What is food cost?
Food cost measures the ingredient cost of menu items and helps restaurants understand the relationship between recipe cost and selling price.
How is food cost calculated?
Restaurants calculate the cost of every ingredient used in a recipe according to the portion quantity, then compare the total recipe cost with the menu price.
Food cost is not the same as net profit because labor, rent, utilities, taxes and other operating costs must also be considered.
Why does food cost increase?
- Ingredient price increases
- Inconsistent portions
- Waste
- Inventory errors
- Unrecorded complimentary items
- Outdated menu prices
Standard recipes, accurate purchasing costs and regular inventory counts are essential for better food cost control.