Your food cost determines whether you make or lose profit on each dish. Many restaurant owners don't know what 'normal' is and miss out on money without realizing it...
Mark's Caesar salad was bleeding €73 per week without him noticing. At 44% food cost, this popular dish was quietly eating into his bistro's profits while he focused on flashier problems. Most restaurant owners discover these silent profit killers only after months of declining margins.
What are normal food cost percentages?
There's no universal 'normal' food cost. It varies wildly based on your concept, location, and positioning. But you need benchmarks to know where you stand.
Common food cost percentages:
- Fine dining: 28-35%
- Casual dining: 28-35%
- Bistro/brasserie: 25-32%
- Pizzeria: 20-28%
- Fast casual: 25-30%
- Café food: 25-35%
These figures serve as guidelines, not rigid rules. A pizzeria easily stays under 25% because pasta and pizza ingredients cost relatively little. Fine dining restaurants use premium ingredients and typically land at 32-35%.
How do you calculate your own food cost?
You can't manage what you don't measure. Calculate food cost per dish to spot the troublemakers.
Formula:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
Critical: Always use the selling price EXCLUDING VAT. Your menu shows prices with 9% VAT included. Divide by 1.09 to get the true price.
Example calculation:
Steak on your menu: €32.00 incl. VAT
Selling price excl. VAT: €32.00 / 1.09 = €29.36
Ingredient costs: €10.50 (meat, vegetables, sauce, butter)
Food cost: (€10.50 / €29.36) × 100 = 35.8%
That's high for a steak dish.
Factors that affect your food cost
Your food cost gets influenced by far more than just ingredient purchase prices. Include all cost factors in your calculations:
- Seasonal fluctuations: Fresh products can double in price between seasons
- Waste and portion size: A 10% difference in portion size directly impacts your food cost
- Supplier changes: New suppliers can mean 5-15% price differences
- Staff handling: Inconsistent portioning by kitchen staff
- Storage and shelf life: Poor storage can create up to 20% extra waste
When do you need to take action?
Your food cost will temporarily spike. Suppliers raise prices, seasonal products get expensive, or your chef portions generously. But at what point does it become problematic?
- Above 40%: Immediate action required. You're likely losing money on this dish
- 35-40%: Too high for most concepts. Review your prices and portions
- 30-35%: Acceptable for many restaurants, but monitor closely
- Below 25%: Good, but verify you're not overpricing for your market
What does a high food cost mean?
A 40% food cost doesn't automatically spell disaster. You still have 60% remaining for staff, rent, utilities, and profit. But that 60% must cover everything else.
Impact calculation example:
You sell 50 steaks per week with 5% higher than optimal food cost:
5% of €29.36 = €1.47 per steak
50 × €1.47 = €73.50 per week
52 weeks = €3,822 per year loss
And that's just one dish!
How do you get back within the norm?
If your food cost runs too high, you have four options:
- Raise selling price: Most effective, but monitor the competition
- Cheaper ingredients: Possible, but don't sacrifice quality
- Smaller portions: Risk disappointing guests
- Remove dish from menu: If it can't be made profitable
Critical: Review supplier prices regularly. They often increase prices quietly while you don't update your menu. This causes food costs to creep upward.
Focus on your bestsellers
You don't need every dish to be perfect. Focus on your 5 best-selling dishes. If those hit the target, you've solved 80% of your problem.
Practical example: Bistro The Golden Spoon
Bistro owner Mark notices his profit margin declining. He analyzes his three most popular dishes:
Dish 1: Beef Burger (200 units/month)
Menu price: €16.95 incl. VAT (€15.55 excl. VAT)
Ingredient costs: €5.20
Food cost: 33.4% - Acceptable
Dish 2: Caesar Salad (150 units/month)
Menu price: €14.50 incl. VAT (€13.30 excl. VAT)
Ingredient costs: €5.85
Food cost: 44% - Too high!
Dish 3: Fish & Chips (100 units/month)
Menu price: €18.95 incl. VAT (€17.39 excl. VAT)
Ingredient costs: €4.80
Food cost: 27.6% - Excellent
Solution for the Caesar Salad:
Mark raises the price to €16.50 (€15.14 excl. VAT), bringing food cost down to 38.7%. Still high, but more manageable. Alternative: he replaces expensive parmesan with a cheaper option, saving €1.20 per portion.
Seasonal food cost planning
Smart restaurateurs anticipate seasonal fluctuations by:
- Summer menu: More emphasis on local, seasonal products (lower food cost)
- Winter menu: Greater use of preserved or frozen products
- Flexible menu: Daily specials based on market prices
- Supplier contracts: Fixed price agreements for main ingredients
After managing kitchen operations for nearly a decade, I've seen restaurants fail not because of obvious problems, but because of small percentage leaks that compound over time.
Common mistakes in food cost calculation
1. Calculating with VAT-inclusive prices
Many entrepreneurs compare ingredient costs with consumer prices including VAT. This creates a distorted picture and makes your food cost appear 9% lower than reality.
2. Forgetting 'hidden' ingredients
Oil, salt, spices, butter for the pan - small amounts often overlooked but can add 2-5% to food cost.
3. Not accounting for waste
Theoretical food cost differs from practice. Include 5-10% waste in calculations for a realistic picture.
4. Not checking frequently enough
Suppliers adjust prices, but many restaurants only review this during menu updates. Check main ingredients monthly at minimum.
5. Only looking at ingredient costs
Labor costs for preparation vary dramatically per dish. A salad requiring 10 minutes of prep needs different margins than a dish that arrives frozen.
Summary
A healthy food cost ranges between 25-35% for most restaurant concepts, but varies by business type. Always calculate food cost using prices excluding VAT and focus particularly on your bestsellers. Review supplier prices regularly and act decisively once food costs exceed 35%. Don't forget to include waste and seasonal fluctuations in your calculations. By monitoring systematically and making timely adjustments, you maintain food cost control and protect your profit margin.
How do you check if your food cost is within the norm? (step by step)
Calculate your ingredient costs per dish
Add up all costs: main ingredient, vegetables, sauce, oil, butter, garnish. Everything that goes on the plate. Use current purchase prices from your supplier.
Determine your selling price excluding VAT
Take the price from your menu and divide by 1.09 (for 9% VAT). A dish of €28.00 becomes €25.69 excl. VAT.
Calculate your food cost percentage
Divide your ingredient costs by your selling price excl. VAT and multiply by 100. For example: €8.50 / €25.69 × 100 = 33.1%.
Compare with the norm for your type of business
Check if your percentage falls within the common range for your concept. Above 35%? Then it's worth looking at price adjustment or portion size.
✨ Pro tip
Track your food cost variance weekly, not just the percentage. A 2% increase on a dish you sell 200 times monthly costs you €960 more per year than a 5% increase on a dish you sell 20 times monthly.
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Frequently asked questions
What if my food cost is higher than the norm but I'm still making profit?
Then you're fine. The norm is a guideline, not a law. If your total costs (including staff and rent) stay below your revenue, you're succeeding.
Should I include VAT in my food cost calculation?
No, always calculate with the selling price excluding VAT. The VAT you collect must be paid back to the government, so it's not your money.
Is a food cost of 20% always better than 30%?
Not necessarily. Too-low food cost can mean you're overpriced for your target market, or you're compromising quality. Find the balance between profitability and guest value.
📚 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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