Food Cost Percentage
The share of food revenue consumed by the ingredients sold, calculated as food cost divided by food revenue. The standard measure of kitchen margin.
Also known as: Food cost ratio · Cost of goods percentage · COGS percentage
Formula
Food Cost % = Food Cost ÷ Food Revenue × 100
Unit: Percent
Food cost percentage is the share of food revenue that is consumed by the cost of the ingredients sold, over a period or on a single dish.
Formula
Food Cost % = Food Cost ÷ Food Revenue × 100
A kitchen consumes €7,200 of food during a month and takes €24,000 in food revenue. 7,200 ÷ 24,000 × 100 = 30. The food cost percentage is 30%: thirty cents of every euro of food revenue left again as ingredients.
Food cost here is the food consumed, not the food purchased. Over a month those differ by whatever moved in and out of the store cupboard, so the figure is opening stock plus purchases minus closing stock. Using purchases instead makes the percentage swing with delivery timing rather than with cooking, which is the most common way the number is read wrong.
Why it matters
Rent, salaried wages and energy barely move inside a single month. Ingredients do: they are the largest cost that rises and falls with what is actually sold, so they are the largest cost a kitchen can act on within a month. Tracking the percentage rather than the absolute amount separates the two questions a busy month raises — whether more was sold, and whether it was sold at the intended margin.
It is also the figure that makes a change measurable. A new supplier price, a reworked portion, a repriced dish and a run of over-production all show up in the same number, which is why it is read as a monthly series rather than as a single value.
What influences it
- Purchase prices — supplier terms, order sizes, seasonality, substitutions.
- Portion control — the gap between the specified portion and the plated one.
- Yield and trim — the usable share of a delivered weight, after bones, peel and loss in cooking.
- Waste and spoilage — over-production, storage failures, unsold prepared food.
- Menu mix — which dishes actually sell, since each carries its own percentage.
- Selling price — the denominator, and the fastest lever on it.
- Discounts, staff food and comps — cost that stays while revenue does not.
It is calculated at three levels, and they answer different questions: per dish (plate cost against menu price), per category (kitchen against bar), and per period (the month, against the month before).
In practice
A pasta dish costs €2.60 in ingredients and sells for €12.50. 2.60 ÷ 12.50 × 100 = 20.8%, comfortably inside the range a kitchen would target for a dry-goods dish.
But percentage is a ratio, and a ratio hides size. A €9 dish at 30% leaves €6.30 towards wages, rent and profit; a €28 dish at the same 30% leaves €19.60. Two dishes with an identical food cost percentage can contribute very different cash. This is why the percentage is read beside gross profit per dish and never on its own, and why a menu is rarely improved by chasing the lowest percentage on the card.
Do not confuse with food cost
Food cost is an absolute amount of money — €7,200. Food cost percentage is that amount expressed against revenue — 30%. A month can raise the first while lowering the second, which is what growth looks like, and a month can lower the first while raising the second, which is what a quiet month with unchanged waste looks like.
Prime cost is the related figure that adds labour to food and beverage cost. Because staffing and purchasing are traded against each other in practice, prime cost is the number an owner judges the whole operation by, and food cost percentage is the one a kitchen is steered by.