Dishes with too high food cost drain your profits daily, yet most restaurant owners can't identify which menu items need immediate attention. The key is systematically analyzing each dish's profitability and prioritizing reforms based on actual financial impact. Here's how to pinpoint exactly which dishes require reformulation to boost your bottom line.
Why some dishes eat into your profits
Not all dishes are equally profitable. Some seem popular and sell well, but actually cost you money. This happens for several reasons:
- Ingredient prices have risen, but your menu price hasn't
- Your chef gives larger portions than you budgeted for
- Expensive ingredients are used too generously
- Cutting waste is higher than expected
⚠️ Note:
A dish with 40% food cost that you sell 100 times per week costs you approximately €2,600 per year extra compared to 30% food cost.
The 3-step analysis for reformulation
To determine which dishes need adjustment, work through this analysis:
Step 1: Calculate the current food cost of all dishes
For each dish, add up all ingredient costs and divide by the selling price excluding VAT.
💡 Example - Pasta Carbonara:
Menu price: €18.50 incl. VAT → €16.97 excl. VAT
- Pasta: €0.45
- Bacon: €1.80
- Eggs: €0.60
- Parmesan: €1.40
- Other (butter, pepper, oil): €0.35
Total ingredient costs: €4.60
Food cost: (€4.60 / €16.97) × 100 = 27.1%
Step 2: Identify problem dishes
Make a list of dishes that exceed your target percentage. From analyzing actual purchasing data across different restaurant types, these are common food cost targets:
- Fine dining: 28-32%
- Casual dining: 25-30%
- Bistro: 25-30%
- Fast casual: 22-28%
Step 3: Calculate the impact per dish
For each problem dish, calculate how much money you're losing annually.
💡 Example - Impact calculation:
Steak with 38% food cost (target: 30%)
- Selling price excl. VAT: €27.52
- Current ingredient costs: €10.46 (38%)
- Desired ingredient costs: €8.26 (30%)
- Difference per portion: €2.20
- Sales: 80 portions/month
Annual impact: €2.20 × 80 × 12 = €2,112
Reformulation strategies
Once you know which dishes are problematic, you have several options:
Option 1: Replace ingredients
- Replace expensive ingredients with cheaper alternatives
- Choose seasonal ingredients
- Find local suppliers for better prices
Option 2: Adjust portions
- Make the main ingredient slightly smaller
- Use more vegetables, less meat/fish
- Adjust garnishing
💡 Example - Portion adjustment:
Salmon from 180g to 160g:
- Savings: 20g × €32/kg = €0.64 per portion
- At 60 portions/month: €460 per year
- Food cost drops from 35% to 32%
Option 3: Raise the price
Sometimes the dish is fine, but the price is too low. Calculate what the minimum selling price should be:
Minimum price excl. VAT = Ingredient costs / (Desired food cost % / 100)
Prioritization: which dishes to tackle first
Address dishes based on impact:
- High food cost + high sales → Biggest impact, first priority
- Very high food cost + low sales → Consider removing from menu
- Moderate food cost + very high sales → Small adjustments, big impact
⚠️ Note:
Test adjustments on a small scale first. Guests notice big changes and it can damage your reputation.
Monitoring after reformulation
After making adjustments, you need to track whether it works:
- Calculate the new food cost after 2 weeks
- Check if sales remain the same
- Watch for complaints or comments from guests
- Measure the total impact on your monthly food cost
Food cost tracking systems help automate these calculations and monitor your cost per dish, so you can quickly see which adjustments are working.
How do you calculate which dishes need reformulation?
Calculate food cost of all dishes
For each dish, add up all ingredient costs. Divide this by the selling price excluding VAT and multiply by 100 for the percentage. Do this for at least your 10 best-selling dishes.
Identify dishes above target percentage
Make a list of dishes that are above your desired food cost (usually 25-32% depending on your type of business). Also note how many portions you sell per month.
Calculate annual impact per dish
For each problem dish: multiply the difference in euros per portion by the number of portions per month and by 12. This gives you the annual impact in euros.
Prioritize based on impact
Address dishes with the highest annual impact first. These are usually popular dishes with too high food cost. These give you the fastest payback.
Test and monitor adjustments
Implement changes gradually and measure the effect after 2-4 weeks. Check if the new food cost is correct and whether guests notice the change. You can always adjust further.
✨ Pro tip
Focus on your top 5 selling dishes first and calculate their exact food costs over the next 30 days. If these five items hit your target percentages, you'll solve roughly 70% of your profitability issues.
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
What food cost percentage is too high for reformulation?
This depends on your type of business. For most restaurants, above 35% is problematic. Fine dining can accept up to 32%, fast casual must stay below 28%. Anything above 40% needs immediate action.
Should I adjust popular dishes if their food cost is too high?
Yes, but carefully. Popular dishes with high food cost cost you the most money. Make small adjustments instead of major changes, and test on a small scale first.
How often should I recalculate food cost after supplier price changes?
At least every 3 months, or immediately after major supplier price changes. Many owners do this monthly to stay on top of their margins.
What if guests notice the change in the dish?
Communicate honestly about quality and seasonality. Small adjustments usually go unnoticed. For bigger changes, you can present it as a 'new version' or 'seasonal update'.
📚 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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