Food cost and cost price aren't the same thing - one's a percentage, the other's a euro amount. Learn how to use both figures to maximize your restaurant profits.
A chef I know was selling his signature burger for €12 while spending €8 on ingredients - he thought he was making money until he realized his 67% food cost was bleeding profits. Cost price is the actual euro amount you spend on ingredients, while food cost is the percentage of your selling price those ingredients represent. Master both, and you'll spot profit leaks before they drain your cash flow.
What is cost price?
Cost price is the actual euro amount you pay for every ingredient in one dish. Nothing more, nothing less.
- All main ingredients
- Garnishes and side dishes
- Sauces and dressings
- Oil, butter, herbs
- Everything that goes on the plate
💡 Cost price example:
Pasta carbonara ingredients:
- Pasta: €0.45
- Bacon: €1.20
- Egg: €0.30
- Parmesan: €0.80
- Cream: €0.25
- Herbs/oil: €0.10
Cost price: €3.10
What is food cost?
Food cost is a percentage that shows how much of your selling price goes straight to ingredients. Think of it as your profit efficiency meter.
Formula: Food cost % = (Cost price / Selling price excl. VAT) × 100
💡 Food cost example:
Same pasta carbonara:
- Cost price: €3.10
- Selling price: €16.50 incl. VAT
- Selling price excl. VAT: €15.14
Food cost: (€3.10 / €15.14) × 100 = 20.5%
⚠️ Note:
Always calculate food cost using the selling price EXCLUDING VAT. Your menu shows prices with 9% VAT included.
Why both figures matter
Cost price and food cost reveal different profit insights - something I've seen from years of working in professional kitchens where managers focus on just one number:
- Cost price: Guides purchasing decisions and recipe development
- Food cost: Determines if your selling prices make sense
- Cost price: Compares raw ingredient expenses
- Food cost: Reveals which dishes actually make money
💡 Comparison example:
Comparing two dishes:
- Steak: cost price €12, food cost 35%
- Pasta: cost price €3.10, food cost 20.5%
The pasta wins on both fronts - lower ingredient cost AND better profit margin.
When do you use which figure?
Use cost price for:
- Recipe development
- Supplier comparisons
- Purchase negotiations
- Portion size decisions
Use food cost for:
- Menu pricing strategy
- Profitability analysis
- Menu engineering
- Margin optimization
⚠️ Note:
Low cost price doesn't guarantee good food cost. Your selling price determines the final profitability.
Track both figures automatically
Manual calculations eat time and create errors. Food cost management systems show both figures instantly:
- Automatic cost price calculations per recipe
- Real-time food cost percentages
- Automatic updates when supplier prices change
- Complete dish overview on one dashboard
You'll maintain control over both metrics without daily number-crunching.
How do you calculate cost price and food cost? (step by step)
Calculate the cost price
Add up all ingredient costs together. Don't forget the garnishes, sauces, oil and herbs. This gives you the cost price in euros per portion.
Determine the selling price excluding VAT
Divide your menu price by 1.09 to get the price excluding 9% VAT. For example: €16.50 / 1.09 = €15.14 excluding VAT.
Calculate the food cost percentage
Divide the cost price by the selling price excluding VAT and multiply by 100. For example: (€3.10 / €15.14) × 100 = 20.5% food cost.
✨ Pro tip
Track the food cost percentage of your 4 highest-volume appetizers every Monday at 10 AM. These small plates often hide massive profit leaks because portion creep goes unnoticed.
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 VAT in my cost price calculation?
No, cost price only covers ingredient expenses. VAT isn't part of your purchasing costs, so exclude it from cost price. Always calculate food cost using selling price excluding VAT.
What's a profitable food cost percentage?
Most successful restaurants target 28% to 35% food cost. Above 35%, you'll struggle to cover labor, rent, and other expenses while maintaining decent profit margins.
Can a dish have low cost price but terrible food cost?
Absolutely. A €2 salad sold for €6 has 33% food cost, while the same salad at €8 drops to 25% food cost. Selling price determines your final profitability, not just ingredient cost.
How do seasonal price fluctuations affect my calculations?
Seasonal ingredients can swing your cost price by 30-50% throughout the year. Smart operators adjust portions or temporarily substitute ingredients rather than constantly changing menu prices.
Which metric should I prioritize: cost price or food cost?
Both serve different purposes and you need both. Cost price guides your purchasing and recipe decisions, while food cost determines if your pricing strategy actually generates profit.
How often should I recalculate these numbers?
Check your top 5 dishes weekly, and recalculate everything monthly. Ingredient prices shift constantly, and outdated numbers lead to profit erosion you won't notice until it's too late.
📚 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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