Food Cost Percentage
Cost of food sold as a percentage of F&B revenue, measuring kitchen cost efficiency
What is Food Cost Percentage?
Food cost percentage is the share of food and beverage revenue that goes on the cost of food consumed. It shows how well a kitchen controls the cost of its ingredients.
It is a central profitability measure for restaurants and hotels.
How this KPI is measured
- Function
- Operations & Supply Chain
- Sub-function
- F&B Cost Control
- Industry
- Hospitality & Hotels
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Weekly / Monthly
- Formula
- (Cost of food consumed / F&B revenue) × 100
How to calculate it
Divide the cost of food consumed by food and beverage revenue, and multiply by 100.
For example, if food costing 30,000 was used to earn 100,000 of revenue, the food cost percentage is 30%.
Cost of food consumed is opening stock plus purchases minus closing stock. Track by menu item as well as in total.
Where it is used
Controlling margin
Keep food costs in line.
Pricing menus
Set prices from costs.
Finding waste and theft
Spot unexplained losses.
How to improve it
Tips and common mistakes
- Do not cut quality to cut cost.
- Compare with your target by menu item.
- Watch price changes from suppliers.
More Operations & Supply Chain kpi library
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