Almico wrote:And you better roast that bean carefully

I purposely left that image out of my post and waited to see how long it would take someone to post it in this thread!

OK, thank you for all the replies.
After some more research I seem to figure it out. There are roasting businesses that do not charge arm and leg. They usually sell most of their product online, sometimes sell related items, like grinders and filter but it is just a supplemental. I found some of those and their margin is much more in line to what I would expect from the proportion of the added value.
Expensive local roasters chose low output high cost scheme. Their turnover is much smaller (hence high price) and their good (main) portion of the business is serving coffee, while selling beans is just a supplemental revenue.

On the matter of what roasters pay for green coffee, Onyx Coffee Lab in Arkansas (not the importer also called Onyx), has a transparency section for each coffee they sell on their website in which they indicate how much coffee they bought and what price per pound they paid. There is lots of marketing hype mixed into that and the rest of the copy, but it can make for informative and interesting reading. For coffees targeted for single origin sale, excluding premium ones like Geshas, they tend to pay between $4.50 and a little over $6 per pound.

sweaner wrote:Can anyone tell me what the actual margins are for a roasting business?

Nobody answered the main question.

I was astonished to find a week old coffee in our local Costco with the roast date printed on the bottom. That one was not insanely expensive!

Marshall wrote:Because it contained the questionable premise that it is "insanely expensive."

I often wonder why it doesn't cost a lot more.

karamba wrote:I was astonished to find a week old coffee in our local Costco with the roast date printed on the bottom. That one was not insanely expensive!

Which coffee was it? From my recollection, Costco roasters only print Best By dates.

https://www.costco.com/Peet's-Coffee-Wh ... 81507.html
See that "Roasted" field on the package ? On the Costco shelves it contains the actual roasted date.
Also the "Freshest by" field is "only" two or so months, while all other coffee is a few years!
Kudos to Peets Coffee to making dreams come through!
The price is $8 per pound which I would call a fair price. Your local " not insanely expensive" roaster charges 4 times of that !

The answer is that there are many answers. I can verify from having worked for various companies as well as having the opportunity to speak to many that the answers are fairly well represented here.

There are those who carefully price their coffee to be able to sell at the lowest possible price, those who try to extort the highest possible price, and everything in between.

To answer what I think your direct question asks: why are 12oz bags (from "third wave roasters") usually about $18-20 USD?

I think this is the price that the market currently supports for "third wave roasters" to sell their products. I am thinking of roasters like Intelligentsia and Counter Culture.

I think there are many roasters who imitate what these roasters do (directly support the origin, train their staff to professional levels and pay developed country wages, and continually improve their processes, etc.) who piggyback their pricing to varying degrees of success.

The sad truth (in my opinion) is that consumers can not yet tell the difference between roasters like Intelligentsia and Counter Culture against many third wave roasters that give the appearance that they are the same thing. I think this is getting better though.

In the meantime, I would agree that many (third wave) roasters charge an insanely expensive price. About half the coffee I order in a year (because I like to try new roasters) is total crap and I find myself duped by roasters pretending they know what they're doing. They may buy a beautiful coffee but ruin the roast.