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When to bring chocolate production in-house

A production line is justified when repeat demand can load it, the contribution gained per kilogram covers fixed costs and capital, and the workshop can deliver saleable output without relying on perfect utilisation.

“Outsourcing” covers several supplier models

White label usually means a manufacturer’s standard recipe and format sold under your brand. Private label is normally made to your specification. A co-manufacturer performs one or more production stages, while a co-packer fills or packs product made elsewhere.

The supplier’s minimum order quantity, or MOQ, matters because it converts a unit price into cash tied up in stock. A lower quoted price can cost more after freight, storage, obsolete packaging and inventory written off before its best-before date.

Decision What stays outsourced What moves in-house Primary test
1. Contract product to in-house finishing Couverture manufacture Tempering, moulding, cooling and packing Cost and lead-time reduction
2. Purchased couverture to own recipe Cocoa liquor or nib production Formulation, refining, flavour development and tempering Recipe control and margin
3. Own recipe to bean-to-bar Cocoa growing and post-harvest work Roasting through to the finished product Incremental contribution from origin-led products


The answer is a volume, not a turnover figure

The calculators below start with transparent planning assumptions. Replace every commercial input with a supplier quote or production trial before approving equipment.

Model Threshold per month Target payback Main risk
Finish purchased couverture — — Sales do not load moulding and packing capacity
Make an original recipe — — Long refining cycles require several machines
Bean-to-bar: next stage — — Premium price does not cover added process cost

The threshold is calculated as: annual fixed production costs plus annual capital recovery, divided by contribution gained per kilogram and then divided by 12. Capital recovery is capex divided by the selected payback period.

Build the outsourced cost before comparing equipment

Landed outsourced cost includes the supplier price, freight, customs where applicable, external storage, MOQ-related stockholding, obsolete packaging and quality rejects. Keep co-packing separate if the packer invoices per unit or per production run.

Landed outsourced cost per kg = supplier price + logistics + storage + MOQ cost + waste and rejects.

Internal production cost must include direct labour, cleaning, quality checks, product left in equipment, maintenance and packaging. Labour should be calculated from hands-on hours per sellable kilogram, not from machine cycle time.

For a UK model, the legal minimum is a floor rather than a loaded employment cost. The National Living Wage for workers aged 21 and over is £12.71 per hour from 1 April 2026. The calculators add an editable employer on-cost percentage for holiday, pension, National Insurance and other employment costs. Check current UK minimum wage rates.

Calculator 1: replace a contract-made product

This is the direct outsourcing decision. The business keeps buying couverture but takes tempering, moulding, cooling and packing in-house.

Couverture-to-finished-product model

Defaults are planning inputs in pounds sterling, not market quotations.

Current outsourced cost
£
£
£
£
£
In-house variable cost
£
£
£
%
h
£
Investment and demand
£
£
kg
yrs
%
wks
Practical moulding capacity
kg
days
%
%
Landed outsourced cost—
In-house variable cost——
Contribution gained—
Threshold volume—at selected target payback
Practical capacity——
Working capital estimate—raw material and packaging only
Simple payback at forecast volume—
Five-year NPV—before tax and financing structure
Annual cash contribution—after added fixed costs

The default capacity assumes two 20 kg moulding loads on 22 working days and applies both yield and utilisation. It refers to finishing ready-made couverture. It does not imply that a 20 kg melanger can refine 20 to 60 kg of chocolate each day.

Tempering must create and retain the required stable cocoa-butter crystal population. Cooling, mould availability and packing can become the bottleneck even when the tempering machine still has spare capacity.

Calculator 2: replace purchased couverture with an original recipe

This is an upstream integration decision. Ingredient cost is shown by component so that an unexplained “raw materials per kg” assumption cannot carry the result.

Original-recipe production model

Ingredient percentages must total 100%. Use delivered prices from your own suppliers.

Purchased couverture benchmark
£
£
Recipe and delivered ingredient prices
%
£
%
£
%
£
%
£
Labour, overhead and investment
£
%
h
£
£
£
kg
yrs
%
wks
Practical refining capacity per machine
kg
h
h
%
%
Recipe total——
Ingredient cost—
In-house variable cost——
Contribution gained—
Threshold volume—
Capacity per machine——
Working capital estimate—
Simple payback at forecast volume—
Five-year NPV—before tax and financing structure

KADZAMA publishes a 48 to 72-hour range for chocolate in its 20, 35, 65 and 85 kg melangers. A 35 kg model has a published working range of 20 to 40 kg. The calculator therefore uses actual batch mass, the complete cycle, cleaning, yield and utilisation. Review KADZAMA melanger cycle and capacity guidance.

A target near 20 to 30 micrometres can be useful for a smooth texture, but particle size depends on the measurement method and is not the only release criterion. Flavour and flow still need specification. At higher, stable volumes, compare melangers with a complete ball-mill and conching line: the faster size-reduction step may require pre-grinding, transfers and separate flavour development.

Calculator 3: treat bean-to-bar as the next stage

Bean-to-bar adds roasting, cracking, winnowing, refining and more quality-control points. Its business case normally depends on the extra contribution customers will pay for origin, formulation and flavour, rather than a simple saving on cocoa.

On 1 October 2026, the ICCO daily indicator was US$5,438.98 per tonne, or about US$5.44 per kg. This is an international futures-based reference, not a delivered price for speciality beans, cocoa liquor or cocoa butter. Use current supplier quotations in the calculator. Check ICCO cocoa prices.

Main-crop West African cocoa bean shell commonly represents about 11% to 12% of bean weight. The actual nib yield also depends on sorting, roasting and winnowing, so the calculator converts your delivered bean quotation using an editable yield. Review cocoa shell and edible-yield guidance.

Bean-to-bar incremental contribution model

The £150,000 default is a test input, not a market price. Replace it with complete supplier quotations.

Current product
£
£
Bean-to-bar product
£
£
£
%
wks
Complete investment
£
£
kg
yrs
%
Practical refining capacity per machine
kg
h
h
%
%
Current contribution—
Bean-to-bar contribution—
Incremental contribution—
Bean cost per kg of nibs—before roasting energy and labour
Threshold volume—
Capacity per refiner——
Working capital estimate—
Simple payback at forecast volume—
Five-year NPV—before tax and financing structure
Annual cash contribution—

The capex input should combine the roaster, cracker and winnower, refiners or melangers, any separate conching stage, tempering, cooling, mould handling, extraction, climate control, electrical work, installation and QC equipment. A single headline machine price is not a bean-to-bar investment budget.

Sensitivity: volume can matter more than a small price saving

The table shows monthly contribution before fixed costs, capex and finance. It makes the interaction between volume and contribution gained per kilogram visible.

Monthly volume £1/kg £2/kg £4/kg £6/kg

A project that gains £1/kg at 300 kg per month creates only £3,600 per year before fixed costs. At £4/kg and 1,000 kg per month, it creates £48,000. The equipment decision changes when either axis changes.

Connect the three conditions to five evidence gates

  1. 01
    Demand: use 6 to 12 months of sales history, repeat orders and signed commitments. Do not annualise one seasonal peak.
  2. 02
    SKU concentration: identify whether a small number of recipes carries most volume. Recipe changes add cleaning, allergen controls and idle time.
  3. 03
    Unit economics: calculate landed outsourced cost and internal cost per sellable kilogram. Include the cash held in MOQ stock.
  4. 04
    Practical capacity: test batch size, complete cycle, cleaning, yield and utilisation. Keep headroom for maintenance and seasonal orders.
  5. 05
    Process ownership: assign responsibility for recipes, batch records, release checks, sanitation, traceability and corrective action.

Sources and technical references

Model the line around your real products

Bring monthly volume by SKU, current landed costs, supplier MOQs, main recipes, available shift hours and equipment quotations. KADZAMA can compare in-house moulding, original-recipe production and bean-to-bar without treating them as the same investment.

Start with the outsourcing calculator
KADZAMA production economics guide · Assumptions remain editable and should be replaced with current quotations.
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