Like a slow leak in your restaurant's financial boat, rising cheese prices can sink your profits before you notice the water coming in. Most restaurant owners discover the damage only when they review monthly numbers. Here's how to calculate if your current prices can weather the storm of increasing ingredient costs.
Check your current cheese food cost
Before determining if your prices are sufficient, you need to know how much cheese you're using and what it costs. Add up all the cheese dishes on your menu and calculate their current food cost percentage.
? Example:
Your margherita pizza (€16.50 incl. VAT = €15.14 excl. VAT):
- Mozzarella: €1.80
- Other ingredients: €2.40
- Total ingredient costs: €4.20
Food cost: (€4.20 / €15.14) × 100 = 27.7%
Calculate the impact of price increases
If cheese prices rise by, say, 15%, you'll need to calculate what this does to your food cost. Take your current cheese costs per dish and multiply them by the percentage increase.
? Example price increase:
Mozzarella rises from €12/kg to €13.80/kg (+15%):
- Old cheese costs per pizza: €1.80
- New cheese costs: €1.80 × 1.15 = €2.07
- New total ingredient costs: €4.67 (€2.07 + €2.40)
New food cost: (€4.67 / €15.14) × 100 = 30.8%
Your food cost jumps from 27.7% to 30.8% - an increase of 3.1 percentage points. This might seem small, but it's a mistake that costs the average restaurant EUR 200-400 per month across all affected dishes.
Determine your maximum food cost threshold
Most restaurants keep their food cost between 28% and 35%. If you end up above 35% after price increases, you're probably losing money on that dish. Determine what your maximum threshold is.
⚠️ Watch out:
A food cost of 40% or higher often means you're losing money on that dish, especially after factoring in fixed costs (rent, staff, energy).
Calculate your new minimum selling price
If your food cost becomes too high, you can calculate what your new minimum selling price needs to be to stay within your desired margin. Use this formula:
Minimum selling price = New ingredient costs / (Desired food cost% / 100)
? Example new price:
You want to maintain 30% food cost with €4.67 ingredient costs:
- Minimum price excl. VAT: €4.67 / 0.30 = €15.57
- Minimum price incl. 9% VAT: €15.57 × 1.09 = €16.97
You need to raise your pizza from €16.50 to €16.97 (€0.47 more)
Check the impact on your annual revenue
Calculate how much extra you earn or lose on an annual basis. This helps you decide if a price increase is necessary or if you can absorb the increase.
- Count how many cheese dishes you sell per week
- Multiply by 52 weeks
- Calculate what the extra costs are per year
- Compare this with possible extra income from a price increase
? Annual impact example:
100 pizzas per week, €0.27 extra costs per pizza:
- Per week: 100 × €0.27 = €27
- Per year: €27 × 52 = €1,404 extra costs
- With €0.47 price increase: €47 × 100 × 52 = €2,444 extra revenue
Net benefit: €2,444 - €1,404 = €1,040 per year
Alternatives to price increases
If you don't want to raise your prices, there are other options to absorb rising cheese prices:
- Adjust portion size: 10% less cheese per dish can save 10%
- Compare suppliers: Other suppliers may have better prices
- Menu engineering: Promote dishes with lower food cost more
- Cheese substitution: Mix expensive cheese with cheaper varieties
Food cost tracking software helps you automatically calculate what price increases do to your food cost per dish, so you can adjust quickly.
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How do you calculate if your prices are sufficient? (step by step)
Inventory your cheese dishes
Make a list of all dishes with cheese and note how many grams of cheese you use per portion. Calculate your current cheese costs per dish based on your purchase price per kilo.
Calculate the new costs after price increase
Increase your cheese costs by the percentage increase and calculate your new total ingredient costs per dish. Divide this by your selling price excl. VAT and multiply by 100 for your new food cost%.
Determine your action per dish
If your new food cost comes above 35%, calculate your new minimum selling price or consider alternatives such as smaller portions or different suppliers. Calculate the annual impact to support your decision.
✨ Pro tip
Monitor your food cost percentage on your top 3 cheese dishes every 4 weeks during volatile periods. A 2% increase signals it's time to adjust pricing before profits erode further.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
By what percentage do cheese prices usually rise?
Is it better to wait with a price increase until other restaurants also raise theirs?
Do I need to make all cheese dishes more expensive at the same time?
How often should I check my cheese prices?
What if my competitor doesn't raise prices?
Should I negotiate annual contracts to avoid sudden cheese price spikes?
Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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