COGS: The Recipe for Profit in Every Food Business
Why Every Food Business Needs a Cost of Goods Sold (COGS) Analysis
For many food entrepreneurs, numbers can feel intimidating. Spreadsheets, margins, percentages, these are not why you started your business. You got into food because you love creating, nourishing people, and sharing something deeply personal. But the truth is that passion alone won’t sustain a profitable business. Without a clear understanding of your Cost of Goods Sold (COGS), you risk turning your dream into an expensive hobby.
At NEFB Advisors, we help food businesses find the sweet spot between creativity and profitability. Co-Founder Sherie Theriault knows firsthand how overwhelming it can be to navigate the business side of food, because she’s been there, with her own venture as well as with other businesses as their trusted consultant.
What Is COGS and Why Does It Matter?
COGS is the total cost of producing your product: ingredients, packaging, labor, overhead, and all the invisible expenses that add up behind the scenes. It’s not just about what you spend on tomatoes or flour; it’s also about insurance, licenses, kitchen time, and even the Canva subscription you use for labels.
If you don’t account for these costs, you may think you’re profitable when in reality you’re losing money with every jar, cake, or cookie you sell. Sherie once worked with a client who discovered she was losing $15 on every cake, for years, because she never calculated her true costs. Another small business owner was celebrated in magazines and selling at a major retail outlet, but when Sherie ran the numbers, she found the client was losing 50 cents per jar and had burned through $100,000 in savings.
COGS isn’t just math, it’s the foundation of your business.
The Sherie Approach: More Than Just Numbers
Sherie brings a unique perspective because she has lived the challenges of scaling a food business. At Nola’s Fresh Foods, her salsa line gained traction, but when she tried to scale to a co-manufacturer, she learned how recipe details, like fresh roasted tomatoes, don’t always translate. Months of testing and thousands of dollars later, she realized two things: first, she could not stomach the dead, bland taste of frozen roasted tomatoes, and second, if she had understood scalability earlier, she would have designed her product differently from the start.
That’s why at NEFB, COGS analysis is never just about a spreadsheet. Going through the process helps entrepreneurs think holistically:
Can your recipe scale to wholesale or co-manufacturing?
Are your packaging and ingredients sustainable for growth?
Do your margins leave room for fluctuations in commodity prices or distribution costs?
Are you paying yourself, or at least planning to?
NEFB’s gift is helping business owners shift from “chef” to “entrepreneur,” while keeping the heart of their product intact.
Case Study: A Baking Company
Take X Baking Company [name withheld for privacy], a gluten-free, vegan bakery using premium ingredients. The owner dreamed of moving into wholesale, but when Sherie reviewed her COGS, she discovered the current recipes and processes couldn’t scale without significantly diminishing the quality of the product. Co-manufacturers wouldn’t adapt to her unique methods, like fresh roasted walnuts, and her costs made wholesale pricing unsustainable.
Instead of chasing a dead-end, Sherie guided her to pivot her business model, staying true to her ingredients and continuing sales through direct channels. The result? She avoided wasted time, money, and heartache, and built a more realistic growth plan.
Why Work With NEFB Advisors
Doing a COGS analysis on your own is daunting. Many small business owners either avoid it altogether or make dangerous assumptions based on competitor pricing. NEFB Advisors provides:
Expert templates and tools tailored for food businesses
Real-world experience from Sherie, who has faced the same challenges herself
Strategic foresight to help you avoid costly mistakes before they happen
A supportive guide who understands both the creative and financial sides of your work
By working with NEFB, you’re not just crunching numbers, you’re building a roadmap to profitability, sustainability, and growth.
Final Word
You may think you’ll never need to recall a product or that your costs “probably” work out. But as Sherie has seen time and again, the businesses that thrive are the ones that prepare. A thorough COGS analysis protects your dream, keeps you profitable, and positions you for the growth you want.
At NEFB Advisors, we help food entrepreneurs balance passion with profitability, so your business can feed both your customers and your future.