Picture this: you're spending as much time negotiating the price of salt as you do on your premium beef cuts. An ABC analysis fixes this by helping you focus on ingredients that actually impact your bottom line. You'll categorize purchases by value, not volume, so your attention goes where it matters most.
What is an ABC analysis?
ABC analysis splits your ingredients into three tiers based on their financial impact:
- 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
The strategy's simple: pour your energy into A-products since they control your costs.
? Example:
Restaurant with €8,000 monthly purchasing:
- A-products: meat, fish, premium ingredients - €6,400 (80%)
- B-products: vegetables, dairy, oils - €1,200 (15%)
- C-products: spices, garnish, small items - €400 (5%)
Focus on those A-products: that's where your profit or loss is.
Why do an ABC analysis?
Most kitchen managers discover too late that they've been treating a €2 spice order with the same urgency as their €800 protein delivery. That's backwards.
ABC analysis changes your approach:
- You negotiate harder with A-suppliers
- You monitor A-products weekly for price shifts
- You track A-inventory more precisely
- You automate C-product orders
⚠️ Note:
ABC analysis ranks by purchasing value, not usage frequency. Even if you use salt daily, it stays C-category due to low cost.
How do you calculate the categories?
You'll need these numbers for each ingredient:
- Monthly purchasing value: unit price × monthly quantity
- Percentage of total: ingredient cost ÷ total monthly purchasing × 100
- Cumulative percentage: running total as you add each item
? Example calculation:
Beef in your restaurant:
- Price: €32/kg
- Usage: 25 kg/month
- Monthly value: €32 × 25 = €800
- At €8,000 total: €800 ÷ €8,000 × 100 = 10%
This qualifies as an A-product.
Practical application per category
A-products (daily attention):
- Track prices weekly
- Secure annual contracts
- Maintain precise inventory records
- Research alternatives if costs spike
- Enforce strict quality standards
B-products (weekly review):
- Monitor prices monthly
- Use reliable suppliers
- Apply standard inventory controls
C-products (monthly check):
- Buy in bulk for discounts
- Order less frequently
- Minimize time investment
? Result:
Dedicating 80% of your purchasing time to 20% of your products (the A's) gives you real control over major cost drivers. A 10% A-product price jump hurts far more than doubling your C-product costs.
Maintaining your ABC analysis
Refresh this analysis every 3-6 months. Products shift categories because of:
- Seasonal price swings
- Menu modifications
- Supplier pricing updates
- Changing dish popularity
Food cost management tools like KitchenNmbrs can automatically process your purchasing data and highlight which ingredients deserve your closest attention.
How do you create an ABC analysis? (step by step)
Gather all purchasing data from the past 3 months
Make a list of all ingredients with their monthly purchasing value. Calculate price × quantity per month for each product. Use invoices or your purchasing system.
Calculate the percentage per ingredient
Divide the monthly value of each ingredient by your total monthly purchasing × 100. Sort the list from highest to lowest percentage. The largest percentages are now at the top.
Divide into A, B and C categories
Count from top to bottom until you reach 80% (those are your A-products). The next 15% are B-products, the last 5% are C-products.
✨ Pro tip
Identify your top 3 A-products and negotiate 6-month price locks with those suppliers by next Friday. These three ingredients likely control 40-50% of your total food costs.
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 an ABC analysis?
What if I have too many C-products cluttering my orders?
Should I always choose the cheapest supplier for A-products?
Can an ingredient move between categories over time?
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
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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