Transparent supply chains are becoming increasingly popular - guests want to know where their food comes from and what it really costs. Calculating your margin becomes more complex when you need to include all costs in the chain, but it can also be a strong sales strategy. In this article you'll learn how to correctly calculate with transparent sourcing and what margin is realistic.
What does a transparent supply chain mean?
With transparent sourcing, you openly share information about your suppliers, purchase prices and sometimes even your margin with guests. This can be via your menu, website or verbally. Examples include: "Organic salmon from Zeeland Farm - purchase price €18/kg" or "Local beef from Farmer Janssen - €24/kg directly from the farm".
💡 Example transparent menu:
"Beef from Green Field Farm (€24/kg) with local potatoes from Northern Farmers Cooperative (€2.50/kg)"
Menu price: €32.00 - Guests immediately see the quality and origin.
Calculate your complete cost price including transparency
Transparent sourcing often means more expensive ingredients, but also extra costs for certification, traceability and communication. Add up all costs:
- Direct ingredient costs: what you pay your supplier
- Transparency costs: certification, extra administration, supplier visits
- Communication costs: time spent explaining to guests, menu updates
- Increased purchasing costs: smaller volumes, premium suppliers
💡 Calculation example:
Beef 200g from transparent supplier:
- Meat: 200g × €24/kg = €4.80
- Garnish and sauces: €2.20
- Transparency surcharge (certification, time): €0.50
Total cost price: €7.50
Determine your margin strategy with transparency
With transparent pricing you can go two ways: accept a lower margin because your story sells, or charge a higher margin because you prove quality. Many restaurants choose a middle ground.
Option 1: Lower margin, higher volume
Accept a food cost of 35-40% because guests appreciate the honesty and come back more often.
Option 2: Premium strategy
Maintain a food cost of 25-30%, but justify it with your story and quality.
⚠️ Note:
Transparency doesn't mean you have to give up your margin. Guests also pay for your cooking skills, ambiance, service and entrepreneurial risk.
Communicate your margin honestly
If you're transparent about sourcing, guests sometimes expect transparency about your margin too. Be honest but explain what they're paying for:
- "Our ingredients cost €8, the rest goes to the kitchen team, rent, energy and running the business"
- "We work with 30% food cost, so we can invest in quality and people"
- "Of every €30, €9 goes to ingredients, €21 goes to everything else that comes with it"
💡 Practical example:
Restaurant The Honest Kitchen shows on their menu:
"Salmon from Texel Farm (€18/kg) + organic vegetables from Green Garden (€4/kg) = €7.20 ingredients. Menu price €24.00 - food cost 30%"
Guests appreciate the openness and come back more often.
Use tools for accurate calculation
With transparent sourcing, precision is crucial - you can't afford calculation errors if guests can verify your numbers. A system like KitchenNmbrs helps you to:
- Track exact cost prices per dish
- Link supplier information to ingredients
- Automatically calculate margins when prices change
- Keep transparency information consistent
How do you calculate margin with transparent sourcing?
Gather all transparency costs
In addition to your ingredient costs, also add up: certification costs, extra administration, time for supplier visits and communication to guests. This 'transparency surcharge' is often 5-15% of your ingredient costs.
Calculate your total cost price including transparency
Cost price = ingredients + transparency surcharge + normal additional costs (oil, spices, garnish). Divide this by your selling price excl. VAT and multiply by 100 for your food cost percentage.
Choose your transparency strategy
Decide whether you accept a lower margin (35-40% food cost) for volume, or charge a premium price (25-30% food cost) justified by quality and your story. Test both strategies with different dishes.
✨ Pro tip
Start transparency with your 2-3 signature dishes. Test how guests react before you make your entire menu transparent. This way you build experience without major risk.
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 put my exact purchase prices on the menu?
No, that's not required. You can also provide general information like 'local supplier' or 'organically certified'. Full transparency is a choice, not an obligation.
What if my supplier raises their price during transparent communication?
Update your communication immediately and explain to guests that raw material prices fluctuate. Honesty about price changes actually strengthens your transparent image.
Can I charge higher prices if I'm transparent about sourcing?
Yes, transparency often justifies a premium. Guests are happy to pay more if they see you deliver quality and are honest about your methods.
How do I handle guests who think my margin is too high?
Explain what everything involves: rent, staff, energy, entrepreneurial risk. A restaurant is more than just ingredients - you're selling a complete experience.
What food cost is normal with transparent sourcing?
Due to higher purchasing costs, transparent food cost is often between 30-40%. That's higher than average, but is offset by customer loyalty and premium pricing.
📚 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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