Picture this: your supplier's latest invoice shows beef prices jumped 15%, but your menu hasn't changed in months. You're slowly bleeding profit without even knowing it. Food costs creep from 30% to 40% while you focus on everything else, and suddenly your margins vanish.
Collect the current food costs of all ingredients
First, grab your latest supplier invoices and update ingredient prices. You need the real numbers - current purchase prices per kilo, liter, or unit.
💡 Example:
Entrecote beef per kilo:
- January 2024: €28.50/kg
- Now (March 2024): €32.80/kg
- Increase: 15.1%
Impact: each 200g portion now costs €0.86 more
Work through your inventory systematically. Focus on your top 20 ingredients first - typically meat, fish, olive oil, butter, and frequently used vegetables. These drive most of your food costs anyway.
Calculate the new food cost per dish
Add up every ingredient cost for each dish using updated prices. Don't skip the garnishes, sauces, or that splash of olive oil. From years of working in professional kitchens, I've seen too many restaurants forget these "small" costs that add up fast.
💡 Example food cost for beef steak:
Ingredients per portion:
- Entrecote 200g: €6.56 (was €5.70)
- Potatoes 150g: €0.45
- Vegetable mix: €1.20
- Butter/oil: €0.35
- Spices/salt: €0.15
New food cost: €8.71 (was €7.85)
Use this formula: Food cost = sum of all ingredients per portion. But here's the key - calculate with the exact quantities your chef actually uses, not what's written in the recipe book.
Calculate the new food cost percentage
Divide your new food cost by current selling price (excluding VAT), then multiply by 100. Simple math, but crucial for your bottom line.
Formula: Food cost % = (Food cost / Selling price excl. VAT) × 100
💡 Example calculation:
Beef steak on menu: €32.00 incl. 9% VAT
- Selling price excl. VAT: €32.00 / 1.09 = €29.36
- New food cost: €8.71
- New food cost: (€8.71 / €29.36) × 100 = 29.7%
Was: (€7.85 / €29.36) × 100 = 26.7%
⚠️ Note:
Always calculate with the price excluding VAT. The price on your menu includes 9% VAT for food.
Determine which dishes need repricing
List every dish where food cost exceeds 35%. These dishes are quietly draining your profits.
- 25-30%: Healthy margin, leave it alone
- 30-35%: Acceptable, but watch closely
- 35-40%: Needs repricing or cost reduction
- 40%+: Losing money fast, fix immediately
Prioritize your bestsellers. If you're selling that beef steak 50 times weekly and losing €1 per portion, you're hemorrhaging €2,600 annually.
Calculate the new selling price
For dishes needing repricing, calculate the minimum selling price that'll give you healthy margins.
Formula: Minimum selling price excl. VAT = Food cost / (Desired food cost % / 100)
💡 Example recalculation:
For 30% food cost at €8.71 food cost:
- Minimum price excl. VAT: €8.71 / 0.30 = €29.03
- Minimum price incl. VAT: €29.03 × 1.09 = €31.64
- Rounded: €32.50
New food cost: 29.2%
Always round to sensible amounts. €31.64 becomes €32.50 or €33.00. Customers find €32.50 more palatable than odd numbers like €31.95.
Plan the implementation of new prices
Roll out price changes strategically. Never shock customers by raising everything at once - spread increases over 2-3 months instead.
- Month 1: Raise your 3 most expensive dishes
- Month 2: Adjust popular dishes in small increments
- Month 3: Handle remaining dishes
⚠️ Note:
Never raise more than 10-15% at once. Guests notice big jumps and may stop coming.
Don't announce price changes. Just print fresh menus. Most customers won't spot small increases of €1-2.
How do you calculate which dishes need repricing? (step by step)
Update all ingredient prices
Check your latest invoices and note the current purchase prices of your top 20 ingredients. Pay special attention to meat, fish, and other expensive products that often increase in price.
Calculate new food cost per dish
Add up all ingredient costs based on current prices. Don't forget garnishes, sauces, and oil - everything that goes on the plate counts.
Calculate new food cost percentage
Divide the new food cost by your current selling price (excl. VAT) and multiply by 100. Dishes above 35% food cost need repricing.
Determine new selling price
Use the formula: food cost divided by desired food cost percentage. For 30% food cost you divide by 0.30. Don't forget to add 9% VAT for the menu price.
Plan phased implementation
Don't raise all prices at once. Start with your most expensive dishes and spread increases over 2-3 months. Keep increases under 15% at a time.
✨ Pro tip
Track your 8 bestselling dishes every 6 weeks. If these maintain healthy food costs, roughly 75% of your revenue stays profitable. Master these top performers before worrying about every single menu item.
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 check my food costs?
Every 3 months minimum, or immediately after major supplier price hikes. For volatile items like fish or seasonal vegetables, monthly checks work better.
What if my food cost hits 40% or higher?
You're bleeding money on that dish. Raise the price immediately or cut portions. For popular items, you can increase prices gradually over 2 months to avoid customer shock.
Should I reprice all dishes simultaneously?
Never. Spread price changes across 2-3 months. Start with your priciest dishes and work downward. Customers notice gradual increases much less than sudden jumps across the entire menu.
How do I tell customers about price increases?
You don't. Simply print new menus without fanfare. Small increases of €1-2 go mostly unnoticed, but big jumps definitely don't.
Can I reduce portion sizes instead of raising prices?
Absolutely. A 10% smaller portion equals a 10% price increase mathematically. But be subtle - if customers notice they're getting less food, they'll feel cheated.
What if my competitors keep their prices unchanged?
Increase gradually and emphasize quality and service. Customers will pay more for superior experience and atmosphere. Don't sell at a loss just to match competitor 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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