A food cost analysis calculates what percentage of each menu price goes to ingredients. Focus on your top 10 sellers first, aim for 28-35% food cost, and recheck monthly since supplier prices change constantly. Fix expensive dishes by raising prices, reducing portions, or swapping ingredients.
Most restaurant owners can't tell you if their signature dish makes money or bleeds profit. A food cost analysis reveals exactly what percentage of each menu price disappears into ingredients. You'll spot which dishes drain your cash flow and which ones actually pay the bills.
What is a food cost analysis?
A food cost analysis breaks down each dish on your menu to show the exact percentage that goes toward ingredients. Think of it as an X-ray for your profitability — suddenly you can see which dishes work and which ones quietly drain your bank account.
💡 Example analysis:
Ribeye steak menu €32.00 (incl. 9% VAT):
- Selling price excl. VAT: €29.36
- Ingredients total: €11.20
- Food cost: 38.1%
This dish loses money - the food cost is too high.
Which dishes do you analyze?
Don't overwhelm yourself trying to calculate every single item. Start with the dishes that actually matter to your bottom line.
- Top 10 best-selling dishes: These control your profit margins
- Expensive main courses: Meat and fish dishes often hide surprising costs
- Signature dishes: The ones your reputation depends on
- Daily specials: You often price these on gut feeling
How do you calculate food cost per dish?
For each ingredient, multiply the quantity by its price per unit. And yes, that means everything — the garnish, the sauce, even that pat of butter matters.
💡 Example calculation pasta carbonara:
Ingredients per portion:
- Pasta: 120g × €3.20/kg = €0.38
- Pancetta: 80g × €18.50/kg = €1.48
- Eggs: 2 pieces × €0.25 = €0.50
- Parmesan: 30g × €24.00/kg = €0.72
- Other (butter, pepper, oil): €0.35
Total ingredient costs: €3.43
The food cost formula is: (Ingredient costs / Selling price excl. VAT) × 100
⚠️ Note:
Always calculate with the selling price EXCLUDING VAT. Your menu shows prices with 9% VAT included. Divide by 1.09 to get the actual selling price.
What are healthy food cost percentages?
Restaurant food costs typically run between 28% and 35%, but this shifts based on what you're serving and how you operate.
- Meat and fish: 30-35% (premium ingredients command higher costs)
- Pasta and vegetarian: 20-28% (ingredients cost less)
- Pizza: 18-25% (dough and cheese are cheap)
- Salads: 25-32% (depends heavily on proteins and toppings)
Here's a pattern we see repeatedly in restaurant financials: owners underestimate protein costs and overestimate vegetable expenses. The reverse is usually true.
What do you do with the results?
Once you know which dishes cost too much, you've got three moves to fix them:
- Raise the price: Works best for popular dishes customers already love
- Reduce the portion: Cut ingredient quantities without changing the recipe
- Replace ingredients: Swap expensive items for cheaper alternatives
💡 Example improvement:
Fix ribeye with 38.1% food cost:
- Option 1: Raise price to €36.00 → food cost drops to 32.8%
- Option 2: Reduce portion from 250g to 220g → food cost becomes 33.5%
- Option 3: Switch to cheaper cut → food cost hits 31.2%
How often should you analyze?
Run a complete menu analysis 2-3 times per year. But your top sellers need monthly check-ups since supplier prices shift constantly.
Smart operators track this automatically so they catch price creep before it kills their margins.
How do you do a food cost analysis? (step by step)
Make a list of your top 10 dishes
Start with your best-selling dishes. These have the biggest impact on your profit. Grab your POS system and see which dishes are sold most often.
Gather all ingredients and prices per dish
Write down all ingredients for each dish, including garnishes, sauces and oil. Look up the purchase prices from your suppliers. Don't forget anything - even the parsley on the plate costs money.
Calculate the ingredient costs per portion
Multiply quantity × price per unit for each ingredient. Add everything up for the total ingredient costs per portion. Watch out for trim loss on meat and fish.
Calculate the food cost percentage
Divide the ingredient costs by your selling price excluding VAT, times 100. Menu price €20.00 incl. VAT becomes €18.35 excl. VAT (divide by 1.09).
Analyze the results and make an improvement plan
Dishes above 35% food cost are costing you money. Determine per dish whether you raise the price, reduce the portion, or use cheaper ingredients.
✨ Pro tip
Calculate your 5 highest-revenue dishes during your slowest hour tomorrow. If any hit 36% food cost or higher, you're losing €300-500 monthly on just those items.
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
Do I need to analyze all 50 dishes on my menu?
No, start with your top 10 best-selling dishes. These determine 80% of your profit. You can tackle the rest later when you have time.
What if my food cost is above 35%?
You're probably losing money on that dish. Raise the price, reduce the portion, or find cheaper ingredients. Don't ignore it — high food costs compound quickly.
Should I include VAT in my calculation?
Never include VAT in food cost calculations. Always use the selling price excluding VAT. Your menu price includes 9% VAT, so divide by 1.09 first.
How do I handle trim loss on meat and fish?
Calculate using the actual price after trim loss. Whole salmon at €18/kg becomes €32/kg fillet after 45% waste. Use that €32/kg in your calculations.
Can't I just estimate what dishes cost?
Estimates are usually wrong by 15-30%. Small ingredients add up, and trim loss calculations often miss the mark. Exact numbers prevent expensive surprises.
What about seasonal price fluctuations?
Build a 10-15% buffer into seasonal ingredients like seafood and produce. Check these items monthly during peak fluctuation periods to avoid margin erosion.
How do I factor in waste from prep and cooking?
Add 5-8% to your raw ingredient costs for normal prep waste. Higher for complex dishes or inexperienced cooks. Track actual waste for two weeks to get your real number.
📚 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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