Food cost is the cost of a dish’s ingredients relative to its selling price. Expressed as a percentage, it tells you how much of every euro you take in goes on ingredients. A dish costing €4 in ingredients and selling for €16 has a food cost of 25%.
It’s the headline metric of kitchen cost control: it keeps margins in check and shows which dishes earn and which erode profit. A food cost around 30-35% is generally considered healthy for traditional restaurants, though the “right” number depends on the format.
Food cost and prime cost
Food cost alone doesn’t tell the whole story: together with labour cost it forms the prime cost, the sum of a restaurant’s two heaviest costs. Watching both is what separates a busy-but-losing venue from a profitable one.
To act on food cost you work on portioning, waste, purchasing and — above all — menu engineering, which uses food cost to set prices and positioning. Here’s how to calculate and reduce it.
Frequently asked questions
- What should a restaurant's food cost be?
- It depends on the format, but a food cost of 30-35% is generally seen as healthy for traditional restaurants. What matters is comparing it per dish and over time, not just the average.
- What's the difference between food cost and prime cost?
- Food cost is the share taken by ingredients alone; prime cost adds food cost and labour cost — the two biggest costs — and is the most complete measure of operating margin.