Food cost: what it is, what percentage is normal and how to lower it

Food cost is the share of revenue that goes to ingredients. It's one of the key metrics in food service: it quickly shows whether money is leaking into ingredients, over-portioning and write-offs. Let's look at how to calculate it and how to use it.

The formula

food cost = ingredient cost ÷ revenue × 100%

If a cappuccino sells for 250 ₽ and costs 63 ₽ to make, that item's food cost is about 25%. We covered how to calculate the cost of a portion in a separate article.

Theoretical vs. actual food cost

There are two kinds of food cost, and the most useful thing you can do is compare them.

Theoretical food cost comes from your recipe cards: how much product should have been used for everything you sold. It's food cost “as planned”.

Actual food cost comes from your stock for the period:

ingredients used = opening stock + purchases − closing stock

Divide that usage by revenue for the same period. This is food cost “as it really turned out”.

A one-month example

• revenue for the month — 1,200,000 ₽;
• stock at the start of the month — 180,000 ₽;
• purchases during the month — 390,000 ₽;
• stock at the end of the month, per the stock count — 170,000 ₽.

Actual usage: 180,000 + 390,000 − 170,000 = 400,000 ₽. Actual food cost: 400,000 ÷ 1,200,000 ≈ 33.3%.

Now suppose that, according to the recipe cards, what you sold should have used ingredients worth 28% of revenue. The gap is 5.3 percentage points, or about 63,600 ₽ a month. That's money that didn't go into dishes you sold: it went into over-portioning, write-offs, accounting errors or theft.

What food cost is considered normal

There's no single standard: it depends on your format, menu and prices. These ranges are often quoted as a rough guide:

• coffee shops — around 20–30%: drinks have a lower food cost, food a higher one;
• street food and fast food — around 25–35%;
• cafés and restaurants — around 28–35%.

Hitting the “norm” matters less than knowing your own food cost, tracking how it changes, and watching the gap between theoretical and actual. If the gap is growing, you're losing product somewhere.

The percentage isn't everything

A low food cost doesn't always mean “profitable”. Compare two items:

• a lemonade at 200 ₽ that costs 30 ₽ — food cost 15%, you keep 170 ₽ per sale;
• a burger at 450 ₽ that costs 160 ₽ — food cost about 36%, you keep 290 ₽ per sale.

The burger has the higher food cost, but it brings in more rubles. So cutting everything with a high food cost from the menu is a bad idea. Look at both numbers: the percentage and the amount you keep from each sale.

How to lower food cost

• Find the gap between theory and reality. If actual food cost is higher than theoretical, look for losses first instead of raising prices.
• Get portions under control. Scales at the pass, measuring spoons and plating photos in the recipe card pay for themselves quickly.
• Record write-offs with a reason. Then you can see exactly what goes bad and why.
• Review the menu. Items that barely sell but need their own ingredients often generate more write-offs than revenue.
• Keep an eye on purchase prices. When one ingredient gets more expensive, the cost of every dish it goes into changes.

Seeing losses without spreadsheets

To compare theory with reality, you need accurate stock levels and recipe cards. In Crumble, sales automatically deduct ingredients according to the recipe cards, and analytics shows your losses — the difference between usage by recipe cards and actual stock — along with the cost and popularity of each item.