Premium ingredients can set your dishes apart, but they also cost more. Many restaurant owners wonder if they still have enough margin left with premium p...
That €1.50 difference per portion could make or break your dish's profitability. You're eyeing those premium ingredients but wondering if your margins can handle the hit. Here's exactly how to crunch the numbers and make the call.
The basics: what does the difference cost?
Start simple. Calculate the price difference per portion first — this tells you exactly what you're dealing with.
💡 Example:
You're considering organic chicken breast instead of regular chicken breast:
- Regular chicken breast: €8.50/kg
- Organic chicken breast: €14.20/kg
- Portion per person: 180 grams
Difference per portion: (€14.20 - €8.50) × 0.18kg = €1.03 extra per plate
Calculate your new food cost percentage
Now you'll figure out what your new food cost percentage looks like. This number determines if you're still in healthy territory.
Formula: New food cost % = (Old ingredient costs + Extra costs) / Selling price excl. VAT × 100
💡 Example:
Your chicken dish with regular fillet:
- Current ingredient costs: €7.80
- Selling price: €24.50 incl. VAT = €22.48 excl. VAT
- Current food cost: 34.7%
With organic fillet: (€7.80 + €1.03) / €22.48 × 100 = 39.3%
⚠️ Note:
A food cost above 35% is often considered too high. You'll earn less on that dish than what's standard in the restaurant industry.
From analyzing actual purchasing data across different restaurant types, I've seen operators successfully run premium dishes at 38% food cost — but only if they're confident about customer acceptance and pricing power.
Determine if you can raise your price
If your food cost jumps too high, you might need to adjust your menu price. Here's how to calculate the minimum you'd need to charge.
Formula: Minimum selling price excl. VAT = New ingredient costs / Desired food cost %
💡 Example:
For a food cost of 32% with organic chicken:
- New ingredient costs: €8.83
- Desired food cost: 32%
- Minimum price excl. VAT: €8.83 / 0.32 = €27.59
- Minimum price incl. VAT: €27.59 × 1.09 = €30.07
You'd need to go from €24.50 to €30.07: an increase of €5.57
Weigh the pros and cons
Numbers are just part of the story. You need to consider what this premium ingredient actually brings to your operation.
- Advantages of premium ingredient: Better quality, competitive advantage, potentially justifies higher prices
- Disadvantages: Higher costs, possible price increase needed, risk that guests drop off
- Alternative: Use premium ingredient only for special dishes
Test it in practice
Theory only gets you so far. The real test happens with actual customers and real sales data.
- Introduce the premium ingredient as a limited edition
- Track how much you sell at the new price
- Ask guests for their feedback
- Calculate after a month whether it's profitable
✨ Pro tip:
Calculate the break-even point: if your premium ingredient costs €2.40 more per portion, you need to sell at least 15% fewer portions at the higher price to maintain the same gross profit.
How do you calculate if a premium ingredient still gives margin?
Calculate the cost difference per portion
Subtract the price of the regular ingredient from the premium ingredient. Multiply by the weight per portion to get the difference per plate.
Calculate your new food cost percentage
Add the cost difference to your current ingredient costs. Divide by your selling price excl. VAT and multiply by 100 for the percentage.
Determine if a price adjustment is needed
If your food cost goes above 35%, calculate what you need to charge at minimum. Divide your new ingredient costs by your desired food cost percentage.
Test it in practice
Start with a limited test on your best-selling dish. Measure after a month whether the sales and profitability match your calculation.
✨ Pro tip
Calculate the break-even point: if your premium ingredient costs €2.40 more per portion, you need to sell at least 15% fewer portions at the higher price to maintain the same gross profit.
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
What is an acceptable food cost for premium dishes?
For premium dishes, your food cost can be slightly higher, up to 38%. Guests expect a higher price with premium ingredients, so you can often charge more than with standard dishes.
Do I need to upgrade all ingredients at once?
No, start with one ingredient per dish. This way you can measure the effect and maintain control over your costs. Only upgrade more ingredients once it's working.
How do I know if guests accept the price increase?
Test it first as a daily special or limited edition. Look at the sales and ask for direct feedback. If it goes well, you can make it permanent.
Can I offer the old and new version side by side?
Yes, you can. For example, offer 'Chicken' and 'Organic chicken' at different prices. This way you keep the budget-friendly option and test the premium variant.
What if my food cost becomes too high but I can't charge more?
Consider using the premium ingredient only for special occasions, or see if you can save on other ingredients to balance out the total food cost.
Should I factor in waste when calculating premium ingredient costs?
Absolutely. Premium ingredients often have lower waste rates due to better quality, which can offset some of the higher cost. Track your actual yield percentages for accurate calculations.
📚 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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