What counts as COGS for a food and beverage brand

For measuring POAS, "cost of goods" means every cost that scales with each order you sell. Ad spend is not included, because it's the other side of the ratio. For a food or beverage brand, the product is only part of it. Packaging, keeping it cold and getting it there intact can cost as much again.

What goes in

Cost	Count it?	Why
Ingredients, or the co-packer's price per unit	Yes	The base of unit cost
Primary packaging: jars, cans, bottles, pouches, labels	Yes	Per unit, and priced by volume
Co-packing or production fees	Yes	Charged per unit or per batch
Inbound freight	Yes	Part of landed cost
Shipping box and protective packing	Yes	Glass and liquids need more of it
Insulated packaging and cold packs	Yes, on chilled or frozen orders	A per-order cost of the cold chain
Pick, pack and outbound shipping you pay	Yes	Faster services for perishables cost more
Payment processing fees	Yes	A share of every order
Stock written off at its best-before date	Yes, spread across units sold	Short shelf life turns slow stock into a cost
Replacements for spoiled or damaged deliveries	Yes, spread across orders	Paid after the sale was recorded
Recipe development and certifications	No	Paid once, not per order
Retail slotting fees and in-store demos	No	Wholesale and marketing costs, not DTC order costs
Google Ads spend	No	It's what POAS divides by

Building one order's cost

That second line is why cold-chain products need their own margin, and possibly a minimum order, before they are worth advertising at all.

Three levels of accuracy

Selvra OS works with three tiers of cost data and shows which one a figure is based on.

T1: one flat margin (labelled "estimated")

One percentage for the whole range. This is workable for a brand selling one shelf-stable product line. It misleads as soon as chilled products, glass or gift boxes enter the range.

T2: margin by category (labelled "approximate")

A margin per product type: shelf-stable, chilled or frozen, beverages, gift sets. For food brands the categories that matter most are the ones with different packaging and shipping needs, not just different recipes.

T3: cost per product (labelled "verified" once synced)

Shopify's Cost per item field, per variant, read directly. Single units and multipacks are variants with different costs per unit, so each needs its own figure. Shipping and cold-chain packaging sit outside Cost per item and need adding per order.

Reading the benchmark above

The figure above is an industry figure: cost of goods was 76.77% of sales across 78 US-listed food processing companies in Damodaran's January 2026 data. The group includes packaged-food brands such as General Mills and Hershey alongside meat and poultry processors such as Tyson Foods and Pilgrim's Pride. Soft-drink companies in the same table ran at 45.26%. A brand selling direct at retail prices will see a lower share on the same unit cost than a company selling it wholesale, so treat the benchmark as a reference point, not a target.

Common COGS mistakes in food and beverage

• Counting the product and stopping. Packaging and shipping can cost more than what's in the box.
• Leaving out the cold chain. Insulation, cold packs and faster shipping are per-order costs.
• Ignoring spoilage and replacements. They are part of what every order costs, spread across all of them.