Picture this: you've just landed a two-year catering contract with a local nursing home, but six months in, you're barely breaking even. Care institutions demand fixed pricing for extended periods while your ingredient costs climb quarterly. Most caterers learn this lesson the hard way.
Why care institutions are different
Care institutions typically lock in annual contracts with fixed meal prices. You're committing to a rate today that must remain profitable 12 months down the road. Meanwhile, your suppliers adjust their pricing every quarter without fail.
The real challenge? Building future price increases into your current quote without pricing yourself out of the bid.
The basics: food cost for care catering
Care catering operates on different food cost percentages than restaurants:
- Restaurant: 28-35% food cost
- Care catering: 35-45% food cost
Why the jump? You're working with tighter selling prices and must accommodate specialized diets, which drives ingredient costs higher.
? Example care contract:
Contract: 200 meals/day, €6.50 per meal (excl. VAT)
- Daily revenue: €1,300
- Monthly revenue: €39,000
- Annual revenue: €474,500
At 40% food cost: €189,800/year on ingredients
Calculate with inflation and price increases
Here's where most caterers stumble: ingredient prices don't stay put, but your contract price does.
Smart approach: Build in 8-12% annual ingredient price increases from day one.
⚠️ Watch out:
Too many caterers quote based solely on today's purchase prices. Twelve months later, they're operating at a loss because everything costs more.
Calculate your minimum margin
For a sustainable long-term contract, structure your costs like this:
- Food cost: 35-40% (including 10% buffer for price increases)
- Personnel: 30-35%
- Other costs: 15-20% (transport, packaging, overhead)
- Profit: 8-12%
? Example margin calculation:
Selling price: €6.50 per meal (excl. 9% VAT)
- Food cost (40%): €2.60
- Personnel (32%): €2.08
- Other costs (18%): €1.17
- Profit (10%): €0.65
Total: €6.50 ✓
Indexation clauses are crucial
Push hard for indexation clauses in every contract. These automatically adjust your prices with inflation, protecting your margins.
Sample clause: "Meal prices adjust annually per CBS consumer price index, with a 3% minimum and 8% maximum increase."
Skip this protection and you'll likely operate at a loss by year two.
Specific costs for care catering
Factor in these often-overlooked expenses:
- Diet-specific ingredients: Gluten-free, diabetic options run 20-40% higher
- Smaller portions: Reduced serving sizes for elderly clients, same prep costs
- Delivery expenses: Transport to facility locations
- Packaging materials: Insulated containers, disposable items
- Enhanced HACCP: Stricter compliance requirements, extra documentation
? Example additional costs:
200 meals/day to care institution:
- Transport: €45/day
- Packaging: €0.35/meal = €70/day
- Diet-specific (15% of meals): +€0.40/meal
Additional costs: €0.75 per meal on average
Check your margin monthly
From tracking this across dozens of restaurants, monthly margin reviews are non-negotiable for long-term contracts:
- Have supplier prices increased since last month?
- Is your actual food cost matching projections?
- Are portion sizes creeping up beyond specifications?
- Any unexpected costs appearing?
Food cost calculators can automate this tracking without endless spreadsheet updates.
Related articles
How do you calculate the margin on a long-term care contract? (step by step)
Calculate your current food cost per meal
Add up all ingredients for a standard meal. Don't forget garnish, sauces and diet-specific adjustments. This is your base food cost.
Add 10-15% for future price increases
Ingredients get more expensive every year. Calculate with at least 10% extra on top of your current purchase to still make profit after a year.
Add up personnel and additional costs
Calculate 30-35% for personnel, plus transport, packaging and overhead. For care catering this usually comes to 50-55% of your selling price.
Check that at least 8-10% profit remains
After food cost, personnel and other costs, at least 8% profit must remain. Otherwise you risk losing money on unexpected costs or price increases.
Negotiate an indexation clause
Try to get a clause in the contract that allows prices to increase annually with inflation. This protects you against unexpected cost increases.
✨ Pro tip
Track your food cost weekly for the first 90 days of any new care contract. This gives you real data to adjust portion controls and catch cost overruns before they become major problems.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Calculate it yourself?
Our free food cost calculator does it in seconds.
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Frequently asked questions
What is a healthy food cost for care catering?
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Can I use the same margin as for my restaurant?
How do I handle diet-specific meal 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
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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