Restaurant owners today face unique challenges calculating margins on house-made fermentation products. You invest time, raw materials and space, but the end result's worth more than the sum of ingredients. Here's how to calculate true cost price including fermentation time and waste.
Why fermentation is different
With fermentation you turn cheap raw materials into a more valuable product. A kilo of cabbage at €1.50 becomes kimchi worth €12 per kilo. But you need time, salt, spices and space.
Many restaurants estimate this, but then you miss the real costs:
- Raw materials (vegetables, salt, spices)
- Labor time (chopping, mixing, filling jars)
- Space (fermentation area costs money)
- Waste (not everything works out)
- Packaging (jars, labels)
Calculate your raw materials
Start with all ingredients you need for one batch. Add up everything literally, including the salt and spices.
💡 Example kimchi (5 kg batch):
- Cabbage 4 kg: €6.00
- Gochugaru 200g: €4.50
- Salt 150g: €0.30
- Garlic, ginger, onion: €2.20
- Fish sauce 100ml: €1.50
- Jars and labels: €3.00
Raw materials total: €17.50
Factor in labor time
Fermentation takes time. Not just the fermentation itself, but also the preparation. Calculate with your hourly rate or that of your chef.
Typical time investment for kimchi:
- Chopping and mixing: 2 hours
- Filling jars and labeling: 30 minutes
- Checking and turning: 15 minutes per week (4 weeks)
💡 Labor cost calculation:
Total time: 3.5 hours × €25/hour = €87.50
For 5 kg kimchi = €17.50 labor costs per kg
Space and overhead
Your fermentation area costs money. A square meter of kitchen space costs approximately €15-25 per month. If your kimchi ferments for 4 weeks and uses 0.2 m², calculate €5 space costs per batch.
Account for waste
Not every fermentation succeeds. From analyzing actual purchasing data across different restaurant types, calculate 10-15% waste for beginners, 5-10% for experienced fermenters. This means you need to make more to get the same amount of usable product.
⚠️ Note:
Factor waste into your cost price. If 10% fails, you need to pass 10% more costs on to the good product.
The total cost price formula
Fermentation cost price = (Raw materials + Labor + Space + Packaging) / (End weight - Waste %)
💡 Complete kimchi calculation:
- Raw materials: €17.50
- Labor (3.5h × €25): €87.50
- Space (4 weeks): €5.00
- Total costs: €110.00
- End weight: 4.5 kg (shrinkage from fermentation)
- Waste 10%: usable 4.05 kg
Cost price: €110 / 4.05 kg = €27.16 per kg
From cost price to menu price
Now that you know the cost price, calculate the selling price. For a specialty like homemade kimchi you can use a lower food cost than regular ingredients, often 20-25%.
Minimum selling price = Cost price / (Desired food cost % / 100)
At €27.16 cost price and 25% food cost: €27.16 / 0.25 = €108.64 per kg excl. VAT
Determine portion size
Fermentation products are often used as a side dish or garnish. A portion of kimchi is usually 50-80 grams. At €27.16 per kg, a 60 gram portion costs you €1.63.
💡 Practical example:
Korean BBQ with 60g kimchi side dish:
- Kimchi cost price: €1.63
- At 25% food cost: minimum €6.52 excl. VAT
- Menu price: €7.10 incl. VAT
Save your recipes and cost prices
Fermentation recipes are business capital. Save exact quantities, times and temperatures. If your chef leaves, you don't want to figure out how you achieved that perfect result all over again.
A system like KitchenNmbrs helps track these complex cost prices, including labor time and waste. That way you can see directly if your fermentation products are profitable.
How do you calculate the margin on fermentation products? (step by step)
Gather all costs from one batch
Note all raw materials, labor time (× hourly rate), space costs and packaging. Don't forget spices, salt or labels - it all counts.
Measure the end result and account for waste
Weigh the end product after fermentation. Subtract 5-15% waste (what fails or isn't sellable). This is your usable amount.
Calculate cost price per kg and portion
Divide total costs by usable kg's. Multiply by your portion weight for cost price per portion. Check if this fits within your desired food cost percentage.
✨ Pro tip
Track your first 3 batches of kimchi with exact timing - most restaurants underestimate labor by 40%. Calculate true hourly costs including prep, monitoring, and packaging time.
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 labor time in the cost price of fermentation?
Yes, absolutely. Fermentation requires a lot of handwork. Calculate with your own hourly rate or that of your chef. Without labor time, fermentation seems free, but then you lose money.
How do I account for waste in fermentation?
Calculate 10-15% waste for beginners, 5-10% for experienced fermenters. Divide your total costs by the usable end result, not by what you hoped to make.
What food cost percentage can I use for homemade fermentation?
For specialties like homemade kimchi or kombucha you can use a lower food cost, often 20-25%. Guests pay for the unique flavor and craftsmanship.
How long can I store and use fermentation products?
Most fermentation products last 2-6 months. Do account for gradual quality loss. Make smaller batches more often for the best quality.
📚 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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