How to calculate food cost
Food cost percentage is the share of a dish's menu price that goes on ingredients. It is the fastest way to see whether a dish is earning its place on the menu, and the number most owners and chefs use to compare dishes, menus and months.
Cost per portion is the cost of everything that goes on the plate. Cost the whole batch first: for each ingredient, multiply the quantity you use by its price per unit, then add the lines up. Divide that batch cost by the number of portions the recipe makes. Use the menu price excluding tax, because tax is collected for the government, not earned by the kitchen.
Worked example: Braised Short Rib
A batch of short rib serves 10 and costs $64.20 in ingredients, including the veal stock and potato purée sub-recipes. The menu price is $28.
At $28 the dish sits under target with $21.58 gross margin per plate. If short rib rises from $9.80 to $11.50/kg, cost per portion becomes $7.19 and food cost climbs to 25.7%, over target without anyone noticing. That is why a food cost is only as good as the prices behind it.
What is a good food cost percentage?
Most full-service restaurants aim for 28–32% across the menu. Individual dishes vary: proteins often run higher, while pasta, desserts and drinks run lower and balance the average. Bakeries and cloud kitchens typically target 25–30%. The right target for you depends on your rent, labour and prices, so treat these ranges as a starting point, not a rule.
A dish with a higher food cost can still be a good dish to sell if it earns more cash per plate. Compare the gross margin (menu price minus cost per portion) as well as the percentage: a $42 steak at 35% still leaves $27.30 per plate, more than a $14 pasta at 22%.
Getting the inputs right
- Use invoice prices, not memory. Take the price from your latest invoice and convert it to the unit the recipe uses (per kg, per litre, per piece).
- Cost the usable amount. Trim, bones, peel and cooking loss mean you pay for more than you serve. Work out the yield with the yield calculator and use the cost per usable kilo.
- Don't forget the small things. Oil, butter, salt, herbs and garnish add up. So does packaging on delivery orders.
- Cost sub-recipes once. Stocks, sauces and doughs should be costed as their own recipe and used per litre or per kilo inside the dishes that need them.
From one recipe to the whole menu
One costed dish is useful; a costed menu is a business tool. Write each recipe down on a recipe card, count your stock with an inventory sheet, and re-cost whenever a key price moves. Spreadsheets work until prices change every week. BrigadeKit's recipe costing re-costs every dish, including sub-recipes, the moment a supplier price changes and flags the dishes that crossed your target.
FAQ
What is the difference between food cost % and gross margin?
Food cost % is the share of the price spent on ingredients; gross margin is the cash left per plate after ingredients. Use the percentage to compare dishes and set targets, and the margin to see which dishes actually pay the bills.
Should I include waste and trim in the cost?
Yes. Use the yielded cost: if a 5 kg case of salmon gives 3.9 kg of usable fillet, divide the case price by 3.9 kg, not 5 kg. BrigadeKit does this automatically with yield percentages.
What price should I use for each ingredient?
Use your latest invoice price, converted to the unit you use in the recipe. Old prices are the most common reason menus are costed too low.
Does food cost include packaging?
For delivery and takeaway, add packaging as a line. It often adds 1–3 points to food cost for cloud kitchens.
How often should I re-cost my menu?
Whenever a key supplier price changes, and at least every quarter. BrigadeKit re-costs every recipe each time a price is updated.
Is food cost % calculated on the price with or without tax?
Without. Sales tax or VAT is not revenue for the kitchen, so divide by the menu price excluding tax. Otherwise every dish looks cheaper to make than it really is.