New regulations can mandate sustainable packaging, which increases your packaging costs. For delivery businesses, this means a direct impact on your margin per order. You'll calculate exactly how much this costs you and how to pass it on.
What is the margin impact of sustainable packaging?
Margin impact is the difference between your current packaging costs and the new costs of sustainable alternatives, expressed as a percentage of your average order value.
If regulations mandate sustainable packaging, your costs per order go up. This directly eats into your profit margin.
💡 Example:
Your current packaging costs €1.20 per order:
- Container: €0.40
- Lid: €0.25
- Bag: €0.35
- Cutlery: €0.20
Sustainable variant costs €2.10 per order.
Extra costs: €0.90 per order
Calculate the cost increase per packaging component
Create an overview of all packaging materials you use. Compare the current price with sustainable alternatives.
Main components for delivery:
- Main packaging: containers, boxes, bowls
- Closures: lids, tape, stickers
- Carry bags: plastic vs. paper/cardboard
- Cutlery and napkins: plastic vs. wood/cardboard
- Extras: sauce containers, cups, straws
⚠️ Note:
Use your actual purchase prices, not catalog prices. Large buyers often get discounts that reduce the impact.
Calculate impact on your average order value
You calculate the margin impact as a percentage of your average order value (AOV). This shows you directly how many percentage points of margin you lose.
Formula: Margin impact % = (Extra packaging costs / AOV excl. VAT) × 100
💡 Example calculation:
Your situation:
- Extra packaging costs: €0.90
- Average order value: €28.50 incl. VAT
- AOV excl. VAT: €28.50 / 1.09 = €26.15
Margin impact: (€0.90 / €26.15) × 100 = 3.4%
You lose 3.4 percentage points of margin per order.
Calculate the annual impact
Multiply the extra costs per order by your number of orders per year. This shows you the total financial impact.
Formula: Annual impact = Extra costs per order × Number of orders per year
💡 Annual calculation:
At 50 orders per day, 6 days per week:
- Orders per year: 50 × 6 × 52 = 15,600
- Extra costs per order: €0.90
Annual impact: €0.90 × 15,600 = €14,040
Options to offset the impact
You have three main options to compensate for the extra costs:
- Price increase: Raise your menu prices
- Increase delivery fees: Pass packaging costs through in delivery charges
- Improve efficiency: Increase your average order value
⚠️ Note:
Check if your competitors face the same cost increase. If everyone has to switch, you can raise prices more easily without losing customers.
Passing costs through in your menu price
If you want to pass the extra packaging costs through in your menu prices, distribute the costs across your dishes based on popularity. From tracking this across dozens of restaurants, popular dishes can absorb more extra costs than slow-movers.
💡 Pass-through example:
Distribute €0.90 extra packaging costs:
- Popular main course: +€0.50
- Side dishes: +€0.25
- Drinks: +€0.15
Average order absorbs the €0.90 this way
How do you calculate the margin impact of sustainable packaging?
Inventory your current packaging costs
Make a list of all packaging materials per order with exact purchase prices. Add everything up: containers, lids, bags, cutlery, napkins and sauce containers.
Look up prices for sustainable alternatives
Request quotes for sustainable versions of all your packaging materials. Pay attention to minimum order quantities and any discounts for larger volumes.
Calculate the difference per order
Subtract your current packaging costs from the new costs. This gives you the extra costs per order that impact your margin.
Calculate the impact as a percentage of your order value
Divide the extra costs by your average order value (excl. VAT) and multiply by 100. This shows you how many percentage points of margin you lose.
Determine your compensation strategy
Choose whether to pass the costs through via price increases, higher delivery fees, or by increasing your average order value with suggestive selling.
✨ Pro tip
Calculate margin impact for 3 different sustainable packaging suppliers over a 30-day test period. Price differences between eco-friendly suppliers can vary by 40-60%, directly affecting your ability to maintain profitable margins.
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 have to pass through the extra packaging costs completely?
Not necessarily. You can also choose to absorb part of it if your margin allows. Just check what your competitors are doing to stay competitive.
Can I let customers choose between cheap and sustainable packaging?
If sustainable packaging becomes legally mandatory, you won't have a choice. Until then, you can offer it as an option, but this makes your operations more complex.
Are there subsidies for switching to sustainable packaging?
Sometimes municipalities or provinces offer temporary subsidies. Check with your local government or Chamber of Commerce. Don't count on it for your long-term planning.
How do customers react to price increases due to sustainable packaging?
Communicate clearly why you're raising prices. Many customers accept this if it's for environmental reasons, especially if all restaurants have to do it.
📚 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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