Question 1

What is food cost percentage?

Accepted Answer

Food cost percentage is one of the most important metrics for restaurant profitability. It represents the portion of a menu item's selling price that is spent on the ingredients required to make it. The formula is (Total Ingredient Cost / Selling Price) * 100.

Question 2

What is a good food cost percentage for a restaurant?

Accepted Answer

While it varies by concept, a general industry benchmark for a healthy food cost percentage is between 28% and 35%. Fine dining might have a higher percentage (up to 40%), while a pizzeria or pasta restaurant might be lower (20-25%).

Question 3

How can I lower my food cost percentage?

Accepted Answer

Lowering food cost involves several strategies:Negotiate with Suppliers: Build strong relationships and look for bulk discounts.Reduce Waste: Implement a strict "first-in, first-out" (FIFO) inventory system and track waste diligently.Portion Control: Use standardized recipes, measuring tools, and scales to ensure every dish is consistent.Menu Engineering: Analyze your menu to promote high-profit, low-cost items.Strategic Pricing: Adjust menu prices to reflect current ingredient costs.

Question 4

Is a lower food cost always better?

Accepted Answer

Not necessarily. An extremely low food cost (e.g., below 20%) could be a red flag that you are using lower-quality ingredients, which could negatively impact guest satisfaction and repeat business. The goal is to find the sweet spot between a healthy profit margin and a high-quality product that keeps customers coming back.

Question 5

How does this calculator differ from the Recipe Costing Calculator?

Accepted Answer

This Food Cost Calculator is designed for a quick, high-level analysis of a single menu item based on its total ingredient cost and selling price. The Recipe Costing Calculator is a more detailed tool that allows you to break down the cost of individual ingredients, and also factor in labor, waste, and overhead to get a much more granular "plate cost". This tool is great for quick checks, while the other is better for deep-dive menu engineering.

Food Cost Calculator

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Understanding Food Cost

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