What is food cost?
Food cost is the cost of the ingredients needed to prepare a dish, expressed as a percentage of the selling price. It is one of the most important metrics in restaurant management: controlling it is the difference between a profitable restaurant and one that runs at a loss.
⚡ A well-run restaurant maintains food cost between 25% and 35% of the selling price. Above 40%, margins become critical.
The food cost formula
Two complementary formulas are essential:
The markup coefficient is widely used in professional kitchens — it shows how many times the selling price exceeds the ingredient cost. A coefficient of 3.5× equals a food cost of 28.6%.
Worked example: Mushroom Risotto
Let's calculate the food cost of a mushroom risotto, step by step.
| Ingredient | Quantity | Price/kg | Cost |
|---|---|---|---|
| Carnaroli rice | 0.180 kg | € 4.20 | € 0.76 |
| Dried porcini mushrooms | 0.025 kg | € 48.00 | € 1.20 |
| White onion | 0.060 kg | € 1.80 | € 0.11 |
| Vegetable stock | 0.500 L | € 0.90 | € 0.45 |
| Butter | 0.040 kg | € 9.50 | € 0.38 |
| Parmigiano Reggiano | 0.030 kg | € 28.00 | € 0.84 |
| Olive oil, salt, pepper | to taste | — | € 0.12 |
| Total ingredient cost | € 3.86 | ||
With a selling price of € 15.00:
✅ A food cost of 25.7% is excellent. There is enough margin left to cover fixed costs (rent, staff, energy) and generate profit.
How to calculate the correct selling price
If you have a food cost target (e.g. 30%), you can work backwards to find the minimum selling price:
Or using the markup coefficient:
The 5 most common food cost mistakes
1. Ignoring waste and cooking losses
Every ingredient has a yield rate: raw meat loses 20–30% during cooking, vegetables lose weight during prep. Without accounting for losses, your food cost will be systematically underestimated.
📐 Yield in practice: if you buy 1 kg of fillet at € 32/kg with a 75% yield, the actual cost is € 32 ÷ 0.75 = € 42.67/kg.
2. Not updating supplier prices
Raw material prices change — sometimes significantly for seasonal products. A food cost calculated in January may be completely wrong by September. Review costs at least quarterly or whenever a supplier changes their pricing.
3. Overlooking minor ingredients
Salt, pepper, olive oil, vinegar, herbs — they seem negligible individually but add up to 3–5% of total cost across hundreds of covers. Add a flat-rate "seasoning" line to each recipe.
4. Confusing cost per kg with cost per portion
Every dish has its own gramme weights. Knowing an ingredient's price per kg is not enough — you need to multiply it by the exact quantity used in the recipe.
5. Not monitoring variations between services
Real food cost can vary between lunch and dinner service, or between weekdays and weekends. Calculate food cost by menu and by service to identify specific inefficiencies.
Theoretical vs actual food cost
Every restaurant owner should track both:
- Theoretical food cost: calculated by summing recipe costs multiplied by portions sold. The "ideal" value if there were no waste at all.
- Actual food cost: calculated from physical inventory (opening stock + purchases − closing stock) divided by revenue for the period.
A gap of more than 3–5% between the two points to a problem: waste, theft, inconsistent portions or improvised recipes.
Menu Engineering: linking food cost and popularity
Knowing the food cost of every dish is the first step. The second is crossing it with popularity (number of portions sold):
- ⭐ Stars: high margin + high popularity → keep and promote
- 🔧 Puzzles: high margin + low popularity → improve visibility
- 🐴 Plow Horses: low margin + high popularity → cut costs or raise price
- 🐕 Dogs: low margin + low popularity → consider removing
Calculate food cost for every dish in seconds
Fiche Technique Pro manages ingredients, quantities and prices, and automatically calculates food cost and markup coefficient. Works offline, no monthly subscription.
No credit card. No subscription.
Summary: the key steps
- List all ingredients with exact gramme weights per portion
- Update purchase prices regularly
- Apply yield coefficients (cooking loss / prep waste)
- Calculate: Food Cost % = Cost ÷ Price × 100
- Compare theoretical and actual food cost monthly
- Use Menu Engineering to optimise your menu
✅ Target: food cost between 25% and 35% for most dishes. You can accept up to 40% if the dish drives high volume or brings in customers for more profitable items.