Food cost percentage is one of the most important numbers in any food business. If yours is too high, you are losing money on every plate. If you do not know what yours is, you are flying blind.
What is food cost percentage?
Food cost percentage is the ratio of ingredient cost to menu price, expressed as a percentage.
Formula: Food Cost % = (Ingredient Cost / Menu Price) x 100
Example: If a dish costs $4.50 to make and sells for $16, the food cost % is (4.50/16) x 100 = 28.1%
What should my food cost % be?
| Restaurant Type | Target Food Cost % |
|---|---|
| Full service (casual) | 28-32% |
| Fast casual | 25-30% |
| Fine dining | 22-28% |
| Food trucks | 25-35% |
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How to calculate food cost for a dish
Step 1: List every ingredient in the dish and its cost per portion (e.g., 4oz chicken breast at $0.30/oz = $1.20)
Step 2: Add up all ingredient costs to get total plate cost
Step 3: Add a waste/trim factor — typically 5-10% of total ingredient cost
Step 4: Divide plate cost by your target food cost % to get the minimum menu price
Example: $4.50 plate cost / 0.30 (30% target) = $15.00 minimum menu price
Why your food cost % keeps creeping up
- Portion drift: Kitchen staff gradually serving larger portions over time
- Supplier price increases: Ingredient costs rise but menu prices stay the same
- Waste: Spoilage, over-prepping, and prep errors
- Theft: Unaccounted-for food leaving the kitchen
How to fix a high food cost %
Start by calculating the food cost % for every menu item, not just overall. You will likely find a handful of dishes that are dragging your average up significantly. Either raise prices on those dishes or engineer around the expensive ingredients.
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