Currency fluctuations can drastically affect your purchasing costs if you import products. A euro that weakens by 10% against the dollar means all your American suppliers become 10% more expensive. Here's your step-by-step guide to calculate the impact and adjust your cost prices.
Why currency changes affect your cost price
If you import ingredients from countries outside the eurozone, you're actually paying in two steps:
- The price in foreign currency (for example $15 per kg)
- The exchange rate at the time of payment
- Any bank fees for currency exchange
Many entrepreneurs forget that second point. They think: "My supplier still asks for $15", but forget that those $15 now cost more euros. This oversight is a mistake that costs the average restaurant EUR 200-400 per month in unexpected price increases.
? Example:
You import special olive oil from the US for $15 per liter.
- Last year: €1 = $1.20 → $15 = €12.50
- This year: €1 = $1.10 → $15 = €13.64
Impact: 9.1% more expensive!
The basic formula for currency impact
The formula is straightforward, but you need to apply it correctly:
New euro price = Price in foreign currency / New exchange rate
And for the percentage impact:
Impact % = ((New euro price - Old euro price) / Old euro price) × 100
⚠️ Note:
Exchange rates change daily. Always check the current rate at the time of your calculation, not the rate from last week.
Passing the impact through to your menu price
If your purchase price rises due to currency, you need to see what this means for your food cost and menu price:
- First calculate how much of the imported product is in each dish
- Work out the additional costs per portion
- Check if your food cost still falls within your desired range
- Adjust your menu price if needed
? Example calculation:
You use 50ml of that olive oil per pasta (€0.68 instead of €0.63).
- Additional cost per portion: €0.05
- At 200 portions per month: €10 extra costs
- At current menu price €18.50: food cost rises from 28% to 28.3%
Still acceptable, no price adjustment needed.
Protecting against currency risk
There are a few ways to limit currency risk:
- Forward contracts: Exchange euros now for future deliveries
- European alternatives: Look for similar products within the eurozone
- Flexible menu: Create seasonal dishes that you can adjust
- Build in buffers: Calculate with a 2-3% margin for currency fluctuations
The first option is usually only worthwhile for large volumes. For most restaurants, option 2 or 4 is more practical.
Timing your price adjustments
Not every currency fluctuation requires a menu adjustment. Rules of thumb:
- Impact < 2% on dish: Usually no action needed
- Impact 2-5% on dish: Consider adjustment if it's a popular dish
- Impact > 5% on dish: Almost always adjust or find an alternative
⚠️ Note:
Don't just look at the impact per dish, but also how much you sell. A dish with 2% impact that you sell 100 times per week has more financial impact than a dish with 5% impact that you sell 5 times per week.
How do you calculate currency impact? (step by step)
Gather the exchange rate data
Note the old exchange rate (when you set the price) and the current exchange rate. Check these on a reliable financial site like XE.com or your bank's website.
Calculate the new euro price
Divide the price in foreign currency by the new exchange rate. For example: $15 / 1.10 = €13.64. Compare this with your old euro price.
Pass the impact through to your dishes
Check how much of this product you use per portion. Multiply the additional cost per unit by the usage per dish to get the impact per portion.
Determine if price adjustment is needed
If your food cost exceeds your desired percentage, calculate what your new menu price would need to be to stay within your margin.
✨ Pro tip
Track your top 5 imported ingredients weekly during volatile periods - a 3% swing on key items can impact monthly profits by €150-300 before you notice.
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 exchange rates?
Can I completely eliminate currency risk?
Should I include bank fees in the calculation?
What if my supplier wants to invoice in euros?
How do I avoid constantly adjusting prices?
Should I hedge against currency risk for seasonal ingredients?
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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