Know what each plate costs
Whether you run a restaurant, a food truck or a bake sale, profit starts with knowing what a serving costs to make. Guessing usually underestimates, because the small items, oil, butter, spices and garnish, add up. Costing a recipe line by line takes a few minutes and shows exactly where the money goes.
How the calculation works
For each ingredient:
Cost used = package price × amount used ÷ package size
Use the same unit for the package size and the amount used: ounces, grams, cups or units. Then:
- Total recipe cost = sum of all ingredients + other costs.
- Cost per serving = total ÷ number of servings.
- Food cost percentage = cost per serving ÷ menu price (before sales tax).
- Price for a target food cost = cost per serving ÷ target percentage.
Worked example: lasagna for 8
- Lasagna noodles: $2.49 for 16 oz, 12 oz used = $1.87
- Ground beef: $5.49 for 16 oz, 16 oz used = $5.49
- Ricotta: $3.99 for 15 oz, all used = $3.99
- Mozzarella: $3.49 for 8 oz, 12 oz used = $5.24
- Sauce, onion, garlic, herbs and oil: $2.00
Total: $18.58, or $2.32 per serving. On a menu price of $14, the food cost is 16.6%, well under a 30% target, leaving a gross margin of $11.68 per plate. To hit exactly 30%, the price would be $7.74, useful if you sell to a cafeteria or catering client with tighter prices.
Benchmarks
Many full-service restaurants aim for a food cost of 28 to 35%. Pizza, pasta and coffee drinks can run well under 25%; steak and seafood often run over 35%. A low percentage on a cheap dish can bring in fewer dollars than a higher percentage on an expensive one, so look at the margin in dollars as well.
Getting accurate numbers
- Price what you buy, not what you serve. Trimming, peeling and cooking losses raise the real cost. If 10 lb of potatoes gives 8 lb peeled, the usable cost is 25% higher.
- Update prices at least every few months; food prices move.
- Include everything on the plate: bread, butter, sauces, garnish and the side salad.
- Portion consistently, with scales and scoops, or your costing is fiction.
- Add a buffer of a few percent for spoilage, tasting and staff meals.
Food cost is only part of the picture. Labor, rent, utilities and packaging also need to be covered by the menu price. For scaling a recipe to more servings, use the recipe scaling calculator, then cost the new quantities here.