How to calculate food cost (with examples)

Every dish that leaves your kitchen has two prices: the one the customer pays and the one you pay to make it. The gap between the two is your margin. Food cost is the tool that tells you, precisely, how much a dish really costs you — and therefore how much you're making on it.

Plenty of operators go "by feel": they know the margherita pizza does well and that fancy main course maybe doesn't. But "maybe" doesn't pay the bills. Let's see how to put real numbers under your dishes.

What food cost is

Food cost is the cost of the raw ingredients needed to prepare a dish, usually expressed as a percentage of the selling price. It's not the price of the dish: it's what the ingredients inside that dish cost you.

There are two ways to look at it:

• Dish food cost: what the ingredients of a single portion cost you. Useful for pricing the menu properly.
• Overall food cost: the ratio, over a period, between everything you've spent on ingredients and everything you've taken in. Useful for understanding the general health of the place.

The formula

The basic formula is simple:

Food cost % = (ingredient cost ÷ selling price) × 100

Ingredient cost is calculated on the actual portion, not on the package. If you buy a kilo of mozzarella and use 150 grams per pizza, only the cost of those 150 grams goes into the food cost.

A worked example

Take a plate of pasta with tomato sauce, selling price €9.00.

Ingredient	Quantity	Cost
Dry pasta	120 g	€0.25
Tomato passata	150 g	€0.45
Oil, garlic, basil	to taste	€0.20
Grated cheese	15 g	€0.30
Salt, spices	to taste	€0.05
Total		€1.25

Food cost % = (1.25 ÷ 9.00) × 100 = 13.9%

A food cost below 14% on a simple pasta dish is excellent. It means that, on the ingredient side, that dish works well for you.

Careful: this is the theoretical food cost, the one you'd have if everything ran smoothly. The actual food cost is often higher, because it includes waste, unbalanced portions, kitchen mistakes and shrinkage. Comparing the two numbers tells you how much you're losing in the kitchen without noticing.

Which percentage is healthy

There's no magic number that's the same for everyone, but there are ballpark ranges:

• Full-service restaurant: an overall food cost around 28-35% is considered healthy.
• Pizzeria: often lower, because ingredients cost little relative to the selling price.
• Bar and café: coffee and drinks have a very low food cost, pastries a slightly higher one.

The point isn't to hit an ideal percentage, but to know what yours is and keep it under control over time. A food cost that climbs month after month is a warning: rising supplier prices, waste, or selling prices frozen for too long.

How to bring it down (without cutting quality)

1. Recalculate costs when prices change. If the supplier raises the price of mozzarella, the food cost of every pizza changes. Many only notice at year-end, when the margin has already evaporated.
2. Control portions. Standardize the weights. Twenty grams more per plate, multiplied by hundreds of covers, is real money.
3. Reduce waste. Order better, rotate stock, reuse the good leftovers. Everything thrown away is pure food cost.
4. Review the menu. Dishes with high food cost and little margin need repricing or rethinking.

The most common mistakes

• Calculating on the package price, not on the portion used.
• Forgetting the "invisible" ingredients: oil, salt, spices, garnishes. Individually they cost little; together they shift the percentage.
• Not updating costs when suppliers change their prices.
• Stopping at the theoretical food cost and never comparing it with the actual one.
• Pricing "by eye" by copying the restaurant next door, without knowing your own numbers.

Once you know the food cost of your dishes, the next step is to understand which dishes actually make you money: because a low food cost isn't enough if that dish is ordered once a week.

Try AFLUYO

Calculating food cost by hand, dish by dish, is the boring part. AFLUYO reads your real supplier invoices and calculates the food cost and margin of every dish automatically, updating them when prices change. Try it free for 7 days, no card.