Food cost percentage is the share of your food sales that you spend on the ingredients used to produce them. It is one of the first numbers restaurant owners, chefs and accountants look at — because a few percentage points, multiplied by a year of sales, decide whether a kitchen is profitable.
This guide explains the food cost formula step by step, shows how to calculate both period food cost and plate cost, covers waste, yield and portion control, and gives verified numerical examples you can reproduce in a spreadsheet.
In this guide
- The food cost percentage formula
- Worked example: a monthly food cost
- Getting accurate inputs
- Plate cost: food cost per dish
- Actual vs. theoretical food cost
- Waste: measure it before you fight it
- Yield and true ingredient cost
- Portion control
- A weekly food cost routine
- How price changes affect food cost
- Common food cost mistakes
- How to lower food cost without hurting quality
The food cost percentage formula
Food cost of goods sold (COGS) = beginning inventory + purchases − ending inventory
Food cost % = food COGS ÷ food sales × 100
| Term | Meaning |
|---|---|
| Beginning inventory | Value (at cost) of food on hand at the start of the period, from the last count |
| Purchases | Food bought and received during the period (excluding non-food items) |
| Ending inventory | Value (at cost) of food on hand at the end of the period, from a new count |
| Food sales | Net food sales for the same period, excluding tax and beverages if you track them separately |
The logic: everything you had plus everything you bought, minus what is still on the shelves, is what was used — sold, wasted, given away or lost. That is why the formula captures waste and theft as well as recipes.
Worked example: a monthly food cost
| Item | Amount |
|---|---|
| Beginning inventory (1 March count) | $6,200 |
| + Food purchases in March | $18,400 |
| − Ending inventory (31 March count) | $5,300 |
| = Food COGS | $19,300 |
| Food sales in March (net of tax) | $56,000 |
| Food cost % | 19,300 ÷ 56,000 × 100 ≈ 34.5% |
Out of every $100 of food sold in March, about $34.50 was spent on food used. Whether that is “good” depends on your concept, prices and menu mix; the most useful comparison is your own previous months and your target.
Getting accurate inputs
- Count on the same day and time each period — for example, the last day of the month after closing.
- Value inventory at cost, using recent purchase prices, consistently.
- Include all food purchases received in the period, including small cash purchases.
- Exclude non-food purchases such as cleaning supplies, packaging and equipment (track packaging separately if significant).
- Separate beverages if you want a meaningful food cost; drinks usually have very different cost structures.
- Use net food sales after discounts and excluding sales tax.
Recording supplier deliveries in your system keeps purchase totals and prices current — see purchase management and supplier records. For counting routines, see inventory cycle counting.
Plate cost: food cost per dish
Period food cost tells you how the kitchen performed; plate cost tells you what each dish should cost if the recipe is followed.
| Ingredient (burger plate) | Portion | Cost |
|---|---|---|
| Brioche bun | 1 | $0.45 |
| Beef patty | 150 g at $11.00/kg | $1.65 |
| Cheese | 1 slice | $0.35 |
| Lettuce, tomato, onion | — | $0.30 |
| Sauce | 20 ml | $0.15 |
| Fries | 150 g portion | $0.60 |
| Plate cost | $3.50 |
At a menu price of $14.00 (net of tax), the plate food cost is 3.50 ÷ 14.00 = 25%. To price this dish at a 28% target food cost, the price would be 3.50 ÷ 0.28 = $12.50.
Menu price from target food cost = plate cost ÷ target food cost %
Actual vs. theoretical food cost
If you multiply each dish’s plate cost by the number sold, you get the theoretical (ideal) food cost for the period. The actual food cost comes from the inventory formula above. The gap between them is the money lost to waste, over-portioning, spoilage, unrecorded staff meals, errors and theft.
| Amount | |
|---|---|
| Theoretical food cost (recipes × items sold) | e.g. 30.0% of sales |
| Actual food cost (inventory method) | e.g. 34.5% of sales |
| Variance | 4.5 percentage points to investigate |
Item sales by product from your POS provide the “items sold” side of the theoretical calculation — see reports and analytics.
Waste: measure it before you fight it
Waste is often the largest controllable part of the variance. Keep a simple waste log at each station: date, item, quantity, reason and cost.
| Waste type | Example | Typical fix |
|---|---|---|
| Spoilage | Expired dairy, wilted herbs | Smaller, more frequent orders; FIFO rotation |
| Preparation waste | Trim, peelings beyond normal yield | Training, better cutting, using trim in other dishes |
| Over-production | Unsold daily specials, batch sauces | Prep to forecast; batch smaller |
| Plate waste | Large portions left uneaten | Review portion sizes |
| Errors | Wrong order cooked, dropped plates | Clear tickets, routing and modifiers |
Example: a kitchen logs $420 of waste in a week with $14,000 of food sales. Waste alone represents 420 ÷ 14,000 = 3.0 percentage points of food cost that week. Halving it would lower food cost by 1.5 points without changing a single price.
Many “wrong order” errors start at the point of sale; see the restaurant POS workflow guide.
Yield and true ingredient cost
The price per kilo on an invoice is not the cost of what reaches the plate. Yield is the usable share after trimming, cooking or portioning.
Yield % = usable weight ÷ purchased weight · Cost per usable kg = purchase cost ÷ usable weight
Example: a whole salmon weighs 5.0 kg and costs $70.00 ($14.00/kg). After filleting and trimming, 3.4 kg of usable fillet remains. Yield = 3.4 ÷ 5.0 = 68%. True cost of usable fillet = 70.00 ÷ 3.4 ≈ $20.59/kg — 47% more than the invoice price per kilo. Recipes costed at $14.00/kg would understate this dish’s food cost substantially.
Portion control
- Standard recipes with exact weights and photos at each station.
- Scales and portioning tools — scoops, ladles, portion bags — for high-cost ingredients.
- Pre-portioning proteins during prep rather than during service.
- Spot checks: weigh a few portions during service each week.
- Training new cooks on why portions matter, not just how much to use.
Small over-portions add up. If a 150 g patty is consistently served at 165 g, that is 10% more beef on every burger — at $1.65 per standard patty, roughly $0.165 extra per plate, which across thousands of burgers a year becomes a meaningful amount.
A weekly food cost routine
Monthly figures arrive too late to fix the month. Many kitchens calculate a weekly food cost with the same formula, counting only the main food stock on the same evening each week.
Example: beginning inventory $1,480, purchases during the week $4,300, ending inventory $1,380, food sales $12,600. Food COGS = 1,480 + 4,300 − 1,380 = $4,400; food cost = 4,400 ÷ 12,600 ≈ 34.9%. A sudden jump from one week to the next usually points to a specific cause — a large delivery received before a count, a price increase, a spoiled batch — that is still easy to identify.
Weekly results swing more than monthly ones because deliveries and counts fall on different days. Look at the trend over four to six weeks rather than reacting to a single week.
How price changes affect food cost
Food cost percentage falls when prices rise even if nothing changes in the kitchen. The burger plate costing $3.50 has a food cost of 25.0% at $14.00, but about 23.3% at $15.00 (3.50 ÷ 15.00). That is why food cost percentage should always be read together with the money each dish contributes — the subject of menu engineering — and why a lower percentage is not automatically better if it comes from prices that reduce sales.
Common food cost mistakes
- Counting on different days or times, so periods are not comparable.
- Including beverages, packaging or cleaning supplies in food purchases.
- Using tax-inclusive sales, which understates food cost.
- Costing recipes once and never updating them when supplier prices change.
- Ignoring staff meals and complimentary dishes, which then appear as unexplained variance.
- Chasing an industry average instead of your own target based on your concept and prices.
How to lower food cost without hurting quality
- Calculate food cost every period with consistent counts.
- Cost every recipe and update plate costs when supplier prices change.
- Compare actual and theoretical food cost; investigate the gap.
- Log waste daily and review it weekly with the team.
- Use yield tests for proteins and produce that are trimmed in-house.
- Use menu engineering to promote high-contribution dishes — see menu engineering.
- Review prices with the same rigour as costs — see margin vs markup.
Track purchases, stock and item sales in one place: the free edition includes inventory tracking and sales history with demo data.
Frequently asked questions
How do you calculate food cost percentage?
Food cost % = (beginning inventory + purchases − ending inventory) ÷ food sales × 100. For example, ($6,200 + $18,400 − $5,300) ÷ $56,000 ≈ 34.5%.
What is a good food cost percentage?
It depends on the concept, prices and menu. Industry articles often cite ranges around the high 20s to low 30s percent, but the most useful benchmark is your own target and trend.
What is plate cost?
The cost of all ingredients in one portion of a dish, based on the standard recipe. Divide it by the menu price (net of tax) to get the dish’s food cost percentage.
What is the difference between actual and theoretical food cost?
Theoretical food cost is what you should have spent based on recipes and items sold; actual food cost comes from inventory counts. The gap shows waste, over-portioning and losses.
Should beverages be included in food cost?
Usually not. Most restaurants track food cost and beverage cost separately because their margins differ significantly.