Ask a struggling roaster where their cash went and they'll usually point at the bank statement. They should be pointing at the warehouse. Stock is where roasters' cash hides — and with green coffee around double late-2023 prices as of August 2026 (arabica peaked at an all-time 440.85 US cents/lb in February 2025 and was around 323 cents/lb as of August 2026), the hiding place has doubled in size. The same pallet of green that anchored your buying plan two years ago now swallows twice the cash. Same sacks, same shelf, double the money you can't touch.
That's why inventory accounting isn't a year-end chore for a roastery. It's the difference between knowing your margins and guessing them, and between a cash flow you steer and one that ambushes you. Here's how to do it properly.
For business owners who want to take this further, our complete guide to accounting for coffee shops can help you put it into practice.
What counts as stock in a roastery
Your stock sits in four buckets, and your accounts should be able to tell them apart:
- Green coffee — raw material, usually your biggest number by far.
- Roasted, unpackaged coffee — work in progress. If you pack within a day or two of roasting, this stays small and you can often treat it as immaterial at month-end.
- Packaged finished goods — retail bags and wholesale kilos ready to sell.
- Packaging materials — bags, valves, labels, boxes. Easy to forget; at scale, real money.
Each bucket is valued at cost, and "cost" is where roasters most often go wrong — in two specific places: what goes into the green cost, and what happens to that cost in the roaster.
Valuing green: landed cost, not invoice price
The cost of a lot of green coffee is not the number on the importer's invoice. It's the landed cost: purchase price plus freight, insurance and port/handling charges — everything it took to get the coffee to your door. Two friendly quirks of coffee help here: import duty on green beans under the UK Global Tariff is believed to be 0%, and there's no import VAT to fund in effect, because coffee is zero-rated food. But freight and port charges are very real, and they belong in the stock value, spread across the kilos in the lot.
Track this per lot, not as a blended average across everything you hold. When you're carrying a Brazilian lot bought forward at one price and an Ethiopian lot bought spot at another, batch margins are only meaningful if each roast carries the cost of the coffee actually in it. A simple spreadsheet with one line per lot — kilos, landed cost, kilos remaining — is enough at most roasters' scale.
The weight loss maths every roaster must build in
Coffee loses 15–18% of its weight in the roaster as moisture leaves the bean. That loss must be built into your roasted unit cost, and skipping it is the single most common — and most expensive — costing error we see. Here's the arithmetic, using an illustrative £10/kg landed green cost at 16% loss:
Related reading: Tips, Tronc and Card Payments: The Café Owner's Guide.
- 1kg of green yields 0.84kg of roasted coffee.
- Each roasted kilo therefore consumes 1 ÷ 0.84 = 1.19kg of green.
- Green cost per roasted kilo: £10 ÷ 0.84 = £11.90/kg — before energy, labour or packaging.
Price off the £10 and you've understated your bean cost by 19% on every kilo you sell, forever. The sensitivity matters too. On that same £10/kg green:
- At 15% loss: £10 ÷ 0.85 = £11.76/kg
- At 16% loss: £10 ÷ 0.84 = £11.90/kg
- At 18% loss: £10 ÷ 0.82 = £12.20/kg
That's a 44p/kg swing purely on yield — which is why you should weigh batches in and out and use your measured loss, not a number from a forum. Darker roasts lose more; your assumptions should follow your roast profiles.
Valuing finished goods then follows naturally: green at landed cost adjusted for weight loss, plus a sensible standard rate for roasting energy and labour, plus packaging per unit. That per-SKU figure — cost per 250g bag, per wholesale kilo — is the number every pricing decision hangs on. This is batch costing in miniature; our complete guide to coffee roaster accounting works through the full method, and our Roaster Batch-Costing Worksheet does the arithmetic for you. One habit to steal: recost whenever green prices move. A cost sheet built at 2023 prices is fiction in 2026.
Related reading: What Café Staff Really Cost in 2026 — and How to Keep Labour Under 30%.
How much green should you hold?
This is the tension at the heart of a 2026 roastery: supply security pulls one way, cash flow pulls the other, and the doubling of green prices has made the rope twice as heavy.
Holding more green protects you against shipping delays, sold-out lots and further price rises — and Lavazza said in July 2026 that prices were unlikely to fall "for at least two years", so the instinct to stock up is understandable. But every extra month of cover is a month of cash you can't use for payroll, marketing or profit. At doubled prices, the buffer that once felt prudent can quietly strangle the business: rich in sacks, unable to pay the VAT bill.
There's no universal right answer, but there is a right way to decide:
Related reading: The Coffee Shop Owner's Tax Guide 2026/27: What You Can Claim.
- Measure stock cover in weeks of roasting, not in sacks or in £. Divide green kilos held by average weekly green usage. Watch the number monthly.
- Set a policy range and hold yourself to it — enough cover to sleep at night given your origins' lead times, no more. When a tempting forward contract would push you above the range, that's a financing question, not just a buying one.
- Fund buying from a dedicated pot. Roasters we work with on Profit First run a green-buying account fed by a slice of every pound of revenue. You buy what the pot can fund — which turns "should we take this contract?" from a gut call into a ten-second check.
- Remember roasted stock is different. Green keeps for months; roasted coffee ages in weeks. Finished goods should be lean by design — roast to demand, not to fill shelves.
If a forward commitment genuinely exceeds what cash allows but the coffee is right, the honest options are supplier payment terms, releasing cash from elsewhere (usually debtors), or external finance — decided deliberately, with the numbers in front of you.
Consignment stock at café customers
Some roasters place coffee with wholesale customers on consignment or sale-or-return — the café pays for what it uses. Accounting rule: coffee on consignment is still your stock until the customer uses or buys it. It belongs in your stock figure at cost, not in sales, even though it's not on your shelf. Keep a simple record of what's held where, get it confirmed at year-end, and be honest about slow-moving consignment coffee going stale in someone else's cupboard — stock you'll never sell at full value should be written down, and the arrangement rethought.
Year-end counts (and why they're worth doing properly)
Your profit figure is only as accurate as your stock valuation, because closing stock directly offsets cost of sales: overstate stock and you overstate profit — and the corporation tax bill that follows it. Understate it and you've overpaid tax and misled yourself about margins.
So count properly at year-end: green by lot (weigh part sacks, don't estimate), roasted and packaged goods by SKU, packaging materials, and consignment stock out at customers. Value everything at landed cost with the weight-loss adjustment on roasted goods — and value honestly downwards where coffee has faded past its best, because stock is worth cost or net realisable value, whichever is lower. Better roasters count monthly, not annually; it takes an hour and it's what makes monthly margins real rather than assumed. It's exactly the rhythm we build with clients through our management accounts service — and if you'd rather hand the whole finance function over, stock discipline included, that's what our outsourced finance service is for.
The takeaway
Green coffee is your biggest asset, your biggest cost and — at the August 2026 prices cited here — your biggest cash flow risk, all in the same sacks. Value it at landed cost by lot, push the 15–18% weight loss into every roasted unit cost, measure your holding in weeks of cover, and count what you actually have. None of it is difficult. All of it is the difference between a roastery that knows and a roastery that hopes.
Start with the numbers: download our Roaster Batch-Costing Worksheet from the coffee resources hub and cost this week's roasts properly, weight loss and all. And if you'd like help building the full picture — stock, margins, cash and a buying policy that fits your cash flow — book a Free Profit Meeting. We'll look at your actual numbers together.
Ready to take action? talk to our team.