Quarterly price reviews of purchase prices make cost calculations tricky. Your chef is calculating with old prices while suppliers have already become 10% more expensive. In this article you'll learn how to set up a system to always work with current prices.
Why quarterly prices disrupt your cost price
Many suppliers review their prices every 3 months. Meat, fish and vegetables fluctuate the most. The problem: your recipes and cost prices stay the same, while your purchasing becomes more expensive.
💡 Example:
Your steak recipe from January:
- Entrecote 250g: €6.25 (€25/kg)
- Garnish: €2.10
- Total ingredients: €8.35
April price review: entrecote becomes €29/kg
New cost price: €9.35 (+€1.00 per portion)
With 50 steaks per week you lose €2,600 per year if you don't update.
The 3-price system for stable cost prices
Work with three prices per ingredient to absorb fluctuations:
- Current price: what you pay now
- Average price: average of last 4 quarters
- Worst-case price: highest price from past year + 10%
For cost price calculation use the worst-case price. Then you're always safe.
💡 Example salmon:
Price progression over the past year:
- Q1: €22/kg
- Q2: €26/kg
- Q3: €24/kg
- Q4: €28/kg
Average: €25/kg
Worst-case for cost price: €30.80/kg (€28 + 10%)
Automatic price update routine
Set up a system that checks your prices every month:
- Week 1 of every month: check invoices from previous month
- Note deviations: which products are 5%+ more or less expensive?
- Update cost prices: adjust recipes with new prices
- Check menu: do selling prices need to go up too?
⚠️ Note:
Never update all prices at once. Choose your 3 most expensive ingredients and start there. This keeps it manageable.
Seasonal compensation in your cost price
Some products are predictably more expensive in certain months. Build a buffer for that:
- Asparagus: out of season 200-300% more expensive
- Shellfish: Christmas/New Year 30-50% more expensive
- Lamb: around Easter 20-40% more expensive
Calculate with peak season prices for your cost price, even if you buy it cheaper.
💡 Example asparagus season:
Dutch asparagus cost price:
- April-June (season): €8/kg
- Rest of year: €24/kg
Always calculate with €24/kg in your cost price
During season you make extra margin, outside season you're covered
Digital vs manual tracking
Manual price lists in Excel quickly become outdated. With 50+ ingredients it becomes unmanageable. Many entrepreneurs use an app like KitchenNmbrs to maintain prices centrally and have cost prices recalculated automatically.
The advantage: change one ingredient price, and all recipes with that ingredient are automatically updated. This way you immediately see which dishes become more expensive and whether you need to adjust your menu prices.
How do you calculate purchase price per portion with quarterly price reviews?
Collect price history per ingredient
Go through your invoices from the last 12 months. Note the price per kg/liter for each main ingredient per quarter. Focus first on your 10 most expensive ingredients.
Calculate worst-case price per ingredient
Take the highest price from the past year and add 10% to it. This becomes your calculation price for cost price calculations. This way you're always on the safe side.
Update cost price per recipe
Recalculate the cost price of each dish with the new worst-case prices. Divide the total ingredient costs by your selling price excl. VAT for your food cost percentage.
Check your food cost and menu prices
If your food cost comes above 35%, you need to raise your menu price or adjust your recipe. Calculate your new minimum price: cost price divided by desired food cost.
Set up monthly check routine
Schedule 30 minutes every first week of the month to check invoices for price changes. Immediately update your cost prices if an ingredient changes 5% or more.
✨ Pro tip
Check your 3 best-selling dishes every month on food cost. If those are under control, you have 70% of your profitability under control.
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
How often should I update my cost prices?
Check your invoices monthly for price changes of 5% or more. Update your cost prices immediately then. For smaller changes you can wait until the quarter is over.
Should I track all ingredients or only the main ones?
Start with your 10 most expensive ingredients that make up 80% of your food cost together. Spices and small ingredients fluctuate less and have less impact on your total cost price.
What if my supplier doesn't have fixed quarterly dates?
Create your own monthly overview and group by 3 months. It's about the trend, not exact quarter dates. The important thing is that you notice price fluctuations.
How do I prevent becoming too expensive by using worst-case prices?
Calculate with worst-case for cost price, but buy smart. During cheap periods you make extra margin. You need that buffer for expensive periods.
Can I make contract agreements to limit price fluctuations?
Large suppliers sometimes offer fixed prices for 6-12 months for a small premium. For small businesses this rarely pays off because you lose flexibility with other suppliers.
📚 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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