Food Cost Percentage Calculator

Whether you are a restaurant owner, kitchen manager, or a chef, understanding the food cost percentage helps to control expenses, and boost profit margin. In this guide, I will explain What Food Cost Percentage is, how it works, the formula, along with examples and a few FAQs.

What Is Food Cost Percentage?

Food Cost Percentage is a key performance indicator (KPI) in the food and drink industry. It is a financial measurement that shows you how much of your sales are being spent on ingredients. If we define it in simple terms, it shows how much of your revenue is used to cover the food cost.

To understand how it works, let's proceed with a formula and a few examples.

Food Cost Percentage Formula — Examples

Here is the formula used to calculate the food cost percentage:

Food Cost Percentage = (Food Cost / Food Sales) × 100

Example:

For instance, if you're a restaurant owner and you spend 300 dollars on food, and it generates sales of 1000 dollars. Let's calculate food cost percentage:

• Food Cost: 300 dollars,
• Food Sales: 1000 dollars

Calculate it:

• Food Cost % = (300 / 1000) × 100 = 30%

We have found that 30% of your revenue goes to the food cost. Our Food Cost Percentage Calculator makes the calculation automatic and instantly provides your result in real time.

Why Is Food Cost Percentage Important?

A good food cost percentage helps a food business to stay profitable. Here is why it's important to monitor:

• Cost Control: Food cost percentage helps mange high or low food costs to prevent waste, and poor pricing.
• Profitability: Helps to figer out whether the food business is running at a profit or loss.
• Pricing Strategy: It helps to set and control pricing wisely.
• Benchmarking: Gives an overview of food cost based on industry standards, which generally fall between 25% and 35%.