Yogurt Business Plan: Costs, the Dairy Rules, a Projection

A yogurt business plan starts with the milk and the license. Yogurt is a dairy product, so it's made in a licensed dairy plant, not a home kitchen, with milk pasteurized before the culture goes in, and federal rules say what can be called yogurt: the two characterizing bacteria, at least 3.25% milkfat for full-fat yogurt, at least 8.25% milk solids not fat, and a pH of 4.6 or lower within 24 hours of filling. The money is in the milk: Greek yogurt takes about three times the milk of plain, so it costs more to make than its price suggests. In the example below, a small creamery in Floyd, Virginia, sells tubs, cups and Greek yogurt at markets and to co-ops, turns a profit from month 2, and ends the year about $25,700 ahead on $78,400 of sales, after paying $20 an hour for the making. Below is a description example, each part of the plan, the rules, the year, the startup budget, and a free template.

The short version

• Yogurt is made in a licensed dairy plant, with milk pasteurized before culturing.
• The yogurt standard: two characterizing bacteria, 3.25% milkfat for full fat, 8.25% milk solids not fat, pH 4.6 or lower within 24 hours.
• Cost each product from the milk: plain is about 2 pounds of milk a quart; Greek about 3 pounds a pint.
• Cups for markets and shops carry the volume; tubs to co-ops are the steady wholesale line.
• The vat pasteurizer and the walk-in are most of the startup budget.
• Project the year with a slow start while the license and the first accounts come in.
• TaroStack keeps each vat's lot, its pH and pasteurization readings, and which co-op got it. More below.

Part 1: the business description

Laurel Fork Creamery, a made-up creamery in Floyd, Virginia, I use in these examples, writes:

Laurel Fork Creamery makes plain and fruit yogurt and Greek yogurt from milk bought from two neighboring dairies, in a licensed dairy plant with its own vat pasteurizer, sold at two farmers markets and wholesale to co-ops and grocers in southwest Virginia. Every tub and cup carries a lot code.

Part 2: what each product costs

The milk is $3.50 a gallon from the dairies, about 41 cents a pound. Greek yogurt is strained, leaving whey behind, so a pint takes about three pounds of milk. How yield moves a cost is in batch yield formula.

Part 3: customers and prices

Part 4: the license and the rules

Federal rules require milk products sold across state lines to be pasteurized: 145°F for 30 minutes in a vat, or 161°F for 15 seconds (21 CFR 1240.61). The yogurt standard says the dairy ingredients are pasteurized before the culture goes in, sets the milkfat and milk solids, and requires a pH of 4.6 or lower measured within 24 hours of filling; yogurt can be heat-treated after culturing for shelf life. Your state dairy program licenses the plant, inspects it, and tests the product. Cottage food laws generally don't cover dairy. How a pasteurization record is kept is in cheese HACCP plan. This is general information, not legal advice.

Part 5: the year, month by month

Fixed costs are $1,715 a month: plant space ($900), utilities ($250), insurance ($80), the state dairy license and lab testing ($120), market fees ($120), software and card fees ($35), marketing ($90), and a share of a refrigerated van ($120). Sales start at a quarter of full speed:

The year's sales are $78,447 and the profit $25,733, on top of $20 an hour for the making. The working cash covers the first two months, when the plant costs come before the accounts.

Part 6: the startup budget

What a cheese plant's numbers look like is in cheese making business plan.

Get the template

Download the yogurt business plan template. Four sheets: products with price, variable cost and units at full speed; the year month by month with a ramp you can change; fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Every vat has a pasteurization record and a pH reading, every cup has a date, and every co-op order has to trace back to its vat. The plan doesn't keep any of it.

How TaroStack does it

TaroStack keeps each vat's lot, its readings, and which co-op got it.

Readings on the batch. Fields of your own on the batch record hold the pasteurization time and temperature and the pH within 24 hours, and printable batch-record forms carry a sign-off.

Milk lots consumed. Each batch notes which milk lots it used, automatically, and carries its true cost at what the milk cost.

Where it went. Each co-op's and grocer's order records the lots it got, so one recall report shows every customer a vat reached.

Lots, batches, recipes and true cost 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

Can I sell homemade yogurt?

Not from a home kitchen in most states: yogurt is a dairy product, made in a licensed dairy plant from pasteurized milk; cottage food laws generally don't cover it.

What makes a product yogurt under federal rules?

Pasteurized dairy ingredients cultured with Lactobacillus delbrueckii subsp. bulgaricus and Streptococcus thermophilus, at least 3.25% milkfat for full-fat yogurt and 8.25% milk solids not fat, with a pH of 4.6 or lower within 24 hours of filling.

How much milk does yogurt take?

About two pounds of milk for a quart of plain yogurt, and about three pounds for a pint of Greek yogurt, which is strained.

How much does it cost to start a yogurt business?

In the example, $22,050, most of it a used vat pasteurizer, an incubator and a walk-in cooler.