where does the money go ric nicaragua 2009pdf

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  • 1. Where Does the Money Go? A Look at the Consuming Side Economics of the Coffee Supply Chain

2. For this Example a Milled Green CoffeeFair Trade andOrganic Certified Sells to an Importer at $1.50 per pound 3. Importer Adds Costs and Margin Green Coffee$1.50 Shipping and customs entry .095 Warehouse and logistics.05 Finance and Storage.095 Importer Margin.15 Total Importer Add .39 Cost to Roaster At Warehouse $1.89 4. Coffee Ships to RoasterEx Warehouse Coffee Price $1.89 Shipping Cost.12 Shrink Loss of 18% .44 Roasted Cost per Pound $2.45 5. Roaster Sells a Pound of Roasted Coffee for$7.25 Roasted Cost per Pound$2.45 Packaging Cost.39 Direct Labor Cost .55 Transfair Fee .10 Material Cost Total$3.49 6. All Other Operating Expenses for Roaster Wholesaler Material Cost Total$3.49 Wages Excluding Direct Labor .94 Sales, General & Administrative (SG&A) 1.68 Interest, Depreciation, Amortization and Lease .38 Total Cost To Roaster One Pound$6.49 7. The Bottom Line Sales Price from Roaster One Pound$7.25 Total Cost To Roaster One Pound $6.49 Pre-Tax Profit on Sale of One Pound.76 State and Federal Taxes of 35% .27 Total Net Profit per Pound$ .49 (6.7%) 8. Coffee Retailer Buys One Pound of FTO Coffee for $7.25 Brews coffee using a ratio of 60 grams of coffee per liter of water One pound yields 7.5 liters of coffee beverage Coffee is sold at $1.75 per 475 ml cup Pound yields 16 cups or $28.00 9. Retailer Revenue and Cost of Goods Sale of 16 Cups $28.00 Coffee Cost7.25 Cups 2.00 Lids .46 Stir Sticks.16 Condiment Cost .56 Gross Profit per Pound$17.57 10. Retailer Operating Costs Gross Operating Profit $17.57 Labor Cost(20%)5.60 Leasehold( 7%) 1.96 Utilities (2.5%) .70 Marketing( 3%) .84 Repairs & Maint ( 2%).56 G&A ( 15%) 4.20 Net Operating Profit per Pound $ 3.71 11. Net Profit Retail Operations Net Operating Profit $3.71 Depreciation, Interest, Amortization 1.12 State and Federal Taxes.91 Net Profit$1.68( 6%) 12. Contact the SCAA330 Golden Shore # 50 Long Beach, CA 90802562.624.4100info@scaa.orgwww.scaa.org SCAA on Facebook SCAA on Twitter