How to calculate food cost percentage (with worked examples)
· 8 min read
Food cost percentage tells you how much of every sale goes on ingredients. It is the number most owners quote, and also the one most often calculated in a way that hides problems. There are two versions, and you need both: one to set prices, one to check what is really happening in the kitchen.
The two formulas
- Plate food cost % = ingredient cost of one plate ÷ menu price × 100. This is the theoretical number, used for pricing and menu decisions.
- Period food cost % = (opening inventory + purchases − closing inventory) ÷ food sales for the period × 100. This is the actual number, and it includes everything the plate cost leaves out: waste, over-portioning, staff meals and mistakes.
The examples below use dollars, but the maths is the same in any currency.
Step 1: cost one plate
Write down every ingredient in the recipe, the price you pay for it, and how much one plate uses. Use the amount you actually buy and use, not the amount the recipe card was written for years ago. Here is a burger with fries:
| Ingredient | Bought at | Used per plate | Cost |
|---|---|---|---|
| Brioche bun | $5.40 for 12 | 1 bun | $0.45 |
| Beef mince | $9.00 per kg | 150 g | $1.35 |
| Cheddar slice | $4.00 for 20 | 1 slice | $0.20 |
| Lettuce, tomato, onion | mixed | garnish | $0.25 |
| Burger sauce | $4.00 per litre | 20 ml | $0.08 |
| Frozen fries | $2.40 per kg | 150 g | $0.36 |
| Fryer oil allowance | per plate estimate | $0.10 | |
| Total plate cost | $2.79 |
At a menu price of $12.00, the plate food cost is 2.79 ÷ 12.00 = 23.3%.
Account for yield
Many ingredients lose weight before they reach the plate. A side of salmon loses its skin and pin bones; a whole chicken loses bones and trim; vegetables lose peel and stalks. Cost the usable part, not the purchase weight:
- Usable cost per kg = purchase price per kg ÷ yield.
- Salmon bought at $20.00 per kg with an 80% usable yield really costs 20.00 ÷ 0.80 = $25.00 per kg of fillet.
- A 180 g portion therefore costs $4.50, not the $3.60 you get from the invoice price.
To find your yield, weigh an ingredient when it arrives, prepare it the way your kitchen does, and weigh what is left. Do it two or three times and take the average.
Step 2: calculate your actual food cost for a period
Pick a period, usually a week or a month. Count your stock at the start and the end, and add up every food invoice in between:
| Line | Amount |
|---|---|
| Opening inventory | $4,200 |
| Plus purchases | $11,800 |
| Minus closing inventory | $3,900 |
| Cost of food used | $12,100 |
| Food sales | $38,500 |
| Actual food cost % | 31.4% |
Keep food and drinks separate. Drinks usually have much lower costs, and mixing them in makes your food cost look healthier than it is.
Compare the two numbers
Your theoretical food cost is what your menu should cost you, given what you sold and each dish's plate cost. Your actual food cost is what it did cost you. The gap between them is money leaving the kitchen without being sold. Common causes:
- Waste: spoiled stock, over-prepping, dropped plates.
- Portions creeping up: an extra handful of fries on every plate.
- Comps, staff meals and remakes that are not recorded.
- Supplier prices that went up while your plate costs did not.
- Recipes that drifted from what the costing assumed.
A small gap is normal, because no kitchen is perfect. A gap that grows month after month is a signal to look at portions, waste and recent invoices, in that order. Our guide to reducing food waste covers how to find where it goes.
What is a good food cost percentage?
You will often see 28–35% quoted for full-service restaurants. Treat that as a rough guide, not a target. Concepts differ a lot: a pizzeria or a café can run well below that, while a steakhouse can run above it and still be very profitable.
That last point matters more than any benchmark. A low percentage is not the same as a profitable dish. Compare two mains:
| Dish | Price | Food cost % | Profit per plate |
|---|---|---|---|
| Ribeye steak | $32.00 | 40% | $19.20 |
| Tomato pasta | $16.00 | 20% | $12.80 |
The steak has the "worse" food cost but puts $6.40 more cash in the till every time it sells. Pushing guests from steak to pasta would lower your food cost percentage and your profit at the same time. This is why menu engineering looks at profit per plate, not percentage. More on that in the menu engineering matrix explained.
How to lower food cost without cutting quality
- Fix portions first. Use scales, scoops and ladles for anything expensive, and photograph each plate so everyone serves the same amount.
- Re-cost when invoices change. If a key ingredient goes up, recalculate every dish that uses it the same day.
- Use whole ingredients across several dishes, so trim from one becomes stock, sauce or a special for another.
- Start with your best sellers. A 2% improvement on your top five dishes beats a perfect costing of something that sells twice a week.
- Price for the cost you have now, not the cost you had when the menu was printed. Our guide to raising prices covers how to do it without upsetting regulars.