1. What is Food Cost Percentage?

Food Cost Percentage is a key metric in the restaurant industry that shows the relationship between the cost of ingredients and the revenue generated from selling food. It helps restaurant owners understand their profitability and manage costs effectively.

2. How Does the Calculator Work?

The calculator uses the standard food cost formula:

Where:

• Beginning Inventory — Value of food inventory at start of period
• Purchases — Additional food purchases during the period
• Ending Inventory — Value of food inventory at end of period
• Sales — Total food sales revenue for the period

Explanation: The formula calculates the percentage of sales revenue that was spent on food ingredients.

3. Importance of Food Cost Calculation

Details: Monitoring food cost percentage helps restaurant managers control expenses, set menu prices, identify waste or theft, and maintain profitability.

4. Using the Calculator

Tips: Enter all values in USD. Ensure inventory counts are accurate and include all food items. Sales should reflect the same period as the inventory measurements.

5. Frequently Asked Questions (FAQ)

Q1: What is a good food cost percentage?
A: Typically 28-35% of sales, but varies by restaurant type. Fine dining may be higher, fast food lower.

Q2: How often should I calculate food cost?
A: Monthly is standard, but weekly can help identify problems faster in high-volume restaurants.

Q3: Should beverages be included?
A: For pure food cost, exclude beverages. Some operators calculate separate food and beverage costs.

Q4: What if my percentage is too high?
A: Check for waste, portion sizes, theft, or supplier prices. Menu engineering can help improve margins.

Q5: Does this include labor costs?
A: No, this is purely food cost. Prime cost includes both food and labor costs.