tutorial How to determine your hot sauce cost and ingredient cost per bottle!

This might be self explanatory to some, but I figured for new hot sauce makers, this might be helpful to get started.
 
To determine the cost of your hot sauce and ingredients, you need to have a recipe with a list of ingredients indicating how many ounces you purchased versus how many you are using. You need to know exactly how many bottles you make when you cook the recipe.
 
When making new sauces, I start with very small amounts of ingredients, so that in the end I'm only producing 2-3 bottles of sauce. This cuts down on the cost of testing so you aren't wasting so much sauce. When I've nailed the recipe, then I multiply the ingredients to fit the stock pot I'm cooking in.
 
Create an excel sheet with the below headings or whatever you want to name them:
 
Excel Sheet Headings:
 
ITEM / INGREDIENTS
BRAND
PURCHASE LOCATION
AMOUNT PURCHASED
AMOUNT USED
INDIVIDUAL COST
BULK COST
COST PER BOTTLE
 
To determine cost:
You need to take the AMOUNT PURCHASED and divide it from AMOUNT USED.
Then take the INDIVIDUAL COST or BULK COST and divide it from the RESULTS from above.
Take the results and divide it from the BOTTLE AMOUNT the recipe makes - In this example it's 3 to determine ingredient cost per bottle.
 
 
-------------EXAMPLE------------
ITEM / INGREDIENTS: Apple Cider Vinegar
BRAND: Whitehouse
PURCHASE LOCATION: Costco
AMOUNT PURCHASED: 128 oz (1 container)
AMOUNT USED: 15 oz
INDIVIDUAL COST: $4.49
BULK COST: NA
COST PER BOTTLE: $0.02
 
Example Equation: 128 (Amount purchased) / 15 (amount used) = 8.533. $4.49 (individual cost or bulk cost) / 8.533 = 0.526. 0.526 / 3 (bottle amount) = 0.175 (Cost Per Bottle).
 
So now you've done this for all of your ingredients, you've determined how much each ingredient costs per bottle of sauce you make. Tally up the sum of the COST PER BOTTLE row, and you now know how much each bottle of sauce costs you to make.
 
As you get better wholesale deals or pricing on your ingredients, update your sheet!
 
Scale up your recipe:
 
If you have a 16 QT stock pot, that will hold roughly 512 ounces. You'll want to cut that down some though as you don't want to fill your sauce to the very top of the pot. Let's say 450 ounces. From your recipe, add up the total ounces from all of your ingredients and if your ingredients amount to less than your target amount of ounces, keep multiplying your recipe until your recipe makes up close to your target ounces. Even though you've multiplied your ingredients, the cost should remain the same per bottle. The math will be different, but the cost shouldn't change.
 
I recommend re-doing all the math though once you've scaled up your recipe just to make sure and in case I'm an idiot :)
 
Edit: Don't forget to add your bottles, caps, shrink wraps, and labels as they are a part of the cost per bottle.
 

salsalady

Business Member
Great breakdown.  This will help folks.   Thanks for taking the time to share.
 
Also, keep in mind semi-intangibles like-
kitchen rental cost (if using a commercial or shared use kitchen)
electricity/gas/water
 
 
and of course....your time.  :)
 
Furious Sauces said:
Edit: Don't forget to add your bottles, caps, shrink wraps, and labels as they are a part of the cost per bottle.
 
In addition to the things mentioned by SL - you need to figure in the amount of product lost in the recipe process due to processing of the ingredients - for example deseeding of pods and cutting of other ingredients and if cooking the sauce down, don't forget you may be cooking it down as much as 25% or more ! (when figuring cost per bottle it's amount per finished ounce of product not cost per ounce of ingredients.) Also allow some extra loss due to spillage/spoilage of ingredients since you are never going to get 100% ideal output.
 

The Hot Pepper

Founder
Admin
Figure in the wholesale cost. Let's say your crop is destroyed and you have to buy the peppers. You can do this without changing your sauce price because you calculated your sweat equity as wholesale. 
 
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