I'll admit something most restaurant owners won't: I used to negotiate prices on everything equally, wasting hours on pennies while missing thousands in savings. ABC analysis changed that by showing me which 20% of ingredients actually matter for my bottom line.
What is ABC analysis?
ABC analysis splits your ingredients into three distinct groups:
- A-products: 20% of your ingredients, 80% of your purchasing value
- B-products: 30% of your ingredients, 15% of your purchasing value
- C-products: 50% of your ingredients, 5% of your purchasing value
Put your energy into A-products for maximum impact. A modest 3% discount on premium beef delivers more savings than slashing 25% off your spice budget.
💡 Example:
Restaurant with €50,000 annual purchasing:
- Meat & fish (A): €40,000 per year
- Dairy & oils (B): €7,500 per year
- Spices & garnish (C): €2,500 per year
5% discount on A-products = €2,000 savings
20% discount on C-products = €500 savings
Calculate the purchasing value per ingredient
Pull your purchasing data from the past 90 days. Calculate for each ingredient:
- Total kilos purchased
- Total amount spent
- Average price per kilo
Rank everything by total spend, highest first. Your top 20% become A-products automatically.
⚠️ Note:
Use real invoices, not menu costing estimates. What you actually paid matters more than what you planned to spend.
Negotiation strategy per category
A-products (your money makers):
- Get quotes from minimum 3 suppliers
- Negotiate prices, payment terms, and delivery schedules
- Consider bulk orders for volume discounts
- Monitor prices monthly
B-products:
- Review prices quarterly
- Bundle orders to reduce delivery fees
- Test alternative brands
C-products:
- Order smart (avoid tiny quantities)
- Prioritize convenience over price
- Price check twice yearly
💡 Negotiation example:
You buy €15,000 beef per year from supplier X:
- Current price: €18.50/kg
- Competitor offers: €17.80/kg
- Negotiate to: €17.50/kg
Savings: €1,000 per year on one ingredient
Calculate savings potential
Expected savings by category:
- A-products: 3-8% reduction achievable
- B-products: 2-5% reduction achievable
- C-products: 0-3% reduction achievable
For €50,000 annual purchasing:
- A-products (€40,000): 5% = €2,000 savings
- B-products (€7,500): 3% = €225 savings
- C-products (€2,500): 1% = €25 savings
Total annual savings: €2,250
Implementation in your kitchen
Make this system stick:
- Refresh your ABC categories every 6 months
- Create price alerts for A-products
- Maintain supplier contact database
- Document negotiation outcomes
From years of working in professional kitchens, I've seen too many chefs get bogged down tracking every ingredient equally. Tools like a food cost calculator help you spot which products deserve your attention and which don't.
How do you create an ABC analysis? (step by step)
Gather purchasing data from 3 months
Get all purchase invoices from the last 3 months. Make a list of all ingredients with total amount spent per ingredient. Add up different suppliers per ingredient.
Sort from high to low by value
Put all ingredients in order of total amount spent. Calculate the percentage of each ingredient relative to your total purchasing. The top 20% are your A-products.
Create categories and action plan
Divide into A (top 20%), B (next 30%) and C (remaining 50%). Focus your negotiations on A-products. Check B-product prices quarterly. C-products only when there are major price changes.
✨ Pro tip
Focus your first 30 days on just your top 3 A-products. Contact exactly 2 alternative suppliers for each and request formal quotes. Most restaurants save €200-500 monthly from this targeted approach alone.
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 ABC analysis?
Refresh your ABC analysis every 6 months minimum. Menu changes and seasonal shifts can bump ingredients between categories. What's a C-product in winter might become A-grade during peak season.
What if I only have one supplier for an A-product?
Start hunting for alternatives immediately. Network with other restaurant owners about their suppliers. Single-source A-products leave you vulnerable to price hikes and supply disruptions.
Can I apply ABC analysis to beverages too?
Absolutely, and you should. Premium wines and craft spirits often land in your A-category due to high per-unit costs. The same 80/20 rule applies to your bar program.
Should quality factor into my negotiation strategy?
Never sacrifice quality for price alone. Factor in yield rates, shelf life, and consistency. A pricier supplier might actually cost less if their products have better trim ratios and longer freshness windows.
📚 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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