Contract roasting

[expat]

Does anyone have any experience with contract roasting and can suggest what to charge per kilo?

I've got a great customer, who is a great person as well, who is Chinese and has imported some bags of coffee from China. He wants us to roast that for him. If this was a one-off I'd do it for free but as it may be ongoing I need to come up with a price that makes sense.

Any suggestions?

 

[JumpinJakJava]

Although having no experience in contract roasting, have you considered trading your roasting service for green coffee?
Especially if he has connections for importing more. Years ago I sampled some Pearl Dragon coffee from the Yunnan Province,
it was very good. You may not be interested in adding another SO, or it might be conflict of interest competing with this man?
This whole prospect would interest me. As far as charging a make sense fee for ongoing service, I would break it down by
figuring or considering what you need to make per hour for time and overhead. Hope it works out great for you!

 

[peterjschmidt]

I do that on a very small scale for a friend who imports small amounts of Sumatran coffees, and I basically tell him whatever I make on a lb. when I sell it is what I'm charging him to roast a lb. of his.... roughly $7, and if he needs 4lbs. or more it goes down to $6.

 

[chast]

I tried that twice and had the same problem. Charged the customer to roast 5 lbs of coffee and he could not understand why the yield was less and why was he paying for 5 lbs when he received 4.25lbs or somewhere near that. Tried to explain but was not worth it. It was more for a favor than trying to add it to my regular schedule for a long term business deal.

 

[ensoluna]

i guess that might be depends on few other factors.
1. what kind of roaster do you have? and what is the maximum capacity per roast the machine can do?
2. how often and how many kg per week he wants you to roast?
3. do you also roast for other people or other coffee shops?

with above info, probably we can give you some better idea.

 

[expat]

i guess that might be depends on few other factors.
1. what kind of roaster do you have? and what is the maximum capacity per roast the machine can do?
2. how often and how many kg per week he wants you to roast?
3. do you also roast for other people or other coffee shops?

with above info, probably we can give you some better idea.

Ensoluna, as to your questions: #1, we roast about 2.5 10kg roasts per hour. #2, I don't know. #3 yes, we roast for other folks but mainly under our Red Rooster brand -- retail accounts/distributors/coffee shops.

I've more or less figured the cost per hour that I want to go with. The Lovely & Talented Roast Mistress kicks out about 25kg hour and I figure a good roaster is worth €30/hr which gives me €1.20 per kilo (certainly I'm biased but I say she's a good roaster because just this week we've gotten two testimonial emails -- "This is the coffee I've been looking for all my life" and "This is the best coffee I've ever had", if that doesn't give a person a big head I don't know what will!).

But I digress. So continuing on you've got the cost of propane, electric, a set-aside for roaster maintenance/repair, bag cost, rent, delivery, etc., etc. So maybe about €75 per 10kg batch of coffee? Maybe that is a bit high but (a) I really don't want to do it and (b) at that price maybe the idea of contract roasting will only come around once every six months or so, at which point I'll probably do it for free and let him know I'm happy to do it but if it became a regular thing then he'd be paying the €75.

What think?

 

[ensoluna]

Ensoluna, as to your questions: #1, we roast about 2.5 10kg roasts per hour. #2, I don't know. #3 yes, we roast for other folks but mainly under our Red Rooster brand -- retail accounts/distributors/coffee shops.

I've more or less figured the cost per hour that I want to go with. The Lovely & Talented Roast Mistress kicks out about 25kg hour and I figure a good roaster is worth €30/hr which gives me €1.20 per kilo (certainly I'm biased but I say she's a good roaster because just this week we've gotten two testimonial emails -- "This is the coffee I've been looking for all my life" and "This is the best coffee I've ever had", if that doesn't give a person a big head I don't know what will!).

But I digress. So continuing on you've got the cost of propane, electric, a set-aside for roaster maintenance/repair, bag cost, rent, delivery, etc., etc. So maybe about €75 per 10kg batch of coffee? Maybe that is a bit high but (a) I really don't want to do it and (b) at that price maybe the idea of contract roasting will only come around once every six months or so, at which point I'll probably do it for free and let him know I'm happy to do it but if it became a regular thing then he'd be paying the €75.

What think?

that is about $4.80 per pound of roasting..... i believe that is high.
but you said "I really don't want to do it", then, you should just tell him that you prefer not doing it. Just being honest about it will be the best in this case.

 

[ensoluna]

(a) I really don't want to do it and (b) at that price maybe the idea of contract roasting will only come around once every six months or so, at which point I'll probably do it for free and let him know I'm happy to do it but if it became a regular thing then he'd be paying the €75. What think?

bit confused. in your initial thread, you said that "he is a GREAT CUSTOMER and also GREAT PERSON", if that is the case, i do not understand why you do not want to offer him a reasonable price which will make him happy to pay and use your service continuously and also possibly refer other people to use you as roaster for them.

 

[peterjschmidt]

My guess is that there is some underlying tension in expat between the CUSTOMER and PERSON. I experience that myself, in that many of my customers are also good friends. Some of them are more than happy to support me by paying retail - some tell me my coffee warrants a higher price, and they'd pay more - and some think that as friends I should be giving them a discount. Even though expat has high regards for this person, perhaps he still doesn't want to give away the store.

 

[ensoluna]

My guess is that there is some underlying tension in expat between the CUSTOMER and PERSON. I experience that myself, in that many of my customers are also good friends. Some of them are more than happy to support me by paying retail - some tell me my coffee warrants a higher price, and they'd pay more - and some think that as friends I should be giving them a discount. Even though expat has high regards for this person, perhaps he still doesn't want to give away the store.

interesting explanation.... so Peter, what would be the reasonable roasting fee? I only knows how much a roaster charge per 100 lbs of bag in Guatemala, not in USA, so very curious to know what would be the reasonably going rate in Milwaukee, WI USA.

 

[peterjschmidt]

I doubt if there's a rate that is constant across the board, and imagine that this scenario is very common; people buying coffee are either the consumer buying brown or the roaster buying green. My guess is that each situation for contract roasting will be unique.

The biggest game in town roasts and does private labeling for coffee shops that want to make it look like they are selling their own beans, but have no idea what it costs the customer.

 

[expat]

bit confused. in your initial thread, you said that "he is a GREAT CUSTOMER and also GREAT PERSON", if that is the case, i do not understand why you do not want to offer him a reasonable price which will make him happy to pay and use your service continuously and also possibly refer other people to use you as roaster for them.

No, no tension and I have told him I don't want to roast the beans for him. And that is the underlying reason for what you consider to be a high price to roast his coffee.

Basically this guy is a coffee geek. He home roasts and certainly knows more about coffee than I ever will. He's pedantic about the coffee he buys to serve in his shop -- only the very best will do. That's why he's got all those barista champion medallions lining the wall above his Simonelli machine.

So what if we burn up a batch of his coffee or the roast doesn't turn out quite the way he'd like (we've got no experience roasting this bean)? Yes, all that has been discussed up front and everyone understands there could be some hiccups but what happens if the hiccups actually happen? You've probably been in a situation like that with something besides coffee and when it does happen that's where the tension can come in -- which I'm trying to keep out of the relationship.

Finally, after doing all the math I do think we're offering a reasonable price. On top of all the costs I detailed earlier I didn't add in the fact that he doesn't have to go out and lay down a big chunk of money for a roaster to do it himself. Or import it. Or pay the VAT. Or hire the electrician to hook everything up. Or comply with the Health Service regulations to run a food production factory, etc., etc., etc. I took a ride in a taxi the other day -- less than 10 km in traffic cost me about €45 and I was riding in a car that cost less than my roaster. And I had to give the taxi driver directions!

So, all said and done, he loves the price and thinks I should pay more. Go figure!

 

[JumpinJakJava]

Thanks for the full picture. I concur with your reluctance to roast for an "official coffee geek".
May be hard or even impossible to please him with your results. I started out as a home roaster myself,
learning and still learning about coffee and roasting. Expectations keep rising.

Is there any possibility he could use your roaster to roast the coffee himself? The results are now in his lap.
Perhaps he could observe the The Lovely & Talented Roast Mistress, and learn the nuances of your machine.
But, if she is like me, she probably has a "tight grip" on "her trier". Understood!
If not maybe an hourly roasting rate might work. Just some thoughts.
Cheers! JJJ