Most restaurant owners think switching to cheaper ingredients automatically saves money. But that's not always true - sometimes you'll actually spend more due to hidden costs like trim loss and waste. A simple calculation shows you the real impact on your margins before you make the switch.
Why this calculation matters
A euro difference per kilo seems small, but with large volumes it adds up quickly. Plus, you need to check whether the cheaper alternative keeps your food cost percentage under control.
💡 Example:
You currently use premium beef at €28/kg and are considering switching to a cheaper variant at €22/kg. You sell 50 kg per month.
- Current costs: 50 kg × €28 = €1,400/month
- New costs: 50 kg × €22 = €1,100/month
Savings: €300 per month = €3,600 per year
Impact on your food cost percentage
A cheaper ingredient automatically lowers your food cost. This gives you more margin or room to lower your menu price.
💡 Example food cost calculation:
Steak sold for €32.00 incl. VAT (= €29.36 excl. VAT):
- With expensive meat (€7.00 per portion): 23.8% food cost
- With cheap meat (€5.50 per portion): 18.7% food cost
Difference: 5.1 percentage point lower food cost
What to check with alternatives
Not every cheap alternative is automatically more profitable. Watch out for these factors:
- Yield: Does the cheaper product have more trim loss?
- Taste: Does the quality of your dish stay the same?
- Shelf life: Does it spoil faster, causing more waste?
- Prep time: Does it take more time to prepare?
⚠️ Watch out:
A cheaper product with 20% more trim loss can end up costing more than the pricier alternative.
Calculation including trim loss
If the cheaper product produces more waste, you need to factor that into your calculation. After managing kitchen operations for nearly a decade, I've seen too many chefs get burned by this oversight.
💡 Example trim loss:
Comparison of two salmon suppliers:
- Premium salmon: €24/kg, 40% trim loss = €40/kg fillet price
- Budget salmon: €18/kg, 50% trim loss = €36/kg fillet price
Budget salmon is €4/kg cheaper despite lower purchase price
Calculate annual impact
To see the full impact, calculate the savings over a whole year. This helps you decide whether the switch is worth it.
Formula: (Difference per kg × Monthly consumption × 12) = Annual savings
Build in a test period
Try the new product for a month before you switch permanently. Monitor your costs, waste, and customer reactions.
- Keep track of how much you use of the new product
- Check if guests notice the difference
- Measure your actual trim loss
- Compare your total costs with the previous month
How do you calculate the impact of a cheaper alternative?
Gather the prices and volumes
Write down the price per kilo of both products and how much you use per month. Also check if there's a difference in trim loss or yield between the two products.
Calculate the cost difference per month
Multiply your monthly consumption by the price per kilo for both products. Subtract the costs from each other to get your monthly savings.
Check the impact on your food cost percentage
Calculate your food cost with both ingredients for your most popular dishes. See how many percentage points difference it makes and whether you stay within your desired margin.
Calculate on an annual basis
Multiply your monthly savings by 12 to see what it yields on an annual basis. This gives you the complete financial picture of the switch.
✨ Pro tip
Run a 2-week side-by-side test using both products on identical dishes during the same service periods. Track exact usage, waste, and guest feedback to get real numbers before making the full switch.
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 do I know if the trim loss is different?
Test both products for a week and weigh exactly what you throw away. Calculate the trim loss percentage and include this in your cost comparison.
What if guests notice the difference?
Monitor customer reactions and online reviews. If quality noticeably decreases, this can cost you sales and offset the savings.
Can I replace multiple ingredients at once?
Do this step by step. Replace one ingredient first, test the result, and then adjust the next ingredient.
📚 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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