What's the risk if you don't know your food costs?

Why food costs matter so much

Your food cost determines if you make or lose money on each dish. Without this knowledge, you're gambling with your business and hoping for the best.

The biggest risks at a glance

Risk 1: Prices too low

Without food cost knowledge, you often set prices way too low. You think you're profitable, but you're actually bleeding money with every order.

• You underestimate ingredient costs
• You forget garnishes, sauces, and oil
• You don't account for trimming loss
• You don't adjust prices after purchasing costs rise

Risk 2: Wrong menu choices

Without food cost knowledge, you might be promoting dishes that barely generate profit. You're steering guests toward your worst performers.

Risk 3: No control over supplier price increases

Suppliers regularly raise their prices. Without food cost monitoring, you notice this too late and fall behind for months.

• Meat prices rose an average of 12-18% in 2023
• Fish became 15-25% more expensive
• Dairy increased by 8-15%

The financial impact in numbers

Scenario 1: Food cost 5% too high

If your food cost hits 35% instead of 30%, you lose serious money:

• At €300,000 sales: €15,000 per year
• At €500,000 sales: €25,000 per year
• At €800,000 sales: €40,000 per year

Scenario 2: One dish consistently mispriced

How food cost ignorance develops

Common thinking mistakes

• "I roughly know what it costs" - Estimates are often 20-40% too low
• "We're doing well, so it must be right" - Sales say nothing about profit per dish
• "My chef keeps an eye on it" - Chefs aren't food cost experts
• "Excel is too much work" - So you don't do it at all

Practical obstacles

Many entrepreneurs want to track food costs, but struggle with:

• No time for complicated calculations
• Supplier invoices are unclear
• Trimming loss is hard to estimate
• Recipes aren't centralized anywhere
• Price changes get forgotten

The solution: systematic food cost management

What you need to know at minimum

For each dish on your menu:

• Exact ingredient list with quantities
• Current purchasing prices per ingredient
• Trimming loss percentage
• Total food cost per portion
• Food cost percentage

How often should you check?

From years of working in professional kitchens, I've seen the most successful operations follow this schedule:

• Weekly: Your 5 best-selling dishes
• Monthly: All dishes on your menu
• With every invoice: Check if prices have risen
• For new dishes: Calculate food cost before launch

Practical first steps

You don't need to tackle everything at once. Start with these basics:

1. Choose your top 3 dishes - The ones you sell the most
2. List all ingredients - Don't forget garnishes and sauces
3. Find your recent invoices - What do you actually pay per kilo/liter?
4. Calculate the food cost - Including trimming loss
5. Check your food cost percentage - Below 35%? Then you're good

A food cost calculator automates this process, so you don't have to recalculate every time. But the most important thing is that you start tracking your food costs at all.

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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

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