Picture this: you're staring at a €12 steak and wondering if you've lost your mind. That price tag feels intimidating, but here's what matters - it's not the absolute cost that determines profitability. The magic lies in understanding your food cost percentage and having the confidence to price accordingly.
Why expensive ingredients can mislead you
You see that €12 steak and immediately think 'way too expensive.' But hold on - sell it for €45 and you've got a 29% food cost. That's actually excellent for most restaurants.
💡 Example expensive ingredient:
Steak menu with premium meat:
- Steak 250g: €12.00
- Vegetables and garnish: €2.50
- Sauce and spices: €1.00
- Potatoes: €0.80
Total ingredient costs: €16.30
Selling price: €52.00 incl. VAT (€47.71 excl. VAT)
Food cost: 34% - perfectly profitable!
The food cost formula as your compass
Here's your lifeline with pricey ingredients:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
Stay between 28% and 35%, and you're golden - doesn't matter if ingredients cost €5 or €15 per portion. From analyzing actual purchasing data across different restaurant types, I've seen operators panic over ingredient costs while missing the bigger picture entirely.
⚠️ Note:
Always calculate with the selling price EXCLUDING VAT. The price on your menu is including 9% VAT. Divide by 1.09 to get the price excl. VAT.
How to convince your team with the numbers
Your chef sees that €12 steak and freaks out. Show them the full picture:
- Show the total ingredient costs per portion
- Display the selling price excl. VAT
- Calculate the food cost percentage
- Compare with other dishes on the menu
💡 Comparison example:
Show that a 'cheap' dish sometimes scores worse:
- Pasta (ingredients €4.50, selling price €16.50): 30% food cost
- Premium steak (ingredients €16.30, selling price €47.71): 34% food cost
The difference is only 4 percentage points, but the absolute profit per plate is much higher with the steak.
Absolute profit vs. food cost percentage
An expensive dish can generate way more profit, even with a slightly higher food cost:
- Pasta: €16.50 - €4.50 = €12.00 profit per plate
- Steak: €47.71 - €16.30 = €31.41 profit per plate
That steak generates 2.6× more profit per plate sold. More than makes up for the slightly higher food cost, right?
Communication with your team
Create a simple comparison table your team can actually understand. Show them profitability isn't about rock-bottom purchase costs - it's about nailing that cost-to-selling-price ratio.
✨ Pro tip:
Track your top 3 highest-cost dishes for 30 days and calculate their actual profit per plate sold. You'll often find they're your biggest money-makers despite the scary ingredient costs.
How do you calculate profitability of expensive dishes? (step by step)
Gather all ingredient costs
Add up all ingredients that go on the plate: main ingredient, garnish, sauces, oil, spices. Don't forget anything, including the expensive items.
Calculate selling price excluding VAT
Divide your menu price by 1.09 to get the price excluding 9% VAT. You'll use this price to calculate the food cost.
Calculate food cost percentage
Divide ingredient costs by selling price excl. VAT and multiply by 100. If the result is under 35%, the dish is profitable.
Compare absolute profit per plate
Subtract ingredient costs from selling price excl. VAT. This is your profit per plate. Compare with other dishes to see which ones generate the most.
✨ Pro tip
Track your top 3 highest-cost dishes for 30 days and calculate their actual profit per plate sold. You'll often find they're your biggest money-makers despite the scary ingredient costs.
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
Can a dish with €15 in ingredients be profitable?
Absolutely. If you sell it for €50+ and your food cost stays under 35%, you earn more per plate than with cheap dishes. It's about the ratio, not absolute amounts.
How do I explain to my team that expensive ingredients are okay?
Show the complete calculation: ingredient costs, selling price excl. VAT, food cost percentage, and absolute profit per plate. Numbers convince better than arguments.
Do I always have to stay under 35% food cost with expensive ingredients?
It's a guideline, not a hard rule. If you make solid absolute profit and the dish sells well, 38% can work fine. Look at the bigger picture of profit per plate.
📚 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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