Indo-USA Coffee Profit Analysis
Margin & Minimum Trade Viability Report 2025-2026
Profit Margin Projections (%)
JAN 2026 DATAThis chart tracks the Gross Margin percentage based on the "Spot" sales price of $4.95/lb against landed costs. Note the significant 14% margin delta dependent on the tariff exemption outcome.
Scenario A: Exemption Signed
23.2% Gross Margin
Optimal scenario: $1.15/lb profit on $4.95/lb revenue.
Scenario B: 19% Tariff
9.1% Gross Margin
Critical scenario: Margin drops by 60% due to trade duties.
Minimum Viable Trade Unit
To achieve the logistical efficiencies required for the projected 23% margin, the Full Container Load (FCL) is the mandatory minimum unit. Shipping smaller volumes (LCL) incurs "Less-Than-Container" surcharges that eliminate the arbitrage opportunity.
Profit per Minimum Unit
Scenario A (23% Margin)
$48,677
Net profit per container
Scenario B (9% Margin)
$19,047
Net profit per container
US Market Opportunity
The US industry generates $13.8B in direct wholesale revenue. However, the value captured downstream in the specialty market swells to $48B.
For an importer, the target is the 3,000+ commercial roasters who are increasingly seeking direct origin relationships to escape the margin compression of the $3.50/lb global "C-Price" peak.
Target Market Tiers
999 Industrial Core (Volume Focus)
2,000+ Micro-Roasters (Margin Focus)
Consolidated P&L (Per lb)
| Category | Cost/lb | % of Price |
|---|---|---|
| Farmgate Purchase (IDR Equivalent) | $2.80 | 56.5% |
| Processing, Shrink & Labor | $0.55 | 11.1% |
| Logistics, Insurance & Finance | $0.45 | 9.1% |
| Total Landed Cost | $3.80 | 76.7% |
| Target Profit (Exemption Signed) | $1.15 | 23.2% |
"The Shrink Ratio"
Indonesia typically sells "Asalan" (wet-hulled) coffee at 30-40% moisture. You buy at 100kg but sell at 75kg after drying to 12%. This 25% weight loss must be baked into the farmgate price calculation or it will zero out the 23% margin.
"The Capital Gap"
You pay Indonesian farmers on Day 0. US roasters pay Net 30/60 after delivery (Day 90-120). You must have the liquidity to float the $160k per container for 4 months.
Trade Agreement Timeline
Late Jan 2026
Presidential signature of US-Indo Reciprocal Trade Agreement. Target: 0% Coffee Tariff.
Feb 2026
Implementation of new HTS duty codes and risk assessment for backlogged containers.