Local products often cost more, but also offer opportunities for higher margins. Many restaurants with local concepts calculate incorrectly by only looking at purchase price. You can achieve a healthy margin if you properly account for the added value.
Why local products are different
Local products have a different cost structure than standard ingredients. The purchase price is often 20-40% higher, but you also have advantages:
- Less transport and intermediaries
- Often better quality and taste
- A story you can sell
- Guests are willing to pay more for local
Calculate your actual food cost
With local products, you need to calculate differently. It's not just the purchase price that counts, but also the added value.
💡 Example:
Local beef vs. standard:
- Local beef: €28/kg
- Standard beef: €20/kg
- Difference: €8/kg (40% more expensive)
But: local has less trim loss and better taste.
Don't calculate only with the higher purchase price. Look at the bigger picture:
- Quality: Less waste and spoilage
- Story: Guests pay more for the concept
- Season: Fluctuating prices due to seasons
Pricing strategy for local concepts
With local products, you can charge different prices. Guests expect this and are willing to pay more.
💡 Example calculation:
Local main course:
- Ingredient costs: €12.00
- Menu price: €38.00 incl. VAT
- Price excl. VAT: €34.86
Food cost: (€12.00 / €34.86) × 100 = 34.4%
This food cost of 34% is higher than average (28-32%), but acceptable because:
- You can charge higher prices
- Guests appreciate the quality
- Less marketing needed because of the story
⚠️ Watch out:
Don't go above 36% food cost. Even with local products, you need to make a profit. Increase your prices if purchasing becomes too expensive.
Seasons and fluctuating costs
Local products have strong seasonal influences. Your ingredient costs vary per month:
- Summer: Vegetables cheap, meat expensive
- Winter: Vegetables expensive, game available
- Fall: Mushrooms and game season
Adjust your menu and prices per season. Check monthly whether your food cost still adds up.
Communication with guests
The story behind local products justifies higher prices. Put this on your menu:
- Name of the supplier/farmer
- Distance ("15 km from here")
- Seasonal indication ("in season now")
💡 Example menu description:
"Beef from Hoeve Janssen (8 km) with seasonal vegetables from Kwekerij De Akker"
This justifies €4-6 premium compared to standard.
Keep control of your margins
With fluctuating seasonal prices, it's extra important to monitor your margins. Check weekly:
- Are the purchase prices still the same?
- Does your food cost still add up per dish?
- Do you need to adjust prices?
A system like KitchenNmbrs helps you track these changes without much administration.
How do you calculate margins with local products?
Gather all local ingredient prices
Make a list of all your local suppliers with current prices per ingredient. Also include transport and extra handling if the supplier charges for this.
Calculate cost price per dish
Add up all ingredients including garnish, sauces and oil. Calculate with actual quantities per portion, not estimates.
Determine your local premium
Compare with standard ingredients and calculate how much extra you can charge. Local concepts can justify 15-25% higher prices.
Check your food cost percentage
Divide ingredient costs by selling price excl. VAT and multiply by 100. Aim for maximum 36% for local concepts.
Monitor seasonal changes
Check monthly whether supplier prices have changed. Adjust your menu and prices for major fluctuations in ingredient costs.
✨ Pro tip
Focus on 3 signature local ingredients per season instead of everything local. This keeps costs manageable while you can still tell the story.
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
What food cost is normal for local restaurants?
For restaurants with local products, 32-36% food cost is acceptable, slightly higher than standard (28-32%). You can charge higher prices because of the story and quality.
How often should I adjust prices for seasonal products?
Check your purchase prices monthly and adjust for changes of more than 10%. Create seasonal menus to manage large fluctuations.
Can I combine local products with standard ingredients?
Yes, focus on 2-3 signature ingredients that are local and supplement with standard products. This keeps costs manageable while you can still tell the story.
How do I communicate higher prices to guests?
Mention the names of suppliers and distance on your menu. Guests are happy to pay more if they know why it's more expensive.
What if my local supplier becomes too expensive?
Look for alternatives in the same region or temporarily switch to standard ingredients. Always keep a backup supplier in mind.
Do I need to calculate VAT differently for local products?
No, VAT remains 9% on restaurant food. Always calculate food cost with price excluding VAT, regardless of whether ingredients are local.
📚 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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