How to Start a Profitable Roasting Business
Every coffee shop owner reaches a point where they ask: "Should we roast our own coffee?" Beyond passion and patience, the decision must make financial sense. The question isn’t just if coffee roasting is profitable—it’s how to make it work for your business.
A Breakdown of Coffee Roasting Profit Margins
Research confirms that coffee roasters, on average, achieve higher profit margins than coffee shops. The Specialty Coffee Association’s (SCA) financial benchmark study revealed key industry insights:
Retail coffee shops earn an average 6.86% profit margin due to high operational costs.
Roaster-retailers (those who roast their own coffee) benefit from 65% gross margins and 8.79% profit margins.
Wholesale roasters operate on 44% gross margins but generate $750,000+ in annual sales due to long-term, high-volume accounts.
Businesses that combine retail and wholesale roasting achieve the highest profitability at 11.92% profit margins.
For many coffee shop owners, roasting in-house is the next logical step for growth.Jordan Thompson, owner of Retrograde Coffee in Nashville, TN, recalls why his shop made the transition:
"We kept hearing, ‘The only way to be profitable quickly in this business is to roast your own coffee.’ That’s what got us looking into roasting."
Retrograde started roasting in 2020—just in time to serve retail customers during the pandemic. While profitability is key, startup costs, training, and operational challenges must be factored in before making the leap.
Understanding Startup Costs for Coffee Roasting
The SCA study estimates that opening a Roaster Wholesaler & Retailer operation requires an average of $120,000 in startup capital. Here’s why:
Commercial coffee roasters range from $20,000 to $150,000.
Ventilation, afterburners, and permitting can add thousands in additional costs.
Training & education are required to ensure consistent quality.
Waste during training can result in thousands of pounds of lost beans.
Jordan from Retrograde explains:
“With a traditional gas roaster, we wouldn’t be happy with our coffee quality for at least six months. The learning curve is steep, and the waste is costly.”
These startup costs—and the time required to perfect roasting—can delay profitability and increase debt.
The Cost of Green Coffee Beans
Green coffee pricing varies based on sourcing and quality. Specialty green coffee costs between $2.75 to $5.00 per pound, while high-end suppliers like Onyx charge between $9.50 and $15 per pound. Buying direct through a sustainable marketplace can reduce costs to around $4 per pound. For Retrograde, switching to in-house roasting cut their Cost of Goods Sold (COGS) by over 50%, making their coffee business significantly more profitable.
Bellwether vs. Traditional Roasting: A Cost Comparison
Traditional gas roasting requires significant capital, training, and infrastructure. Bellwether’s all-electric, ventless roaster eliminates many of these barriers. Without gas lines or ventilation, the Bellwether roaster can be installed anywhere, and its pre-set roast profiles allow businesses to start selling immediately. Automated roasting minimizes labor and waste, reducing overall costs. Bellwether customers save an average of 30% on coffee costs immediately.
The Bellwether Green Coffee Marketplace also simplifies sourcing with a risk-free buying model, ensuring that businesses receive high-quality, ethically sourced beans without the guesswork or wasted investment. Retrograde Coffee leveraged Bellwether’s lease model to begin roasting years ahead of schedule. "We couldn’t afford to buy a gas roaster outright. Bellwether made our roasting dream possible much sooner."
The biggest challenge for most businesses is the upfront investment. With Bellwether, you can start roasting with under $10,000 in a matter of weeks, making in-house roasting more accessible than ever before.
Steps to Starting a Coffee Roasting Business
Create a Business Plan
Determine startup and operational costs.
Identify your revenue streams (retail, wholesale, online sales).
Establish a legal entity (LLC or corporation) for liability protection.
Define Your Brand & Target Audience
Who are your ideal customers—coffee shops, grocery stores, or direct consumers?
What makes your coffee unique? Consider roast level, sustainability, and certifications (Fair Trade, Organic, Rainforest Alliance).
Design compelling packaging and marketing materials.
Handle Permits, Licenses & Business Insurance
Register for state and federal taxes (EIN application is free).
Obtain necessary permits and health department approvals.
Secure business insurance to protect against unforeseen risks.
Set Up Your Roasting & Sales Operations
Source high-quality green coffee (Bellwether’s Green Coffee Marketplace simplifies this process).
Train staff on roasting, packaging, and brewing quality control.
Implement point-of-sale systems for retail and online orders.
Market Your Roasting Business
Build a website and social media presence to share your brand story.
Host coffee tastings to introduce your roasted coffee to customers.
Partner with local cafes and businesses for wholesale opportunities.
Ready to Start Your Roasting Business?
Explore how Bellwether makes roasting more accessible than ever before and can help you start roasting and selling exceptional coffee with minimal investment and zero hassle.
