A cheaper ingredient always seems better for your margin, but that's not always true. Sometimes you pay less per kilo, but you also get less usable pro...
Ever noticed how that "cheaper" salmon actually costs you more per plate? You pay less per kilo, but after trim loss and waste, your food cost percentage goes up. Here's how to calculate the real impact on your margin before you switch suppliers.
Why cheaper isn't always better
Your supplier calls with a deal: salmon at €15 per kilo instead of €20. Sounds like a win, right? But there are hidden costs that can destroy your margin.
⚠️ Watch out:
A lower purchase price doesn't automatically mean a better margin. Look at the total cost per portion on the plate.
What you need to include in your calculation
For a real comparison, you need more than just the price per kilo:
- Trim loss: How much gets thrown away during prep?
- Quality: Does it look right on the plate?
- Shelf life: How long before it spoils?
- Preparation: Extra time means higher labor costs
- Portion size: Do you need more to satisfy guests?
Calculate the actual cost price
The price per kilo means nothing. You need to know what you're paying for the usable part that actually reaches the plate.
💡 Example salmon comparison:
Supplier A (more expensive):
- Price: €20/kg
- Trim loss: 30%
- Yield: 70%
- Actual fillet price: €20 / 0.70 = €28.57/kg
Supplier B (cheaper):
- Price: €15/kg
- Trim loss: 50%
- Yield: 50%
- Actual fillet price: €15 / 0.50 = €30/kg
Result: Supplier A is €1.43/kg cheaper!
Calculate impact on your food cost
Now you know the real cost price. Time to see what this does to your margin per dish.
💡 Example: Salmon dish impact:
You sell salmon for €32 (incl. 9% VAT) = €29.36 excl. VAT
Portion size: 180 grams salmon
With Supplier A:
- Salmon cost: 0.18 kg × €28.57 = €5.14
- Food cost salmon: (€5.14 / €29.36) × 100 = 17.5%
With Supplier B:
- Salmon cost: 0.18 kg × €30.00 = €5.40
- Food cost salmon: (€5.40 / €29.36) × 100 = 18.4%
Difference: 0.9 percentage point worse with the "cheap" salmon
Consider other factors
Numbers matter, but they're not everything. Also think about:
- Taste: Does the cheaper product taste the same?
- Presentation: Does it look good on the plate?
- Consistency: Is the quality always reliable?
- Processing time: Does it take longer to prep?
- Shelf life: More spoilage means higher waste costs
⚠️ Watch out:
An ingredient that's 10% cheaper but takes 20% more processing time becomes more expensive due to labor costs. That's the kind of thing you only learn after closing your first month at a loss.
Do the full test
Always test new ingredients for a few weeks before making the switch permanent:
- Calculate the actual cost price per portion
- Test the quality in your kitchen
- Get feedback from your team
- Monitor if guests notice any difference
- Track waste levels compared to your usual supplier
💡 Example: Complete beef test:
Week 1-2: Current supplier (€24/kg, 15% trim loss)
- Actual price: €24 / 0.85 = €28.24/kg
- Waste: 2% of purchase
- Processing time: 10 min per kilo
Week 3-4: New supplier (€20/kg, 25% trim loss)
- Actual price: €20 / 0.75 = €26.67/kg
- Waste: 5% of purchase
- Processing time: 15 min per kilo
Conclusion: Cheaper per portion, but more waste and work
How do you calculate if a cheaper ingredient improves your margin?
Calculate the actual cost price per kilo
Divide the purchase price by the yield after processing. With 20% trim loss, your yield is 80%, so divide by 0.80. This gives you the real price for the usable part.
Calculate the cost per portion
Multiply the actual cost price per kilo by the weight you use per portion. These are your ingredient costs per dish for this product.
Compare the impact on your food cost percentage
Divide the new ingredient costs by your selling price excluding VAT and multiply by 100. Compare this percentage with your old situation.
Test the quality and practice
Try the new ingredient for 2-3 weeks. Pay attention to taste, presentation, processing time and waste. Sometimes cheaper ingredients end up being more expensive.
Calculate the difference on an annual basis
Multiply the difference per portion by the number of portions you sell per year. This shows the real impact on your profit.
✨ Pro tip
Test cheaper ingredients on dishes with 180g+ protein portions first — the cost difference shows up fastest on larger portions where every cent per gram matters.
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
Should I always choose the cheapest ingredient?
No, look at the total cost per portion including trim loss, processing time and quality. A more expensive ingredient can be cheaper in the end.
How do I calculate trim loss for a new product?
Weigh the product before and after processing. Trim loss = ((original weight - usable weight) / original weight) × 100.
What if the cheaper ingredient tastes worse?
Don't risk it. Guests who don't return cost more than you save on ingredients. Always test for a few weeks first.
How often should I compare ingredient prices?
Check your main ingredients every 3 months. Suppliers adjust prices regularly and new ones enter the market.
Can I use different suppliers for the same ingredient?
You can, but make sure quality stays consistent. Guests notice if their favorite dish keeps changing.
How do I factor processing time into my calculation?
Convert your kitchen staff hourly rate to cost per minute. Add this to the ingredient costs for a fair comparison.
What if my cheaper ingredient has a shorter shelf life?
Calculate the extra waste cost and add it to your ingredient price. Spoilage can quickly eliminate any savings from a lower purchase price.
📚 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
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (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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