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Thank you, Alex. I want to welcome everyone to the Youngevity International Shareholders Call this morning. Speakers on the call today are myself and our President and CFO of Youngevity, Dave Briskie and the President of Khrysos Industries, Dr. Dwayne Dundore. As you know we acquired Khrysos in February of Q1 of this year to now our third reporting segment, which we will title as our commercial enterprise.
On this call, we will cover the following topics. We will highlight the 2019 Q2 results. We will discuss the business model and the progress we've made in our commercial enterprise this morning. We will provide a brief update on our direct selling space and segment. We will wrap up with the coffee segment as well. And we will also provide some guidance.
What I'd like to do right now is bring our President and CFO, Dave Briskie on the call. Dave, are you there?
Yes, I'm here Steve. Thank you so much. Let's get dig right into it, and I appreciate everyone that's on call, and I appreciate you taking time out of your day to listen in. Just so you know, the call will be recorded and it will be posted up on our YGYI.com investor site for replay. We usually leave it up at least for a couple of quarters, so the call will be recorded and posted there.
I want to start off with the balance sheet highlights. Cash and cash equivalents were $2,088,000 at the end of June 30, 2019. And I'm going to do all these comparisons on the balance sheet versus the end of last year 2018. So as of December 31, 2018, we had about 2.9 -- just under $2.9 million on the balance sheet and finished June at 2,088,000. Total assets were up significantly, a $36,524,000 of assets as at June 30th versus just under $76 million of that as of year-end '18, that's an 88 -- 80% increase in assets.
Our total liabilities went from $52 million or $53 million as of 2018 end to June 30th, $86 million to a 62% increase in the liability side of business, which of course bodes well for stockholders equity. Stockholder equity at June 30, 2019 was $50.5 million versus $22.9 million as of December 31, 2018, that's a 120% increase in stockholder's equity as of Q2 versus last year.
So the results for Q2 revenues for the second quarter was up 21.2% to $53.7 million, this compares to $44.3 million for the quarter ended June 30th of last year. We derived approximately 60% of our revenue from the direct selling space and 40% came from the commercial coffee segment. The direct selling segment revenue had decreased about 12.8% to $32.1 million in this quarter as compared to $36.8 million for the quarter ended June 30th. This decrease was attributable to decrease of the number of ordering distributors and customers, and it was partially offset by an increase in the average order per distributing customer, which is a initiative that we embarked on at the beginning of Q1 to raise the average order and start leveraging the multitude of products offered through Youngevity. And so we're happy to see that that number is starting to move in a direction that is showing some favorable results.
Our commercial coffee segment revenues increased by 186.5% to $21.2 million in the current quarter and this compares to $7.4 million for the quarter ended June 30th of '18. The increase was primarily attributed to increase in revenues from our new green coffee contract that was executed last year, and is bearing fruit now. We also, the commercial hemp segment that Steve alluded to that we acquired in February, just started to produce revenue in Q2. It was $274,000 in revenue. And obviously, we have plans for growth of Khrysos as we move through the year. You are going to hear more about that from Dr. Dwayne Dundore later in the call.
Gross profit for second quarter ended June 30, 2019 increased 2% to $25.9. This compares to $25.4 million for the second quarter a year ago. Gross profit in the direct selling segment decreased 11.6% to $22.2 million as compared to $25.1 million for the second quarter ended June 30th, '18. As a result of the decrease in revenues is the reason for the decrease in obviously the GP. Gross profit in commercial coffee segment increased to $3,731,000 in the current quarter, and this was comparative just $295,000 for the quarter a year ago. The primary increase from these revenues, as discussed earlier, came from the green coffee distribution business, which is growing nicely.
Gross margin in the commercial hemp segment, while it was loss of $49,000 related to the acquisition of Khrysos, which closed on February 15, 2019, overall gross profit as a percentage of revenues decreased to 48.3% in the current quarter compared to 57.4% in the same period last year. And this was primarily due to the increase in revenues in the commercial coffee segment, which generally produced lower margins than the direct selling segment.
Operating expenses increased 3.3% to $25.5 million as compared to $24.7 million for the three months ended June 30th, '18. Distributor compensation paid to our independent distributors in the direct selling segment decreased commensurate and essentially with the sales at 12.1%. Total sales and marketing expenses decreased 9.4% to just under $2.8 million for the three month ending June 30th from $3,076,000 for the same period last year. For the three months ended June 30, 2019, total G&A expense increased 59.7% to $8,251,000 from $5,166,000 for the three months ended June 30th, '18. In the direct selling segment, general and admin expenses increased by 38.8% to $6,071,000 in the current quarter from $4,375,000 for the same period last year. This increase was primarily due to increase in accounting computer expenses and some non-cash equity based compensation expense.
In addition, the contingent liability reevaluation adjustment in the current quarter was reduced -- a reduction in expense of about $433,000 compared to a reduction a year ago of $1,246,000 for that same period. In our commercial coffee segment, general and admin costs increased by $557,000, or around 70.4% to $1,348,000 in the current quarter compared to $791,000 in the same period last year. This primarily was due to an increase in wages, warehouse storage costs and profit-sharing expense compared to a profit-sharing benefit in the same period last year.
General and admin expense was $832,000 in the commercial hemp segment, mostly related to wages, supplies and general office costs, and set up costs. Other expense for the second quarter ended June 30 decreased by $696,000 to $661,000 as compared to other expense of $1,357,000 for the three month period ended June 30, 2018. Net interest expense decreased by $487,000 for the three months ended June 30, 2019 to $1,062,000 compared to $1,549,000 for the three month ended June 30, '18. The change in fair value of derivative liabilities decreased by $209,000 for the three months ended June 30th as compared to $401,000 in other income compared to $192,000 for the three month of June 30, 2018.
We did have an income tax benefit for the second quarter ended June 30. It was about $226,000 as compared to an income tax benefit of $90,000 for the second quarter ended June 30, '18. The net loss for the second quarter ended June 30th was $47,000 as compared to a net loss of $614,000 for the three months ended June 30, 2018. EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization as adjusted to remove the effect of equity-based comp, expense and the change in the fair value of warrant derivatives, or adjusted EBITDA, increased 18.2% to $2,604,000 for the quarter ended June 30th and this compares to just around $2.2 million in the same period last year.
I'm getting a lot of questions and a lot of interest, and people are very intrigued about this new operating segment. And so, what I want to do is we're going to shift into a discussion about what's going on at Khrysos. And it's my pleasure to introduce Dr. Dwayne Dundore on the call. It will be the first time you'll be hearing from Dwayne. But I assure you it won't be the last.
So Dwayne, are you available to speak?
Yes, I am. I want to thank everybody for letting me speak to everybody about Khrysos division. To tell you little bit about myself. I actually hold a PhD in thermal dynamics, which is electrical engineering degree. I actually built a lot of equipment in the past for General Atomics, SAIC, DARPA, to just name a few companies.
I will start talking kind of about Khrysos and how we got started with that. A few years ago, we actually have -- we also have INX Labs, which was a division of Khrysos, which we went and started to look at the cannabis space. While the cannabis space started here in Florida couple of years ago, I had some customers and knew that I built supercritical equipment and asked me to look at what was out on the market. So we kind of looked at what was on the market and realized that a lot of the stuff was coming from other industries brought into it, from food or nutraceuticals, and things that it really wasn't designed for cannabis itself.
So we started look into, we designed a supercritical CO2 system, which basically works as it takes CO2, turns into a solvent, extracts oil from the plant. It's the oil contains the CBDs and in some cases in cannabis, THC as well. The machine doesn't really care which one they actually pulls out. So from there, we kind of went on and we sold equipment. Then about two years ago we realized that we had to actually expand even more. So we actually started get into pre-processing equipment, post-processing equipment, because of again a lot of the equipment wasn't really designed for cannabis, it was designed for other things brought into it.
So we kind went into those things and we started build things, like winterization, rotary of operators, distillation equipment. And then what ended up happening was we realized that over time it ended up going where customers, when we sell them the post processing equipment, really didn't work. I mean, the equipment worked but they didn't actually understand how to use it. To get things like THC out of the product or even refine CBD products into other things like water-soluble products, or distillates, is a more scientific approach.
So you can't just do it with an operator that you're training to do something. All of our equipment that we design, except for distillation, is all automated. So the operator really just have product the product in, set his parameters, hit the start and it tells them when it's done, if it's -- it's all automated, so it sends a message out when it starts, when it finishes. If there is a problem, it sends it to us. So we also get those as well and we can monitor those systems anywhere in the world wherever the systems at.
So that is where we came into Youngevity. So what happened was, is we realized that to do this, we actually have to get into the post processing portion of the business. So we started to look at how the post processing comes into play. So a lot of people couldn't really do the post processing, because they normally requires PhDs, or chemist, or things like that. And the post processing, a lot of times when we talk about it in the majority of cases, are really had to pull the facts and lipids out. We have to refine the product to make it more sellable. We may have to take things like pesticides out or herbicides out. We may have to take the THC out of the product to make an end product to be able to sell.
So -- and again farmers that got into it, really couldn't get to that portion. So what we decided to do is to basically kind of follow the same program that Youngevity does with the coffee division or where it's basically feed -- or filled to finish, where you're making it in from hemp product to make CBD derived product. So how that works is basically what we have done is we've looked at the farmers. So we just go back to the farmers and we say, we would take his product, we breed in.
And one of the things that we also saw in the industry here recently is that a lot of times we have to compete with other extraction companies. This is becoming a big problem in the industry, if I am an extractor, I have to compete. So when CBDs are harvested, or the hemp harvested in October-November, prices are down from June-July, prices are 3 times the price of the product just for the same product that we're buying, the oil that we're getting. So we try to make it so we actually have a much better broader, I'll say, playing field.
So what we've done is, we go to certain farmers, normally they're farmers that are on their second or third crop, because the beginner farmers always end up having trouble with. But in the ones actually have been doing it for a couple of years now in certain states, we have been trying to divide them up between the East Coast, Central United States and West Coast. And what we do is we work out joint venture deals with them. So we don't actually have to do the farming. The farmer does know that. We provide extraction equipment at their sites. They actually come in. They'll use the equipment. The oil comes to us. We pre-process or post-process it. And we would turn it into sellable items. We may turn it into bulk items that are sold to other wholesalers. And this is where the industry is kind of moving.
One other things that actually happens in the industry right now is that, if you look at just even some of the -- look at one of the largest drink manufacturers, they actually sell 1.6 billion cans of soda every day. Well, it's not really good places for companies to actually buy large quantities and stuff. And there are some things where some people need like hundred or thousand kilos a week, or 10,000 kilo a week of water-soluble isolates. But if you have all the smaller locations doing it, we normally have to come up where we are trying to get it, so now we can consolidate it. so that kind of gets us into the facility that we actually are taking over, which you actually see a press release this week on, which we did took over GMP pharmaceutical plant, which is 82,000 square feet. This actually has come into play, because of some of the issues we've been having with power, getting enough stuff for our equipment to get it operational. So this actually now has boosts us up a few years, and which Dave will talk about a little later on. But -- so what it's done now is we can actually go in, we can set it up.
Our capacity with the equipment we have existing, we should be able to do about 8,000 kilos of product in, about 4000 kilos out. People always ask me about why that's like that. It's because normally when we get product that comes in from the farmers after its winterized, it's going to be about 40% to 50%, maybe a little greater. We are going to take it 80% in most cases, to be able to sell to other manufacturer. And when we do that, we actually takes 2 kilos to make 1 kilo going out. So with the new facility and the equipment that we have, we can be able to process about 8,000 kilos in and about 4,000 kilos out
We also are adding packaging and bottling as well, so we can actually do some white labeling. We also are putting in a line that's just going to for basically pulling. Pulling is where we get other manufacturers, or other farmers that want their product run, they may want to look to the THC taken out. And we would be able to do that for them. We could take the THC out of the plant or pesticides and then we would, or maybe just take it up in potency, give it back to them. And normally, we get in that case about $1,000 a kilo in most cases to be able to do that. So we have a couple of different revenue streams.
We also haven't forgot our roots of being able to build equipment. We just did a tradeshow in California, and we've got right around 500 leads for equipment out of that show itself. To kind of give you an idea of how was in the past. Like last year, we did the same show, we got about 100 leads. This year, we got over 500 leads. I mean it was incredible show for us. And we're planning on doing another one in Las Vegas in November.
So that's pretty much it. Dave, I hope that covered everything.
No, you're good. And I'll wrap it up. And I think we are going to now bring Steve onto call to talk about the direct selling segment. But before we do that, Dwayne, before you bounce out. When do you expect this new 82,000 square foot facility? I know we started moving in our equipment this week. When do you expect it to be at full capacity?
We actually are hoping to have on -- we're actually going to be moving some of the equipment. And we actually started already this week to move equipment in. We have -- so we are hoping to be at full capacity, which is the 8,000 by the end of the year. We probably will be at partial capacity by, I would say, sometime by the end of August. We have been, because we do have that contract, the contract that we're starting to fulfill actually tomorrow or Friday, sorry, which is I think it's $19 million contract, which we are going to start to filling.
So we had already made product ahead of time. So when we take the equipment down, we won't lose any of that production time. So we should be up, like I said, to start making that here by the end of August, we will be back online with everything. And then, by the end of the year, we should be at full capacity. That capacity is actually the same capacity we would have been at. It would have taken us, if we weren't moving into this facility, it would be about -- it would have taken us about three years to get to the same capacity.
So I mean, I think this is a huge benefit for us. The facility is also is a GMP facility. So it's only -- we would be actually the second GMP facility in the hemp space in the United States that are just hemp derived products. It's one in Colorado and we would be the only one on the East Coast. So that is GMP facility. So I look forward to that and I'm sure we are going to tell you more about that as we -- over the next couple of months.
Absolutely. Okay. Steve, can you give us an update on the direct selling segment?
Yes, absolutely Dave. And thank you, Dwayne, for that update as well. Dave, you and I have watched and participated, obviously, in the expansion growth and coming up to capacity, and full capacity of the coffee facility at CLR in Miami. The facility is in Nicaragua and certainly the facility here in Chula Vista. So it will be exciting to see Khrysos do that same things with this new exciting facilities. So thank you.
Okay. So on to the direct selling division within Youngevity. On the last call, we advised that we'd taken somewhat of a pause of acquisitions and our acquisition strategy. And we've really been focusing more on international for probably the last -- certainly for the last year plus. So we haven't really done acquisitions within that timeframe until recently. So we've begun really focusing on growth through acquisition again. And looking back at the growth of Youngevity, a lot of the growth has certainly been, at least in part because of the acquisition and our acquisition model, which is one of the things that the direct selling division within Youngevity is known for.
And so we feel this pause had a negative effect on growth. And so that's why we had turned our attention back to the acquisition strategy and we've talked about overlaying some of the international infrastructure that we've been focused on building also with our acquisition strategy. And we've been doing that also, especially in the last quarter or so. And we definitely have a lot of conversations underway currently. So the acquisition pipeline again, which acquisitions have been quite effective. The acquisition pipeline is definitely ramping back up. And one of the biggest benefits our acquisition model that we've developed within Youngevity is that its non-dilutive acquisition style and non-dilutive manner, I guess the best way to describe it.
And so definitely as or dealt well for Youngevity in the past and certainly, we believe it will continue to. One of the best aspects that Youngevity attributes or drives from our acquisition model, I guess, is that not only is it non-dilutive but we get great products, great people, great leaders as well as around the world. And one of the things that I will talk about today is that we brought on small acquisitions recently that you guys probably haven't heard about. One is a company called Well & Company, which is in the U.S. and has been really a developer of some unique and fantastic products. And I believe this ties into the conversations that Dave and Dwayne were just having as well. For instance, around hemp derived products.
The key products associated with Well & Company are another delivery system for nutrients and raw whole foods in particular, and that is chewable. So it's a chewable nutrition and if you imagine like a Allan leader piece of candy, although this is not candy, this is whole raw foods put into a chewable piece of food really. And so it may seem like a piece of candy, which is great from a compliance standpoint, the person consuming it. And Dave talked about increasing our average order and certainly the average order per customer and per distributors. This is one of the ways that we do it is by bringing on additional great products that people want to use every day in their lives. And so this company is called Well & Company.
And then also one of the developers and formulators of this unique proprietary delivery method of raw whole foods and nutrients is Dr. James Rouse. Dr. James -- I have known Dr. James for about 10 years now. He is a great, really thought leader within the diet supplement, whole food raw foods movement within the wellness space. And so Dr. Rouse actually attribute his turning toward natural healing and natural wellness methods, leading traditional medical school because of hearing my father's lecture quite a while ago, obviously, and he wanted to go into the same nature pathic school in Portland, Oregon that my father attended, graduated from and want to teach in as well.
And so Dr. James has already made a huge positive impact within Youngevity as such a huge hearty fit right in with the demographic and distributor base within Youngevity, which is known for having just this huge heart and willing is -- willingness to just teach people about health and wellness, and really educate the world around that. And so Dr. James is a great addition. He'll be speaking at our upcoming convention and everybody that meets him, so it's excited to hear more. So that's one of the exciting aspects of our acquisition model, in particular is the people that wind up coming to Youngevity.
Another company that we've done something with similar very recently is called Taiwan Vinegar, and this happens to be in Taiwan as you would imagine. And so this overlays really perfectly with our Taiwan infrastructure, which is again one of the aspects that we've talked about in recent past on these calls. And then in addition to Taiwan Vinegar and another exciting thing that is just developing, is we're now bringing hemp-derived products to Japan. And so this is something that we have been working through approval process and regulatory aspects, and product development. And so this is just happening now. And so we're extremely excited about that.
So we also anticipate announcing additional acquisitions in Q3, which obviously we're in. And so, we've been in talks with various companies and people on things. And so these two that I just mentioned, there will be additional ones we believe in this quarter that we'll talk about later obviously, and you'll hear and see the press releases as these things develop further. So we expect to bring to market. In addition, I just mentioned the hemp products around also Japan, but also here in the U.S., this chewable nutrition. We're excited that we're working with Dr. James on additional hemp-based products. But also in association with Khrysos, we're looking at bringing on and we anticipate bringing on core tincture products for instance and then also Khrysos we've talked about on these calls Dr. Dundore is incredible help around bringing on hemp-derived coffee through CLR. And so we anticipate bringing hemp-derived coffee into Youngevity, the direct selling space also the retail space, sometime at the end of Q3 and Q4, and so that's exciting as well.
Something else that we have been working on is lessening our dependency on the U.S. market around -- in the direct selling division. And we talked about that on these calls and we've talked about the infrastructure that we've developed over the past couple of years internationally, and we've talked about it even on this call. And so, lessening our dependency on the U.S. market it doesn't mean that we don't intent to continue to grow the U.S. market, but we intend to grow the rest of the world also and at a faster rate, because it represents such a huge opportunity, and so this has been a priority.
In 2017, 91% of our direct selling revenue was derived from the U.S. and just 9% was international. And it has been that way for quite a while, Youngevity, the direct selling divisions now going on 22 years old, and is 22 years old. And so that had been relatively constant until recently. 2018, 84% of our U.S. -- of our sales have been derived through the U.S. and 16% internationally. In 2019 in Q1, we derived almost 17% from international markets and in Q2 we derived just about 18% from international markets. And we still are targeting by the end of this year about 20% of our direct selling revenue will be coming from these international markets. So a lot going on around the direct-selling division as well.
And so what I'd like to do now though is bring Dave back on to talk about the coffee segment.
Thank you, Steve. I appreciate that. And one point on Dr. Rouse, I had a good conversation with him this week. And he is -- he really is somewhat of an expert in the hemp based products in the whole cannabanoid system and a strong believer. So, we've been really looking for someone to lead this, the market not only hemp but other products that we're working on. And he has an unbelievable sales track record of both direct as an influence, big-big building blocks in QDC and so forth. And one of the products that he's really watched on to is our Hemp FX line, the promotion of it. And then the creation of other products leveraging our capabilities, our newly acquired capabilities at Khrysos, so that we can ultimately really begin to leverage that end to end processing and then actually the production of products that Dwayne touched on himself.
Obviously, the coffee business had another really strong quarter. We're pleased to see its growth. Green coffee was a big part of it. Green coffee year-over-year was up 60%, '18 versus '19 is what I'm comparing. So is a 60% increase, almost $13.5 million, so very, very significant. But we had experienced growth in other parts of the business. Everyone knows that we're very focused on our brick pack business with our own brands that the Café La Rica, and newly acquired espresso brand called Café Cachita. Our strategy there was to have a lower price leader in Café Cachita come in that would be a promotional brand, to help drive the sales of Café La Rica, so we didn't have to be discounting what we'd consider our premium brand. And this strategy works very nice -- for a company called Bustelo -- Pilon and Bustelo, which was acquired by Smucker's about four or five years ago. And so being able to employ a strategy that we know works is now already starting to pay dividends.
And we really just acquired Café Cachita this year in 2019, and already we're seeing our brick packs unit sales up over 10% year-over-year, and we expect that to continue to accelerate. We're also getting movement on our K-Cup business, it was up 5%. And we have newly acquired a four corner bagging machine. This four corner bagger is really focused on what's going on in the trend in retail right now, and already bringing that piece of equipment up and running. We were running behind on production. We were adding a second ship in our other four corner equipment. And adding this piece of equipment will really drive that business. And it is up 8% year-over-year as well.
So we are seeing growth across the enterprise as it relates to coffee. And then our food service business, we just added a strong leader. We put a press release out on food service. We still believe that is a major growth driver. We just became the official Cachita cafecito of the city of Hialeah. And that is 28 locations, essentially all coffee drink by all government employees in that city, it will be drinking one of our brands, either Cafe La Rica or Josies Java House we've instilled not only American coffee brewers but K-Cup equipment, as well as espresso machines. So that should bode well for the continued growth of our food service business.
Dwayne, I want to bring forward a couple of points home to Dwayne, and some of you picked up on this, I'm sure. But I want to make some of this clear. One of the things that has been a huge challenge for everyone that's in hemp derived business in terms of both extraction and most importantly, post processing is the amount of power that is used to drive this type of industrial equipment. We have definitely been challenged in our facilities that we've been -- that we've created, which are -- which was kind of a modular building structure to get up to speed very, very quickly. We already have the equipment. So we felt like we had the hard part done. We had certain challenges at the various cities from a permitting standpoint and getting all of this power to drive this business and scale it.
And so if you remember on the last call what our plan was is we -- and it was partially because of these power issues, is we were going to put three post processing facilities in our overall strategy. We were thinking Vegas, Florida and up in the Northeast. And we were doing that, because at our current facilities, we just didn't really have the capabilities from a power standpoint to actually manage it that way.
But as we were really refining our business model and as sometimes in business as you're marketing to various customers opportunities come up. And a opportunity came up for this GMP facility that was a single use facility, literally has clean rooms, more power than we would know what to do with it. And having this access to this particular facility got us really thinking of, wow, this would be an opportunity where we could actually -- there's enough power, it's already there in the building.
This was that type of building and that type of use that we could change our strategy. And rather than having all the CapEx to invest in three facilities and then have to manage three facilities and I've managed in three facilities, we actually was able to acquire a building, if you will, and I say acquire, lease up building that could do the work of those three buildings without all of the CapEx that we have to invest into the strategy that we were going to employ.
In terms of shipping the oil, that isn't -- it was never the issue. So now we can bring the oil into one centralized processing facility that GMP -- and will be GMP certified that allows us to do the work of what three facilities would do. And this is how we dovetailed our strategy. Now, it did put us behind a little bit in terms of the short-term. So in other words in terms of Q3 and Q4's capability, it put us behind. But we were definitely struggling with the power. So by leasing this facility, which this lease has been signed, we're literally moving in as we speak. And I'm speaking to you from our coffee operations here in Florida. And right after this call, I'm heading up to our division up at Khrysos, and looking at the whole strategy of this facility.
So in the short term, yes, we probably take -- we don't accelerate our revenue as anticipated in Q3 and Q4 as fast as what we were hoping to do. However, and Dwayne alluded to this, in terms of getting up to speed, we will be up to speed at -- by the end of this year going into 2020 at a capacity that's much, much larger than we would've expected to be able to do in 2020, regardless. So we have now leapfrogged our plans in terms of the capabilities moving into 2020 and 2221, and we are only utilizing two-thirds of this building.
So Dwayne alluded to 4,000 kilos of output, in other words, just so you're clear on that, 8,000 kilos of crude or hemp right coming in, that 8,000 kilos of raw oil that we would produce from the farmers of oil can convert to 4,000 of sellable products. At current prices, at that level of production, you're talking about the ability of beyond $100 million, now closer to $200 million of annual revenue possibility, which really we didn't have mapped out until 2021 or 2122, and we also can scale from there. So we took a short-term scenario. So our model that we were expecting to be in revenue, at this point, shifts about four months, but the capability literally triples as we move into 2023.
So we think that was really smart move in the short-term. It's resolved all of our power issues. And it also is a very, very impressive operation and we're bringing it up to speed as we go. Then you may say, well, what is that going to do to your guidance? Well, based on the performance of the coffee business, the re-ramp up of our acquisition strategy and the reality that Khrysos will definitely be delivering revenues in Q3 and Q4, just not as higher level, we still feel like $200 million as a target revenue is very much in reach in 2019. And then much higher scale as we -- as Dwayne mentioned, as we go ahead and leave 2019, we should be up to the full capacity of putting out 4,000 kilos that's on a monthly basis, by the way, entering into 2020. And of course in this facility, we have room to grow either by increasing the capacity of our equipment or just putting in our other equipment obviously that we already own.
So that's how we're going to be changing the guidance. A little bit of a short-term scenario that we've now resolved, and we're very, very bullish on. But it provides us an opportunity now to really, really accelerate this business. We are seeing demand at such a high level and we wanted to be able to capture this demand on a quicker basis, and to be able to service this market at a much larger scale. And so this opportunity that will fully PR along with some another contracts, probably this weekend or early next, that will help you to more fully understand what we're doing, how we're doing it and why this is a very, very big opportunity for our hemp enterprise for not only the end of this year, but more importantly over the next two and three years and of course largest growth coming in 2020.
With that, I can open up the call to questions. You can, if you want to ask a question, you can simply hit star two to raise your hand, and that should be able to bring you onto the call.
Bill Sutherland from Benchmark. Are you there? Bill, are you there? Okay, I don't hear Bill [Operator Instructions].
I was muted, didn't realize that. Okay. Hey Dave.
How are you doing Bill?
Good. So I was talking about coffee for a second. You've spoken about how the harvest is earlier, and given what's happening with pricing. So can you help us understand at least on the green coffee side, where that -- how that moves the revenues around quarterly? And then perhaps a little bit on just the margin implications for your packed coffee and food service at these low commodity prices.
Yes, let's take them in reverse order. First of all, the margin implication obviously is -- and our cost of goods, we've got an inflation proof model as it is, because we -- for that division, we can go at the cost to grow. But food service margins are the highest of any product we put out, it's in excess of 50% margins as is our retail Cafe La Rica product. So it bodes really well. It will be in excess of 50% margins as those business grow. And it does have a nice impact on the numbers, because at our operations, we're starting to get closer and closer to higher capacities and that allows us to drop more dollar to the bottom line.
In terms of the green coffee business, very interesting, it's really shifting. So the harvest are coming in early. And initially when we were planning our modeling, we expected Q1, Q2 to pretty much do what it did, we're very, very pleased and happy about the way that that came to be, it certainly drove profitability into the coffee segment, which we anticipated. But we expected it to continue into Q3 and then go to -- essentially to fall off in Q4. And really, it's going to flip around now. We're going to see Q1 and Q2 be very strong. Q3 will be not a lot of green coffee business, but it will instead of -- instead of it not being there in Q4, it will start in Q4.
So the down quarter for green coffee will now shift to Q3 where it used to be Q4. So, it's just a flip around on the business. So really doesn't affect the overall revenue for the year. And of course, if you're tracking the sale of the commodity, most experts feel like there will be a rise in that commodities prices, which on our green coffee segment, bodes well for revenue growth. We are planning 2020 15% to 20% of additional capacity. So we're hoping for 15% to 20% growth on top of 2019 for the coffee segment.
I know you have capacity expansion plans in coffee, you've got the joint venture you just announced for Khrysos with the GMP plant and obviously started doing acquisitions again and direct selling. Although, I realized there's not much upfront on those. So can you talk a little bit about your capital demand and allocation plans?
Yes. So we've -- fortunately, we've got some really great shareholders that have been with us for long time. And we've had -- we've been very, very cautious about not selling their equities here at this price. We've had early warrant exercises that have come in. We've got others that are coming in. And so we've been able to bootstrap it, if you will, bringing in this -- just the last week, I believe, we've got another $2.8 million of capital that essentially led to the Khrysos division.
And our plans with multiple sites and going to centralized processing and lease facility really, really took a lot of stress off the capital needs of Khrysos, given that we own this equipment and build this equipment. And it allowed us to accelerate our model. And so we were in some conversations and we believe we can put the capital together that we need to realize the expansion in a relatively non-dilutive, if not, small dilution basis, as well as ultimately over the next 60 days, bringing on a senior secured lender that is very, very intrigued by the activities going on, in particular in the hemp enterprise.
Okay. And so the -- just so we understand the trajectory for Khrysos, you would be in the process of getting the full capacity in the course of 4Q. And is there -- is it kind of like a fairly ratable process, or is it going to be a step function you just going to flip the switch and you're certainly doing…
I think, Dwayne made it clear. We have an $11 million contract that was beginning June, based on these power issues. We were trying to run it off a second shift and some of these challenge, we were able to ship that, to start shipping in August. And we are through this second ship scenario. We built up enough isolate to start shipping that contract here. Friday, I think is what Dwayne said. So we'll begin shipping that particular contract starting on Friday. We've accumulated enough of that material through this pause on this contract to allow us to take that equipment and move it into the new facility, which we're literally doing as we speak and bring that facility up and running within a couple of weeks, which presses that contract and then allows us to execute a second contract.
So it really pushes off our revenue ramp up, probably around four months though is the timing of that. But it accelerates the backend of it, like we said, put us ahead of schedule by two years. So it was a small price to pay and just a very unsure scenario. And anytime you're trying to grow a business and entering contracts and you've got a uncertain scenarios as it relates to power and capacity, that's not a position we wanted to be in. And so this is a very, very big opportunity for the division.
It makes a lot of sense, and good luck with the move. I'll get back in queue. Thanks.
Okay. Any other calls [Operator Instructions].
Hi, Dave. It's is [Tony Fitzgerald].
Hi, Tony. How are you today?
I'm doing very well. Thanks. Just for my own education and perhaps the others on the call. The type of ASP that you're getting for your isolates, do you feel like you're getting market price for that? Or you have a special price because of the contract and the already committed capacity?
Yes, we have a -- our contract has a price built into it and it's definitely in market range. We are shifting a lot of our contracts to the demand on water-soluble. So water-soluble has a much higher margin. So we are seeing a growing demand there, which was why it was necessary to move quickly into this GMP facility with the additional processing capacity to take advantage of those stronger margins. Yes, we're definitely able to move at market. Dwayne, I think made it pretty clear. We are at the point in the model and I'm not sure everybody grasps that that this is a challenge plaguing this industry that's growing so quickly. And what I'm speaking of is you've got a scenario that when you reached the end of a harvest, new hemp is not coming up out of the ground so the end of September, October.
So we get this, when new hemp is available, we see a price compression happening, because simply there is more supply. But as you near the end of the season, then you've got the scenario of higher and higher prices. So our model pretty much gives us a smooth capability of providing good margins and good pricing across the platform 12 months out of year.
Thank you.
Okay. With that, we are going to go ahead and close out the call. I appreciate everyone's time. You can always write us at our IR site or davebriskie@ygyi.com if you have any questions, and we'll get those questions answered. Thank you so much for being on the call today.
The conference is now completed. Good bye.