six pretzels take six times the shaping. Margin = (price − cost) ÷ price. In the example below, a month of four lines brings $13,650 of sales and about $10,030 of gross profit, before kitchen hours, market fees and the owner's pay.

The short version

• Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
• A market pretzel: $0.78, sold for $5.00, 84.4%.
• Ingredients are a small share; shaping is the bigger cost.
• Brewery pretzels keep 71.2%.
• Frozen six-packs keep the least.
• TaroStack costs each pretzel from what each batch used. More below.

A pretzel, costed

Vine Street Pretzel Works, the made-up soft pretzel maker in Cincinnati, Ohio, I use in these examples, counts shaping time at $20 an hour:

The market pretzel's price is in how to price pretzels, and the business's year in pretzel business plan.

Margins by channel

The bites keep 76.2%, the cheese dip costing more than the pretzel; the frozen six-pack keeps 48.3%.

A month's numbers

A month for Vine Street Pretzel Works:

The market pretzels bring the most gross profit; the pretzel bites come second, and the breweries, third, buy every week of the year, including the winter when the market is closed. The frozen six-packs keep the least of each sale but keep grocers' freezers stocked with the name. Market fees and kitchen hours come out of the gross profit; the market permit is in temporary food permit.

Get the calculator

Download the soft pretzel 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 pretzel. Butter prices move, a rainy Saturday sells half, and pretzels left at close change every margin.

How TaroStack does it

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

True cost from the batch. Each batch takes flour, butter and malt 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

Is selling soft pretzels profitable?

It can be: the example's month of $13,650 in sales leaves about $10,030 of gross profit, before kitchen hours, market fees and the owner's pay.

What is the profit margin on a soft pretzel?

In the example, 84.4% on a 4-ounce pretzel at a market.

Is selling pretzels to breweries worth it?

In the example, a giant pretzel keeps 71.2%, every week of the year.

What does a soft pretzel cost to make?

In the example, 18 cents of ingredients and $0.78 in all with the bag, shaping and the card fee.