How much money are you throwing away with kitchen scraps? Smart restaurants turn fish bones, vegetable trimmings, and leftover bread into profitable dishes. Here's how to calculate cost prices for by-product creations.
What are by-products in the kitchen?
By-products emerge during prep work for other dishes. Common examples include:
- Fish heads and bones after filleting
- Chicken bones after deboning
- Vegetable trimmings (peels, ends)
- Leftover sauces or marinades
- Yesterday's bread
These ingredients already "earned back" part of their cost in the main dish. So for by-product dishes, you calculate with a reduced cost price.
💡 Example:
You fillet 5 kg whole salmon at €18/kg = €90 total
- Salmon fillet: 2.8 kg (for main dishes)
- Heads + bones: 2.2 kg (for stock/soup)
The fillet carries the full €90. The heads get cost price €0.
Calculate the actual cost price of by-products
You've got two methods to value by-products in your cost calculations:
Method 1: Free by-products
The straightforward approach: by-products cost €0. The main product shoulders all expenses.
💡 Example fish soup:
- Fish heads + bones: €0 (by-product)
- Vegetables for soup: €2.50
- Cream: €1.20
- Herbs: €0.80
Total cost price per liter: €4.50
Method 2: Proportional allocation
Split the original cost by weight. This shows a more accurate picture of your real margins.
💡 Example proportional allocation:
5 kg salmon for €90 = €18/kg average
- Fillet (2.8 kg): 2.8 × €18 = €50.40
- Heads/bones (2.2 kg): 2.2 × €18 = €39.60
For soup you then calculate €39.60 / 2.2 kg = €18/kg for the heads.
⚠️ Note:
Method 1 (free) makes by-product dishes appear artificially profitable. Method 2 provides a more realistic view of your overall profitability.
Calculate cost price with by-products
Follow these steps for accurate cost calculations:
Step 1: List all ingredients
- By-products (with chosen valuation method)
- Fresh ingredients (at purchase price)
- Herbs, oil, butter
- Garnish and decoration
Step 2: Total all costs
Calculate exactly how many portions your by-product yields. After managing kitchen operations for nearly a decade, I've learned that accurate portioning makes or breaks by-product profitability. Divide total costs by portion count.
💡 Example chicken stock:
From 3 kg chicken bones you make 8 liters of stock
- Chicken bones: €0 (by-product)
- Vegetables: €4.50
- Herbs: €1.20
- Gas/energy: €2.00
Cost price per liter: €7.70 / 8 = €0.96
Step 3: Calculate your food cost percentage
Use this formula: (Cost price / Selling price excl. VAT) × 100
By-product dishes often allow lower selling prices while maintaining healthy margins.
Special situations
Combination of main and by-products
Some dishes blend fresh ingredients with by-products. Calculate each category separately, then add them together.
Limited shelf life
By-products spoil faster than fresh ingredients. Factor in waste costs if you regularly discard leftovers.
⚠️ Note:
Plan by-product dishes immediately after preparing the main dish. Don't wait until scraps start spoiling.
Impact on your overall profitability
By-products can reduce your total food cost through:
- Less waste of expensive ingredients
- Extra revenue from 'free' raw materials
- Unique dishes that set you apart from competitors
- Lower average food cost across your entire menu
A well-executed by-product dish can drop your total food cost by 2-5 percentage points, depending on your menu mix.
How do you calculate the cost price of a by-product dish?
Determine the value of your by-product
Choose between method 1 (free, cost price €0) or method 2 (proportional by weight of original product). Method 1 is simpler, method 2 gives more realistic insight into overall profitability.
Inventory all additional ingredients
Make a list of all new ingredients you add: vegetables, herbs, sauces, oil, etc. Calculate these at full purchase price and don't forget small ingredients like salt and pepper.
Calculate cost price per portion
Add up all costs and divide by the number of portions you can make. Don't forget energy costs for long cooking times (stocks, stews). Check that your food cost stays below 35%.
✨ Pro tip
Track by-product yields from your top 5 proteins over the next 30 days - knowing that 10 kg of whole chicken consistently yields 2.8 kg of bones helps you plan stock production and reduce waste by 15-20%.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Do I always have to calculate by-products as free?
No, that's your choice. Calculating free (method 1) is simpler and makes by-product dishes more profitable. Proportional allocation gives a fairer picture of your overall margins per ingredient.
How long can I store by-products?
Use fish scraps and chicken bones within 24 hours. Vegetable scraps can be refrigerated for 2-3 days. Freeze if you don't process immediately, but factor in freezing costs and quality loss.
Can I resell by-products to other restaurants?
Only with proper permits and HACCP registration. For most small restaurants, processing into new dishes is more practical and profitable than reselling.
How do I factor in energy costs for slow cooking?
Calculate approximately €0.50-1.00 per hour for a large pan on gas. For stocks that simmer 6-8 hours, add €3-8 energy costs to your ingredient costs.
What if my by-product dish doesn't sell?
Start with small quantities and test demand. Better to run out of 2 liters of stock than throw away 10 liters. By-products are only profitable if they actually sell.
Should I include labor costs in by-product calculations?
Yes, especially for time-intensive preparations like stock-making. Calculate prep time at your kitchen staff's hourly rate and add it to ingredient costs for accurate pricing.
How do I handle seasonal variations in by-product availability?
Track your by-product yield rates monthly and adjust menu planning accordingly. Winter menus might feature more root vegetable scraps, while summer focuses on fish bones from increased seafood sales.
📚 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.
Develop recipes with instant cost calculation
Every new recipe has a cost price. KitchenNmbrs calculates it while you build the recipe — so you know if it's profitable before it hits the menu. Try it free.
Start free trial →