Free water and bread seem costless, but they impact your margins. Many restaurant owners don't factor these costs into their prices, unknowingly giving away profit. You need to correctly process these 'free' items in your cost price calculation.
Why free water and bread actually cost money
Nothing's truly free in hospitality. Water and bread carry real costs:
- Purchase price of bread and butter
- Water costs (tap water costs money too)
- Washing glasses and plates
- Your staff's time to serve
- Wear and tear on dishes
These costs don't vanish because you offer them 'free'. They must be earned back somewhere else.
💡 Example:
A bistro serves free bread with every table:
- Bread rolls: €0.35 per person
- Butter: €0.15 per person
- Water: €0.05 per person
- Washing and service: €0.25 per person
Total: €0.80 per person in 'free' costs
Three ways to handle free items
You've got three options to cover these costs:
Option 1: Pass through in all dishes
Distribute the costs across all your dishes. Most commonly used method.
💡 Example calculation:
100 covers per day, €80 in 'free' costs:
- €80 / 100 covers = €0.80 per person
- Add €0.80 to the cost price of each dish
- Pasta cost price: €6.50 + €0.80 = €7.30
At 30% food cost: minimum selling price €7.30 / 0.30 = €24.33 excl. VAT
Option 2: Include in beverage prices
Some restaurants pass these costs through in their beverage prices, since drinks have higher margins.
Option 3: Separate line item in your calculation
Make it a separate cost line in your overall calculation, alongside food cost and labor costs.
⚠️ Note:
Whatever method you choose, stay consistent. Don't mix different methods, or you'll lose track.
Impact on your total margins
From tracking this across dozens of restaurants, free items can significantly impact your profitability:
💡 Annual impact example:
Restaurant with 100 covers/day, 6 days/week:
- €0.80 per person × 100 × 6 × 52 = €24,960 per year
- At 20% profit margin: you need to generate €124,800 in extra revenue
- Or: your other dishes need to compensate for this
Not passing through costs you nearly €25,000 in profit per year
How food cost calculators help
Food cost calculators can handle free items in different ways:
- Create a 'free items' recipe with all costs
- Automatically add these costs to every order
- See the impact on your total food cost immediately
- Compare scenarios: with and without free items
This way you gain insight into what 'free' actually costs you and can make informed decisions about your pricing.
How do you calculate the cost of free items?
Inventory all 'free' costs
List all items you serve for free: bread, butter, water, amuse, etc. Calculate the purchase price per person for each item.
Add service and washing costs
Also factor in your staff's time and washing costs. Estimate €0.20-0.30 per person for service and washing of free items.
Calculate total costs per person
Add up all costs for a total amount per cover. Add this amount to the cost price of each dish or include it in your overall calculation.
✨ Pro tip
Track your free item spending weekly for 6 weeks straight. If it consistently exceeds 2.5% of your revenue, build these costs into your menu prices immediately.
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 include tap water in my costs?
Yes, tap water also costs money. Calculate approximately €0.05 per person for water, plus €0.15-0.20 for washing the glass.
Can I just ignore free items in my cost price?
No, then you're unknowingly giving away profit. These costs need to be earned back somewhere, otherwise they'll eat into your margin.
How do I know if my competitor also passes through free items?
You don't, but focus on your own numbers. If your margins work out with free items included, you're in good shape.
Do I need to show free items separately on my receipt?
No, that's not necessary. You factor the costs into your overall pricing, but don't need to mention it separately.
What if guests ask for more bread than average?
Calculate based on your average consumption. Some tables eat more, others less. Over a month this usually evens out.
Can I eliminate free items to save costs?
You can, but weigh whether this affects your guests' experience. Sometimes passing the costs through in your prices is a better option.
Should I track free item costs differently for lunch vs dinner service?
Yes, if consumption patterns differ significantly. Dinner guests typically consume more bread and water than lunch guests. Track both services separately for 2-3 weeks to establish accurate averages.
📚 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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