In years past, when my husband and I would can our salsa, we’d have a basic idea of how much our ingredients cost us. However, we had no idea how much each jar of salsa actually cost and whether or not it was more economical for us to can salsa versus buy salsa. We also thought it would be interesting to know if our salsa would be a candidate for commercial manufacturing or if our costs would be prohibitive.
So this year we used Foodakin.com, our new web application, to help us answer these tough questions.
In this blog post I’m not going to go into the details of using Foodakin.com (you can learn more by looking at Help at www.foodakin.com) but I will share the results of costing out our recipe.
After I entered the salsa ingredients and their purchase price along with the number of portions our recipe yielded (20 pints), Foodakin.com provided a summary screen as shown below.
The total cost for the salsa was $60.49. You can see that the portion cost is $3.02. This is how much it costs to make one pint of salsa. Now, if I wanted to go commercial with this, I could also include the costs associated with labor and materials, such as the jars, labels, etc. I didn’t include these costs but I was able to enter a portion price, $5.00 (how much I’d like to sell a pint of salsa for) and then Foodakin.com calculated the margin. From this information, based on my product costs, I can earn a $1.98 profit on each jar of salsa I sell (a 39.5% profit).
Now that we have the salsa information in Foodakin.com it will be easy for me to update the information. For example, the next time I go to purchase ingredients, if any of the prices have changed all I need to do is update the ingredient cost. All of the other values will be recalculated which will show me whether or not my $5 price is still appropriate. Of course I don’t intend to sell any of our salsa. I’m keeping it all to myself!