Costing basics 7 min read

How to calculate food cost percentage

The single number every restaurant operator already speaks. Here is how to calculate it cleanly, avoid the common mistakes, and use it to price with intention.

Food cost percentage is the most widely used margin metric in the restaurant industry. It tells you what fraction of a dish's selling price is consumed by the raw ingredients and packaging needed to make it. Once you know this number for every dish on your menu, you can price intentionally, catch margin problems before they hit your bottom line, and make supplier negotiations with real data.

The formula

Food cost % = (cost per portion divided by selling price) x 100

This is simple to state and easy to get wrong, because cost per portion has to be built carefully from the ground up.

How to calculate cost per portion step by step

Cost per portion is the sum of every ingredient, prep recipe component, and packaging item that goes into one serving.

List every ingredient and its quantity per portion.

Find the cost per usage unit for each ingredient. That is purchase price divided by purchase quantity, adjusted for yield loss.

Multiply each ingredient's unit cost by its usage quantity in the recipe.

Sum all ingredient line costs. Add the cost of any prep recipe components used (sauces, marinated proteins, dressings).

Add packaging: boxes, cups, lids, bags, labels. If it leaves your kitchen with the food, it is a cost of the sale.

The total is your cost per portion.

A worked example

A chicken sandwich uses: chicken breast 150 g at $0.0075/g ($1.13), bread roll $0.80, lettuce 25 g at $0.0044/g ($0.11), house mayo 30 g at $0.0065/g ($0.20), kraft box ($0.15).

Total cost per portion: $2.39. Selling price: $9.00. Food cost % = $2.39 divided by $9.00 x 100 = 26.6%.

What is a good food cost percentage?

Targets vary by concept, channel, and dish category. Rough US benchmarks:

Coffee and espresso drinks: 18 to 25%

Smoothies and fresh juices: 25 to 35%

Salads and grain bowls: 28 to 32%

Sandwiches and wraps: 25 to 32%

Pasta and rice dishes: 25 to 30%

Protein mains (burgers, steaks, fish): 30 to 38%

Desserts and baked goods: 25 to 32%

Delivery kitchen overall: 28 to 34%, because delivery commissions require tighter ingredient margins

These are starting points, not rules. Your actual target depends on your labor model, rent, and overall cost structure. A food truck with low overhead can sustain a higher food cost than a full-service restaurant paying high rent and front-of-house staff.

Your goal is not the lowest possible food cost. Some premium items carry a higher food cost percentage and still generate more gross profit per sale than lower-cost dishes. A $30 steak at 38% food cost ($18.60 gross profit) earns more per sale than a $7 salad at 25% food cost ($5.25 gross profit).

How to use food cost % to set prices

Work backwards from your target: suggested price = cost per portion divided by target food cost %.

If your sandwich costs $2.39 and your target food cost is 30%, the suggested price is $2.39 divided by 0.30 = $7.97. That is a floor. If the market supports $9.00, charge $9.00 — you are just running a better margin.

What happens to food cost on delivery platforms?

Platform commissions (DoorDash, Uber Eats, Grubhub) do not change your food cost percentage — they reduce what you keep from each sale. A dish with a 30% food cost earns $6.30 gross profit at $9.00 dine-in. On delivery at $9.00 with a 27% commission, the platform takes $2.43, leaving $3.57 gross profit before packaging and fixed fees.

This is why delivery requires a separate profitability calculation on top of food cost. A dish can be on-target for dine-in and underwater on delivery at the same price.

Common mistakes to avoid

Using purchase price per unit instead of cost per usage unit. A 5 lb bag of flour costs $4.50, but if you use only 200 g per recipe, the cost is (200 divided by 2,268) x $4.50 = $0.40, not $4.50.

Ignoring trim yield. A chicken breast loses 10 to 15% of weight when cooked. The usable cost per gram is higher than the raw purchase price would suggest.

Leaving packaging out. A 16 oz iced cup at $0.16, across 200 drinks per day, is $32 per day or roughly $960 per month not showing up in your margin math.

Calculating food cost once and forgetting it. Ingredient prices change. If your main protein goes up 15%, your food cost % goes up too. Check whenever a supplier invoice looks different.

Frequently asked questions

What is a good food cost percentage for a cafe? Most cafes target 25 to 30% overall, with drinks running lower (18 to 25%) and food items higher (28 to 35%). The blended rate across all menu items is what matters most for profitability.

Does food cost percentage include labor? No. Food cost % covers ingredients and packaging only. Labor cost is tracked separately, and the two combined are often called prime cost.

How often should I recalculate food cost? Any time an ingredient price changes meaningfully, or at minimum monthly. In high-inflation periods, quarterly is too slow to catch problems.

What is the difference between food cost percentage and gross margin? They are two views of the same relationship. Food cost 30% means gross margin 70%. They always add to 100%.

Can food cost percentage be too low? Yes. If you are chasing the lowest possible food cost by buying cheap ingredients, cutting portions, or omitting expensive components, you may be degrading the product in ways that hurt repeat business. A sustainable food cost is one you can maintain while delivering the dish your customers expect.

Try it on your own menu.

Cost a dish in minutes. No spreadsheets.

Cost your first dish

Free tools

Put the math to work in seconds. No signup required.

Food cost calculatorCheck food cost %, gross profit, and margin on any dish.Open calculator Recipe cost calculatorAdd up ingredients to get total recipe cost and cost per serving.Open calculator