What is a good food cost percentage?

Industry standard is 25-35%. Below 25% may indicate overpricing, above 35% reduces profitability.

What is prime cost percentage?

Prime cost combines food and labor costs. Target 55-65% to maintain healthy margins.

How do I reduce food cost percentage?

Optimize portion sizes, negotiate supplier pricing, reduce waste, or adjust menu prices.

Should I include labor in food cost?

Labor is tracked separately as prime cost (food + labor) for complete profitability analysis.

What is ingredient yield percentage and why does it matter?

Yield percentage is how much of a purchased ingredient is actually usable after trim, shrinkage, or spoilage. An 80% yield means 20% is lost in prep, so the true cost of what you use is higher than the purchase price. Set yield to 100% for ingredients with no prep loss.

Food Beverage Calculators

Food Cost Calculator

Calculate accurate recipe costs based on ingredient prices, quantities, and portion sizes for restaurants, catering, and food businesses. Features detailed per-serving cost breakdowns, suggested menu pricing with target food cost percentages (typically 28-35%), profit margin analysis, and ingredient cost tracking. Perfect for chefs, restaurant owners, and food entrepreneurs optimizing menu profitability.

How to Use the Food Cost Calculator

Use the Food Cost Calculator to accurate recipe costs based on ingredient prices, quantities, and portion sizes for restaurants, catering, and food businesses. Features detailed per-serving cost breakdowns, suggested menu pricing with target food cost percentages (typically 28-35%), profit margin analysis, and ingredient cost tracking. Perfect for chefs, restaurant owners, and food entrepreneurs optimizing menu profitability.. Enter your values to get accurate, instant results tailored to your situation.

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Restaurant Profitability

Food cost management

Expert Tips

Target 25-35% Food Cost: Industry standard for profitability. Below 25% may signal quality concerns; above 35% threatens margins.
Price for Percentage, Not Dollars: Set menu prices to achieve target food cost percentage rather than adding fixed dollar markup to ingredient costs.
Waste Adds 3-5% to Costs: Account for trim loss, spoilage, and preparation waste when calculating true ingredient costs.
Menu Engineering Boosts Profit: Promote high-margin items through placement, descriptions, and server recommendations rather than cutting portions.

Essential Fundamentals — Costing basics

Pricing Strategy & Formulas

Food Cost Percentage: Dividing ingredient cost by menu price reveals food cost percentage. Industry targets 25-35% for profitable operations.
Menu Price Calculation: Divide ingredient cost per serving by target food cost percentage to determine menu price. Example: $3 cost ÷ 30% = $10 menu price.

Cost Management Basics

Waste Factor: Account for trim loss, spoilage, and preparation waste when calculating true ingredient costs. Adds 3-5% to costs.
Portion Control: Consistent portioning ensures food costs match calculations. Over-portioning destroys margins even with correct pricing.

Advanced Strategies — Margin optimization

Profitability Tactics

Prime Cost Management: Food cost plus labor cost should total 55-65% of revenue. Managing both together prevents focusing on one while neglecting the other.
Seasonal Menu Design: Using in-season ingredients reduces costs while improving quality. Build menu flexibility to adapt to price fluctuations.

Frequently Asked Questions

What is a good food cost percentage?: Industry standard is 25-35%. Below 25% may indicate overpricing, above 35% reduces profitability.
What is prime cost percentage?: Prime cost combines food and labor costs. Target 55-65% to maintain healthy margins.
How do I reduce food cost percentage?: Optimize portion sizes, negotiate supplier pricing, reduce waste, or adjust menu prices.
Should I include labor in food cost?: Labor is tracked separately as prime cost (food + labor) for complete profitability analysis.
What is ingredient yield percentage and why does it matter?: Yield percentage is how much of a purchased ingredient is actually usable after trim, shrinkage, or spoilage. An 80% yield means 20% is lost in prep, so the true cost of what you use is higher than the purchase price. Set yield to 100% for ingredients with no prep loss.