Ingredient Cost in Use: Writing an RFQ Price Target

RFQ snapshot

Price per kilo compares two bags. Cost in use compares two finished servings. When a botanical is dosed to an active, a lot priced 30% higher per kilo can cost about 26% less per serving (hypothetical worked example below, not a Silk Route Ventures price).
Dried turmeric rhizome carries roughly 2% to 5% curcuminoids by dry weight (UK Committee on Toxicity, 2024), so the active strength of two lots of the same ingredient can differ by more than the price does.
The EU limit for aflatoxin B1 in turmeric and other listed dried spices is 5.0 micrograms per kg (Regulation (EU) 2023/915). A cheaper lot that fails it has no cost in use at all.
Silk Route Ventures (SRV) quotes bulk Ceylon spices FOB Colombo, with CFR and CIF on request, from 100 kg per SKU. The price target template in the last section is the part to copy into your RFQ.
This post is for procurement teams buying an ingredient that is dosed to an active, a colour or a flavour intensity. For a commodity bought purely by weight, price per kilo is still the right yardstick.

Most ingredient RFQs end with the same line: “Target price: USD X per kg.” It looks precise. It hides the three variables that move the real cost of the ingredient in your product: how much of it goes into each serving, how much of what you paid for is water, and how much of the active you are actually buying. A supplier can answer that line honestly and still hand you the more expensive option. This piece shows the arithmetic and then a price target line a manufacturer can answer without guessing.

Why does price per kilo mislead on a dosed ingredient?

Price per kilo is accurate about one thing: what leaves your account for a kilo of material as shipped. It says nothing about what that kilo delivers. Cost in use is the price divided by the useful output: cost per serving, per batch or per mg of active. Three levers separate the two numbers. Inclusion rate is how many grams of ingredient the recipe needs. Moisture is the share of the shipped weight that is water. Active strength is the percentage of the molecule or property the label claim depends on.

If the ingredient is bought for colour or bulk and the recipe is fixed, the three levers barely move and per-kilo comparison is fine. If the label makes a claim tied to an assay, a stronger lot lets the formulator use fewer grams, and the saving compounds across every serving in the order.

A hypothetical worked example: two turmeric powders

The numbers below are invented to show the method. They are not SRV prices, not a quote and not a typical market range. Suppose a formulator needs each serving to deliver 60 mg of curcuminoids from turmeric powder. Two suppliers quote the same botanical (Curcuma longa), 60 mesh, same pack.

Parameter	Lot A	Lot B
Quoted price, USD per kg	3.00	3.90
Curcuminoids, % as shipped (HPLC)	2.0	3.5
Powder needed for 60 mg curcuminoids	3.00 g	1.71 g
Ingredient cost per serving, USD	0.0090	0.0067
Ingredient cost per 1,000 servings, USD	9.00	6.69

Lot B costs 30% more per kilo and about 26% less per serving. The break-even is simple to state: Lot B stays the cheaper way to hit the claim until its price passes 3.00 x (3.5 / 2.0), which is USD 5.25 per kg. A buyer who negotiated Lot A down by 10% to USD 2.70 would still be paying more per serving than Lot B at full price. Lot A also needs 3.00 g of powder where Lot B needs 1.71 g, which matters if the serving format has a physical limit.

Source: illustrative arithmetic by the Silk Route Ventures Trade Team. All prices and assay values are hypothetical.

How does moisture change the number you are paying for?

Moisture is the quiet variable. A kilo of powder at 12% moisture has 880 g of dry matter; the same kilo at 8% has 920 g. If an assay is reported on a dry basis, the figure as shipped is lower: a 2.2% dry-basis curcuminoid result at 10% moisture is 2.2 x 0.90 = 1.98% as shipped. Two quotes that both say “2% curcuminoids” can differ by a full moisture band if one is dry basis and one is as shipped.

So the RFQ has to say which basis the assay is on, name the method (HPLC and spectrophotometric readings are not interchangeable), and cap moisture. The longer treatment is in turmeric curcuminoid spec: matching origin to label claim. Without a stated basis, the cost-in-use arithmetic above cannot be done by the supplier or checked by you.

What does a price target line a manufacturer can answer look like?

A price target is useful when the supplier can tell whether it is reachable. That needs the target stated against a spec, a quantity and a trade basis, with the cost-in-use ceiling beside it. A weak line gives a number. A strong line gives the number and what it is for.

Copy this structure and fill in your own values:

Product and form: botanical binomial, part used, form and mesh.
Active and method: minimum curcuminoids (or the relevant active) as shipped, by HPLC, with the basis stated.
Moisture ceiling: maximum percentage as shipped.
Safety limits you impose by contract: aflatoxin against the EU limit, a per-lot lead limit, microbial limits for the destination.
Quantity and cadence: first order and expected annual volume, because a 100 kg first order and a recurring 2,000 kg programme are priced differently.
Price basis: FOB Colombo, or CFR or CIF if you want freight in the number. SRV does not quote DDP.
Target and ceiling: USD per kg target, plus the cost-in-use ceiling per serving it was derived from.

Stating the ceiling per serving is the unusual part. It tells the manufacturer what the number is protecting, so a supplier with a stronger lot can offer it at a higher price per kilo and still win. It also stops the RFQ from rewarding a thinner, wetter lot.

Which specification lines to relax and which to hold

Cost in use also tells you where flexibility is cheap. Some lines move price without moving the outcome. Others look minor and decide whether the lot can be sold.

Line	Relax or hold	Why
Botanical identity	Hold	A wrong species voids every number downstream
Active assay and method	Hold	It is the claim the label rests on
Aflatoxin and lead limits	Hold	EU aflatoxin B1 is 5.0 micrograms per kg in turmeric (Regulation (EU) 2023/915); a failed lot has no value
Moisture ceiling	Hold	It sets the real dry matter you buy
Mesh size (for example 60 or 80)	Relax if the process allows	Often a small price lever with no effect on the claim
Colour value, if the claim is not colour	Relax	Do not pay for a property you do not label
Pack size (for example 20 kg or 25 kg bags)	Relax	Changes handling, rarely the outcome

Silk Route Ventures is built for buyers who compete on origin, documentation and spec, not for the lowest-shelf-price segment. If the only criterion is the lowest invoice price per kilo with no assay, an unspecified commodity lot from a trader will usually beat it, and that is the honest answer. A buyer whose label makes a claim is in a different position. The manufacturer-direct versus broker comparison explains why spec control is where a direct supply route earns its margin, and writing a spice RFQ covers the other blocks the RFQ needs.

Does a lower price per kilo ever win?

Yes, and the method says when. If two lots carry the same assay and moisture, the cheaper one wins on cost in use as well as on price. If the ingredient is added for bulk or a fixed flavour note, the inclusion rate does not respond to strength, so price per kilo is the right comparison. The method matters when the claim is dosed. It also matters in reverse: a high-assay lot is wasted money if the recipe only needs a fixed gram weight for colour.

Quantity breaks work the same way. Commercial orders start from 100 kg per SKU, and trial quantities start from 10 kg. A trial lot prices the sample, not the programme, so state the annual volume in the RFQ and compare programme quotes on cost in use, not trial quotes on price per kilo. Contaminant risk belongs in the same comparison; reading a per-lot heavy metal and pesticide COA shows what to check before a cheaper lot is accepted, and low-MOQ versus high-volume manufacturing explains how quantity shapes the number.

Frequently asked questions

What is cost in use in an ingredient RFQ?

Cost in use is the ingredient price divided by what it delivers: cost per serving, per batch or per mg of active. It combines price per kilo, inclusion rate, moisture and active strength. In the hypothetical turmeric example, a lot 30% dearer per kilo cost about 26% less per serving because it needed 1.71 g of powder instead of 3.00 g.

How do I state a price target a supplier can actually answer?

State the target against a full spec: product and form, active and test method, moisture ceiling, contaminant limits, quantity, and trade basis such as FOB Colombo. Add the cost-in-use ceiling per serving the target came from. A supplier can then offer a stronger lot at a higher price per kilo and still meet your real budget.

Which assay basis should I specify, dry or as shipped?

Specify as shipped, and name the method. A dry-basis result is higher than the as-shipped figure by the moisture share: 2.2% dry basis at 10% moisture is 1.98% as shipped. Dried turmeric typically carries 2% to 5% curcuminoids by dry weight (UK Committee on Toxicity, 2024), so the basis changes which lots qualify.

Can Silk Route Ventures quote against a cost-in-use target?

Yes. Silk Route Ventures supplies Ceylon spices as Ingredient Supply from the FSSC 22000 V6 certified Silk Foods Ceylon (SFC) facility in Matale, from 100 kg per SKU, quoted FOB Colombo with CFR and CIF on request. Send the spec and the per-serving ceiling, and the quote can address both. A COA is available on request.

How Silk Route Ventures can help

Silk Route Ventures supplies bulk Ceylon spices against the buyer’s own spec from the FSSC 22000 V6 certified Silk Foods Ceylon facility in Matale, with USDA Organic and EU Organic on selected SKUs, confirmed per SKU. Commercial orders start from 100 kg per SKU (25 kg per SKU for dried herbs), trial quantities from 10 kg, and standard SKUs ship 2 to 3 weeks from PO to dispatch. A COA is available on request, and samples are free for evaluation (you cover the courier). If your RFQ carries an assay, a moisture ceiling and a cost-in-use target, the quote can be built around them. Contact us to send an inquiry or request a sample. For grades and formats, see the Ceylon spices range, and for the powder specifically, the Ceylon turmeric powder product page.

Sources

UK Committee on Toxicity, “Statement on the potential risk to human health of turmeric and curcumin,” (2024). Retrieved 2026-10-22. https://cot.food.gov.uk/
European Commission, “Commission Regulation (EU) 2023/915 on maximum levels for certain contaminants in food,” (2023). Retrieved 2026-10-22. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32023R0915

Cost in Use, Not Price per Kilo: Stating a Price Target in an RFQ