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How to calculate food cost

There are two food cost numbers every kitchen needs: what one dish costs, and what your whole kitchen spent against what it sold. Here is how to work out both.

1. Food cost of one dish

Add up every ingredient in the recipe, at the price you actually pay, and divide by the number of portions.

cost per portion = batch ingredient cost ÷ portions

Two details change the answer more than people expect. First, yield: if you pay for 1 kg of chicken thighs but only 75% is usable, the real cost per gram is the pack price divided by 750, not 1000. Second, batch preparations: a marinade or sauce made in bulk should be costed once and then used as an ingredient.

2. Food cost percentage of a dish

food cost % = ingredient cost per portion ÷ net price × 100

Use the net price, meaning the menu price without sales tax if your menu prices include it. A dish with 3.75 of ingredients selling at 14.00 has a food cost of 26.8%.

3. Pricing a dish from its cost

menu price = ingredient cost per portion ÷ target food cost %

With a 30% target, 3.75 ÷ 0.30 gives 12.50. If prices include tax, add the tax to that figure. Then round to a price that suits your menu.

4. Food cost of the whole kitchen

food cost % = (opening stock + purchases − closing stock) ÷ food sales × 100

This is your actual food cost for a period. Compare it with the average of your dish costs: the gap is waste, portioning, theft, errors and unrecorded staff meals.

What is a good target?

It varies by concept, menu mix and market. Many operators work around 28% to 35% of net sales for food, but the right number is the one that still pays your labour, rent and profit. Set your own target, then find the dishes that sit above it.

Want this done for every dish at once? The recipe costing spreadsheet does the above with batch preparations, yields and supplier prices. For a single dish, use the free calculator. More worked examples are on the blog.

Questions

What is the difference between food cost and food cost percentage?

Food cost is an amount of money spent on ingredients. Food cost percentage is that amount as a share of food sales.

How often should I update my recipe costs?

Whenever a supplier price changes, and at least once a month. A costing sheet that follows invoices stays reliable.