Plain yogurt keeps a wide margin: a quart takes about a quart of milk and a spoonful of culture. Greek yogurt is different: straining takes out the whey, so a pound of Greek takes three to four times the milk and costs far more to make. Single cups carry more packaging and labor per ounce than a tub. Margin = (price − cost) ÷ price. In the example below, a 32-ounce tub of plain yogurt costs $3.19 to make and sell and goes for $9.00, a 64.6% margin. A month of four ways of selling brings $15,275 of sales and about $8,990 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 32-ounce tub at a market: $3.19, $9.00, 64.6%.
- Greek takes three to four times the milk.
- Single cups carry more packaging and labor per ounce.
- Wholesale tubs keep less, in bigger batches.
- TaroStack costs each tub from what each batch used. More below.
A tub, costed
Laurel Fork Creamery, the made-up yogurt maker in Floyd, Virginia, I use in these examples, buys milk from two neighboring dairies at $3.50 a gallon and pasteurizes it in its own vat:
| A 32-ounce tub of plain yogurt at a market | Cost |
|---|---|
| Milk and culture | $1.05 |
| Tub, lid and label | $0.52 |
| Labor and make time | $1.35 |
| Card fees, 3% of $9.00 | $0.27 |
| Cost | $3.19 |
The year is in yogurt business plan, and the cups and tubs in how to package yogurt for sale.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Plain yogurt, 32 oz tub | Farmers markets | $9.00 | $3.19 | $5.81 | 64.6% |
| Fruit yogurt, 6 oz cup | Markets and co-ops | $2.75 | $1.08 | $1.67 | 60.6% |
| Greek yogurt, 16 oz | Farmers markets | $8.00 | $3.52 | $4.48 | 56% |
| Plain yogurt, 32 oz tub | Co-ops and grocers, wholesale | $6.25 | $2.92 | $3.33 | 53.3% |
The wholesale tub keeps 53.3%; the Greek keeps 56%, with half a gallon of milk in every 16 ounces.
A month's numbers
A month for Laurel Fork Creamery:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Plain yogurt, 32 oz tub, farmers markets | 600 | $5,400 | $3,486 |
| Fruit yogurt, 6 oz cup, markets and co-ops | 900 | $2,475 | $1,501 |
| Greek yogurt, 16 oz, farmers markets | 300 | $2,400 | $1,344 |
| Plain yogurt, 32 oz tub, co-ops and grocers | 800 | $5,000 | $2,664 |
| Month | $15,275 | $8,995 |
Market tubs bring the most gross profit; the wholesale tubs bring the volume that keeps the vat full. The whey strained from the Greek goes to a neighbor's pigs. What the calcium line on the tub can say is in good source of calcium.
Get the calculator
Download the yogurt 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 milk price. When a dairy raises its price, every tub and cup costs more from the next vat, and the Greek most of all.
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 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.
| 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.