How Food Cost Percentage Is Calculated
Food cost percentage tells you what fraction of every food revenue dollar went toward the cost of ingredients sold. It is calculated in two steps.
COGS = Opening Inventory + Purchases − Closing Inventory
Food Cost % = (COGS ÷ Food Revenue) × 100
Example: Opening $12,000 + Purchases $8,500 − Closing $11,200 = COGS $9,300. Divided by $32,000 revenue = 29.1%.
Benchmark: Is Your Number Good?
| Restaurant Type | Healthy Range | Warning Zone |
|---|---|---|
| Full-Service Casual | 28–32% | Above 35% |
| Fine Dining | 30–38% | Above 40% |
| Fast Casual | 25–30% | Above 33% |
| Bar / Gastropub | 20–28% | Above 32% |
| Pizza | 25–32% | Above 36% |
If Your Food Cost Is Above Benchmark
Work through these three levers in order — they are ranked by speed of impact and ease of implementation.
1. Compare your supplier prices
The fastest lever. Most operators find a 10–15% price gap when they compare distributor prices for the first time. A 3-point food cost improvement on a $1M restaurant adds $30,000 to gross profit annually — without changing your menu or your staff.
2. Tighten portion control
Weigh your top 5 proteins during a busy service and compare against your recipe card spec. A 10% over-portion on chicken breast alone adds 1–2 points to food cost across a week.
3. Audit your waste
Run a waste log for one week — a simple notepad in the kitchen where staff record every item discarded and why. Most operators are surprised by the dollar value of their top 3 waste items.
Fix the Supplier Pricing Problem First
Upload your current distributor price sheet and compare it against Sysco, US Foods, GFS, or any competitor. FrillPick shows you the price difference on every line item.
Compare My Prices Free21-day free trial · Cancel anytime
Frequently Asked Questions
How do you calculate food cost percentage?
Food cost percentage = (Cost of Goods Sold ÷ Food Revenue) × 100. COGS = Opening Inventory + Purchases − Closing Inventory. For example: opening inventory $12,000 + purchases $8,500 − closing inventory $11,200 = COGS $9,300. Divided by $32,000 revenue × 100 = 29.1% food cost.
What is a good food cost percentage?
A good food cost percentage is 28–32% for full-service casual dining, 25–30% for fast casual, 20–28% for bars, and 30–38% for fine dining. If your food cost is above 35% in full-service or above 32% in fast casual, it warrants an audit of your supplier pricing, portion sizes, and waste.
How often should I calculate food cost percentage?
Weekly. Monthly tracking means a problem that started week one is not visible until week four. Calculate every Monday before placing orders. Four data points per month lets you spot trends and respond before they compound into significant margin loss.
What causes high food cost percentage?
The three most common causes are: overpaying on supplier pricing (fastest to fix), portion control drift (staff over-portioning proteins), and food waste from over-prepping or poor FIFO rotation. Start with supplier price comparison — most operators find a 10–15% price gap they were unaware of.
What is the difference between food cost percentage and prime cost?
Food cost percentage measures only food and beverage costs as a percentage of revenue. Prime cost adds labor cost to food cost. A healthy prime cost is 55–65% of revenue. Use the prime cost calculator to see the full picture.