Your food costs as a percentage of your revenue show how much of every euro in sales goes to ingredients. This percentage gives direct insight into your profitability and helps you manage your margins. In this article you'll learn step-by-step how to calculate this and what a healthy percentage is.
What are total food costs?
Total food costs are all amounts you pay for ingredients in a given period. This includes:
- Meat, fish and vegetarian proteins
- Vegetables and fruit
- Dairy and eggs
- Dry goods (rice, pasta, spices)
- Beverages (soft drinks, wine, beer)
- Oils, butter and other cooking products
⚠️ Note:
Only count ingredients, not packaging, cleaning supplies or other operational costs.
The formula for food cost percentage
You calculate the food cost percentage as follows:
Food cost percentage = (Total food costs / Total revenue) × 100
Use your revenue excluding VAT for an accurate picture of your margin.
💡 Example:
Restaurant De Smaak has in March:
- Total revenue: €45,000 (incl. 9% VAT)
- Revenue excl. VAT: €45,000 / 1.09 = €41,284
- Total food costs: €13,500
Food cost percentage: (€13,500 / €41,284) × 100 = 32.7%
What is a healthy food cost percentage?
The ideal food cost percentage varies by type of establishment:
- Fine dining: 28-35%
- Casual dining: 28-35%
- Bistro/brasserie: 25-32%
- Fast casual: 25-30%
- Pizzeria: 20-28%
- Delivery: 28-35% (higher packaging costs)
If you're above these percentages, you're likely losing profit.
Monthly vs. weekly checks
Check your food cost percentage at least monthly, but preferably weekly. This way you'll quickly see if:
- Suppliers have raised their prices
- You've ordered too much for your sales volume
- Certain products have suddenly become much more expensive
💡 Example weekly check:
Week 12: revenue €11,250 (excl. VAT), food costs €3,600
Percentage: 32.0% - normal
Week 13: revenue €10,800 (excl. VAT), food costs €4,100
Percentage: 38.0% - too high! Investigate why.
Common calculation mistakes
Watch out for these common errors:
- Calculating with revenue incl. VAT: This makes your percentage look lower than it actually is
- Forgetting inventory changes: If you buy more than you sell, your inventory increases
- Only counting main ingredients: Garnish, oil and spices also cost money
- Comparing different periods: Month vs. week gives a distorted picture
⚠️ Note:
A low food cost percentage isn't always good. It could mean you're using too few fresh products or your portions are too small.
What to do if your percentage is too high?
If your food cost percentage is consistently above 35%, you can:
- Raise your menu prices (most effective)
- Find cheaper suppliers
- Critically review portion sizes
- Use seasonal products more
- Adjust menu items with high food costs
💡 Example impact of price increase:
Current situation: 36% food cost percentage at €40,000 revenue/month
After 8% price increase: €43,200 revenue, same food costs
New percentage: 33.3% - within healthy margin
Digital tracking vs. manual
Many entrepreneurs track their food costs in Excel or on paper. Disadvantages include:
- Forgetting to enter invoices
- Using wrong VAT percentages in calculations
- No automatic link between invoices and revenue figures
- Time-consuming to create reports
A system like KitchenNmbrs automatically calculates your food cost percentage by linking your invoices and revenue. This way you immediately see if you're staying within your margins.
How do you calculate food costs as a percentage? (step by step)
Gather all your purchase invoices for the month
Add up all invoices for ingredients and beverages. Exclude packaging, cleaning supplies and other operational costs. Note the total amount including VAT.
Calculate your total revenue excluding VAT
Get your revenue figures for the same period. Divide the revenue including VAT by 1.09 (at 9% VAT) to get the revenue excluding VAT. This gives a more accurate picture of your margin.
Apply the formula and compare with benchmarks
Divide your total food costs by your revenue excluding VAT and multiply by 100. Compare the result with the benchmarks for your type of establishment (usually 25-35%).
✨ Pro tip
Check your food cost percentage for your 5 best-selling dishes separately. If those are good, you've solved 80% of your problem.
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
Should I include VAT in my food cost percentage?
Always calculate with revenue excluding VAT. The VAT on your revenue isn't yours—it goes to the tax authority. By calculating excluding VAT, you get an accurate picture of your actual margin.
What if my food cost percentage is different every month?
Fluctuations of 2-3 percentage points are normal due to seasons and supplier changes. Look at the average over 3-6 months for a reliable picture of your performance.
Do I also include beverages in my food costs?
Yes, all ingredients and beverages you sell count as food costs. Alcohol typically has a lower cost price than food, which can improve your overall food cost percentage.
How often should I check my food cost percentage?
Check at least monthly, but weekly is better. This way you'll quickly spot trends and can adjust before it significantly impacts your profit.
What if my percentage is higher than the benchmark?
A high percentage means profit is leaking away. Review your menu prices, suppliers and portion sizes. Often a small price increase is enough to get back within healthy margins.
📚 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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