How to calculate food cost percentage
Food cost percentage is what you spent on ingredients divided by what you sold them for, as a percentage. If a dish costs $4.20 in ingredients and sells for $14.00, its food cost is 30%. For a whole restaurant over a month, the same formula uses total food purchases, adjusted for inventory, over total food sales.
The formula
For one dish:
food cost % = ingredient cost ÷ menu price × 100
For a period, such as a week or a month:
food cost % = (opening inventory + purchases − closing inventory) ÷ food sales × 100
The inventory adjustment matters. Purchases alone tell you what arrived at the back door, not what you used. A big delivery on the last day of the month inflates purchases without touching sales, and the adjustment cancels it out.
A worked example from an invoice
Suppose a produce invoice lists Baby arugula, 3 lb, $78.00. Your salad uses 2 oz of arugula.
- Convert the pack to the unit you cook in: 3 lb is 48 oz.
- Cost per unit: $78.00 ÷ 48 oz = $1.625 per oz.
- Cost in the dish: 2 oz × $1.625 = $3.25.
Repeat for every ingredient and add them up. If the salad's ingredients total $4.20 and it sells for $14.00, then $4.20 ÷ $14.00 = 0.30, so the food cost is 30%.
Now suppose next month's invoice reads Baby arugula, 3 lb, $90.00. The arugula in the dish is now $3.75, the plate is $4.70, and the food cost has drifted to 33.6% with nothing on the menu changing. That drift is why the calculation has to be repeated as invoices arrive, not once a year.
What range to aim for
Most full-service restaurants aim for a food cost between 28% and 35%. Treat that as a rule of thumb, not a target for every dish: a steak may run 40% and still earn more dollars than a pasta at 22%, because the plate price is higher. The number that pays the rent is gross profit per plate, and food cost percentage is the fastest way to see when it is slipping.
Three mistakes that make the number lie
1. Costing from the price you remember
Recipe cards are built once and priced from the invoice that was on the desk that day. Supplier prices move every few weeks. A card that is six months old is describing a dish you no longer serve at that cost.
2. Ignoring the pack size
Invoices price by the case, the pound, the each, or the gallon, and recipes measure in ounces, cups, and portions. An invoice line that says 40# means 40 pounds. One that says #10 means a number-10 can, about 6 lb 9 oz of contents, and not ten of anything. Getting the conversion wrong once puts the wrong cost into every dish that uses the item.
3. Skipping the inventory count
Without opening and closing counts, a month's food cost is really a month's purchases, and it swings with delivery timing rather than with what you sold. Counting the walk-in on the same day every period is what turns purchases into usage.
How often to recalculate
Recalculate whenever an invoice arrives with a changed price, and review the whole menu at least monthly. Doing that by hand means re-reading every invoice line against every recipe card, which is why most kitchens do it once and then stop.
Everyday Mise reads your supplier invoices and keeps this number current for every recipe, without the spreadsheet. See pricing or start a 14-day free trial.