Nearly 70% of restaurants fail within five years, often because owners guess their food costs instead of calculating them. Many restaurant owners estimate their ingredient costs, which causes them to lose money unknowingly on every dish. Here's how to calculate exactly what each dish costs and track this systematically.
Why guessing your food cost drains your profits
You think your steak costs about €8 in ingredients. But it's actually €11.50. At 50 steaks per week, you're bleeding €9,100 per year without realizing it.
⚠️ Watch out:
Guessing your food cost is the fastest way to let your profit leak away. Every euro you underestimate, you lose on every portion sold.
Gather all ingredients and their prices
Start with your most popular dish. Literally put everything on the table that goes into it:
- Main ingredient (meat, fish, vegetables)
- Garnishes and side dishes
- Sauces and dressings
- Oil, butter, salt, pepper
- Garnish and spices
Find the purchase price of each ingredient. Check your latest invoice or call your supplier directly.
💡 Example:
Pasta carbonara ingredients:
- Pasta: €2.40/kg
- Bacon: €8.50/kg
- Eggs: €0.25/piece
- Parmesan: €18.00/kg
- Cream: €1.80/liter
Calculate the exact amount per portion
Measure or weigh everything that goes into one portion. No estimates - exact grams and milliliters only. After managing kitchen operations for nearly a decade, I've learned that precision here makes or breaks your margins.
💡 Example:
Pasta carbonara per portion:
- Pasta: 120g = €0.29
- Bacon: 80g = €0.68
- Eggs: 2 pieces = €0.50
- Parmesan: 25g = €0.45
- Cream: 75ml = €0.14
Total cost price: €2.06
Factor in cutting loss and waste
Don't calculate with just the usable part - calculate with what you actually pay for. With meat and fish, you often lose 20-50% due to bones, skin, and cutting waste.
⚠️ Watch out:
You buy salmon for €18/kg, but due to cutting loss you're actually paying €32/kg for the fillet. Calculate with €32, not €18.
Calculate your food cost percentage
Use this formula: Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
Note: always calculate with the price excluding VAT. The price on your menu includes 9% VAT.
💡 Example:
Pasta carbonara calculation:
- Ingredient costs: €2.06
- Menu price: €16.50 incl. VAT
- Price excl. VAT: €16.50 / 1.09 = €15.14
Food cost: (€2.06 / €15.14) × 100 = 13.6%
Track your numbers systematically
Record everything in a system you can update easily. Excel works, but an app automatically calculates your food cost when prices change.
- Update prices monthly
- Check your 5 most popular dishes weekly
- Adjust menu prices if food cost exceeds 35%
From guessing to control in 30 days
Start with your 3 most popular dishes. Calculate the exact cost price. Update your system every month. After 30 days, you'll know exactly where your profit comes from.
How do you calculate exact food cost? (step by step)
Gather all ingredients and purchase prices
Lay all ingredients of one dish on the table. Look up the exact purchase price of each ingredient on your latest invoice or from your supplier.
Measure the exact amount per portion
Weigh or measure everything that goes into one portion. No estimates, but grams and milliliters. Include cutting loss and waste in your costs.
Calculate food cost percentage with the formula
Use the formula: (Ingredient costs / Selling price excl. VAT) × 100. Note: always calculate excluding VAT for accurate food cost.
✨ Pro tip
Calculate your top 3 dishes within the next 72 hours - don't wait until next week. These dishes represent 60-80% of your sales, so getting them right fixes most of your profit leaks 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
Do I really have to weigh everything, including salt and pepper?
Yes, everything counts. A teaspoon of salt might cost only 2 cents, but at 1,000 portions per month that's €20. Small amounts add up quickly.
How often should I recalculate my food cost?
Check your 5 most popular dishes weekly and update all prices monthly. Suppliers raise their prices regularly, often without you noticing.
What if my food cost is higher than 35%?
Then you're probably losing money on that dish. You can adjust the ingredients, reduce the portion size, or raise the selling price.
Why calculate excl. VAT and not incl. VAT?
Because VAT isn't yours — you pass it on to the tax authorities. If you calculate with incl. VAT, your food cost looks lower than it actually is.
📚 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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