What Is the Profit Margin on Cheese

With the US cheese market expecting a solid projected growth rate of 5.07% from 2023-2028, it’s safe to say there’s a lot more cheese in everyone’s future. But that raises the question: What is the profit margin on cheese?

The cravings may be statistically proven, but does that mean it’s lucrative to jump on the cheese bandwagon? The short answer is yes. We’ll get more into its markup, profit margins and which cheeses to add to menus and shelves for extra gouda sales.

What Is the Retail Markup on Cheese?

The retail markup on cheese is about 25-50% wholesale and 50-100% or more in your retail businesses like grocery stores and restaurants. It’s important to remember that a retail markup is not a profit margin but rather a key variable in calculating it.

However, this number will vary due to a variety of factors, such as the type of cheese, its scale of production, where you’re located, who you buy it from, and, of course, your marketing and pricing strategy.

What Is the Profit Margin on Cheese?

Unfortunately, the profit margin on cheese is not a one size fits all use case. Considering the cost of making cheese combined with the retail markup, you can typically see a profit margin on cheese of up to 35%.

Keep in mind grocery stores are typically not going to see as high a profit margin on their cheese as a restaurant. In fact, a grocery store operates on a slim profit margin of only 1-3%. Believe it or not, cheese is one of the most profitable items in a grocery store, so it makes financial sense to stock it on your shelves.

Calculating the profit margin on cheese in restaurants gets a bit trickier because it varies significantly from dish to dish, not to mention from cheese to cheese. It’s also worth mentioning that it’s more practical to calculate the profit margin on a dish than on an individual ingredient. But we’ll give you a breakdown of how to do both in the sections below. At the end of the day, if adding cheese to your dish will make it taste better, it’s a worthwhile investment.

How to Calculate the Profit Margin on Cheese

Since the profit margins and the cost of cheese vary significantly, you can get a more accurate representation of your cheese profit margins by calculating it yourself. To help you along, we’ve included the equation with an example below.

Note: Please note these calculations are overly simplified for educational purposes and do not reflect real-life pricing or profit margins on cheese.

To calculate the profit margin on cheese, you can use this equation:

Profit Margin = (Net Profit / Revenue) x 100

For example, if you bought mozzarella at a whole price of $8.00 and sold it for $11.00 (which is a markup of 37.5%), your net profit would be $3.00.

Net Profit: Revenue – Cost = $11.00 – $8.00 = $3.00

For the sake of simplicity, we’re assuming there were no other expenses involved, that is, taxes, shipping and delivery fees, labor, storage, utilities and any other overhead cost that you would normally subtract from your sales revenue.

You would then take your net profit of $3.00 and divide it by your revenue, $11.00, multiplying the answer by 100 to get a profit margin of 27.27%.

Profit Margin: ($3.00/$11.00) x 100 = 27.27%

How to Calculate the Profit Margin on Cheese in a Restaurant

To calculate the profit margin on cheese in an individual dish at a restaurant, you will need to collect some additional information, including the cost of the cheese and other ingredients. Don’t forget about the cost of rent, taxes, labor, shipping and delivery, utilities, supplies and other overhead costs associated with running the business.

Using the same equation from above, you can calculate the cost and profit margin of an individual cheese dish:

Profit Margin = (Net Profit / Revenue) x 100

For example, let’s say you want to put a charcuterie board on your menu. You’ve determined that it costs $10.00 to make, so you price it at $25.00. Subtract the cost, $10.00, from your revenue, $25.00, which gives you your net profit of $15.00.

Net Profit: Revenue – Cost = $25.00 – $10.00 = $15.00

Now, take your net profit of $15.00, and divide it by your revenue of $25.00. This gives you a value of 0.4. Multiply this number by 100, and you have a 40% profit margin on your charcuterie board.

Profit Margin: ($15.00/$25.00) x 100 = 40%

But what if you want to get really specific and calculate the profit margin for individual ingredients, namely cheese? Don’t worry, we’re getting there. First, you’ll have to subtract the cost of the cheese from the selling price. In this scenario, we’ll say the cheese costs $8.00. So $25.00 – $8.00 = $17.00. Then we’ll want to divide $17.00 by $25.00 and multiply by 100 to get a profit margin on cheese of 68%, just like we did in the last step. So it will look this:

Profit Margin on Cheese: ($25.00 – $5.00) / $25.00 x 100 = 68%

What Cheese Sells the Most?

Most of us want to know how much money to expect at the end of the month if we add a charcuterie board to the menu or if setting up an artisan cheese department in the grocery store will be a profitable investment. To do this, you need to know what cheese sells the most. Here’s a breakdown of some of the most popular cheeses:

• Mozzarella – Known for its milky taste and moist texture, mozzarella finds its calling in serving in a variety of some of the most popular dishes. Pizza, Caprese salad, sandwiches, bruschetta and frittatas are some examples of its culinary versatility.


• Cheddar – Cheddar cheese is known for its sharp, tangy flavor, providing a focal or accent flavor in some of America’s favorites like mac and cheese, cheeseburgers and nachos.


• American Cheese – American cheese is favored for its ultra-quick melting capabilities, making it the go-to choice for dishes like grilled cheese, hamburgers, breakfast sandwiches, dips and fries.


• Gouda – Its crunchy and crumbly texture, paired with its rich, nutty taste, makes it a front runner on any charcuterie or cheese boards and fondues.


• Swiss – Recognized by its holy appearance and mild, nutty flavor, makes it a tasty base for a fondue or a topping to a burger or sandwich. It also pairs well with ham, chicken cordon bleu and nuts.


• Parmesan – With big and bold flavors, parmesan anchors pasta dishes, seasons soups and tops off garlic bread for a complete Italian dinner.


• Blue Cheese – Everyone loves a good crumble topping on their salads or paired with a spicy buffalo sauce. Its strong, distinct flavor makes it ideal for dips and spreads for mild or blander-flavored food like vegetables and bread.