Restaurants calculate food cost as ingredient cost divided by menu price, times 100. In this page's example, a plate that costs QAR 8 to make and sells for QAR 32 has a food cost of 25%. Recipe cost is the ingredient cost of one portion, counted on usable weight after trimming. For a whole month, use opening stock plus purchases minus closing stock, divided by food sales. This page covers the formula, recipe cost per portion, usable yield, a worked example in QAR, and what happens when supplier prices move.
Key takeaways
Food cost % is ingredient cost divided by menu price, times 100; a QAR 8 plate selling at QAR 32 is 25% (example numbers).
Recipe cost is counted on usable weight after trimming, not purchase weight.
For a month, use opening stock plus purchases minus closing stock, divided by food sales.
When a supplier price moves, a spreadsheet still shows the old cost; software linked to purchasing re-costs the recipe.
You need both numbers. The recipe number says what a dish should cost. The monthly number says what your kitchen did cost. The gap between them shows where money leaks.
The food cost percentage formula
Food cost % = ingredient cost / menu price x 100
Use the cost of one portion and its menu price.
For a week or a month, use the stock method:
Period food cost % = (opening stock + purchases - closing stock) / food sales x 100
Opening and closing stock come from your counts, and purchases are what you received in between. Without a reliable count at both ends, the result means nothing. A National Restaurant Association (US) piece on menu pricing strategy says costing must be accurate before pricing, and quotes food cost targets of about 24 to 26 percent. Pricing the dish is covered in how to price menu items from food cost.
How do you calculate food cost for one menu item (cost per portion formula)?
Cost per portion = total recipe cost / number of portions. Then divide the cost per portion by the menu price to get that item's food cost percentage.
List every ingredient, including sub-recipes such as a sauce or dough, and packaging.
Take the current purchase price of each.
Adjust each price for usable yield, explained next.
Multiply by the quantity the recipe uses and add the lines. The total is the batch cost.
Divide the batch cost by the number of portions.
Then apply the food cost formula with the menu price.
What is usable yield, and why does it change the cost?
Usable yield is the share of what you buy that reaches the plate after peeling, trimming, boning and cooking loss. You pay for the full weight and serve part of it.
Cost per usable kilo = purchase price per kilo / usable yield %
Example: chicken at QAR 20 per kilo with 80% usable costs QAR 25 per usable kilo. Costing it at QAR 20 understates the chicken by QAR 5 on every usable kilo. WRAP, a UK food waste charity, publishes guidance on measuring and reporting food waste in hospitality and food service that helps businesses see where savings are. To count properly, follow the restaurant stock count steps.
Worked example: one plate and one month
Example only. Round, hypothetical numbers. They are not Wady data.
One plate of chicken rice:
Chicken: 200 g usable at QAR 25 per kilo = QAR 5.00
Rice: 100 g = QAR 0.60
Vegetables and sauce: QAR 1.40
Packaging and oil: QAR 1.00
Recipe cost per portion: QAR 8.00
The menu price is QAR 32, so food cost % = 8 / 32 x 100 = 25%.
One month: QAR 20,000 opening stock + QAR 60,000 purchases - QAR 22,000 closing stock = QAR 58,000 of food used. Food sales were QAR 200,000, so period food cost % = 29%.
Your recipes average 25% and the month says 29%. Four points on QAR 200,000 of sales is QAR 8,000 of stock that left without a sale. Waste, oversized portions, unrecorded transfers and typing errors cause this. Operators in Qatar say the recipe lists 100 grams and the cook used 200.
Why does food cost drift when supplier prices change?
The menu price stays put while ingredient prices move. Continue the example: chicken rises from QAR 20 to QAR 22 per kilo. A usable kilo now costs QAR 27.50, the plate costs QAR 8.50, and food cost % is 26.6%. Over 1,000 plates a month that is QAR 500 more, with nothing changed on the menu or in the kitchen. In a National Restaurant Association (US) article on menu price increases, 91 percent of surveyed operators had raised prices, and the pricing expert advised smaller, more frequent increases. More on tools is in recipe costing software.
A costing sheet typed three months ago still says 25%. You find out when the invoices add up.
Spreadsheet or costing software?
Spreadsheet | Costing software linked to purchasing | |
|---|---|---|
Price changes | Someone types each new price, then checks which recipes use it | Recipe costs recalculate when a price changes |
Usable yield | A column you update by hand | Yield stored with each ingredient |
Sub-recipes | Linked cells that break when rows move | A sub-recipe feeds the recipes that use it |
Errors | A wrong digit stays until someone finds it | Odd numbers get questioned at entry |
Best for | A few dishes and one person who owns the file | Many recipes, several outlets, prices that move |
How Wady Central helps with food cost and recipe cost
Wady Central is Wady's paid product for multi-branch groups and central kitchens, built in Qatar. It costs recipes the same way for one café or a group of outlets.
Real yield. Recipes are costed on usable weight after trim, so cleaning loss sits in the price.
Your sheet, as it is. Your costing spreadsheet imports with your own columns.
Never stale. A recipe is re-costed the moment a price moves, and price rises and falls are flagged on delivery. In the Wady Central overview, butter came in dearer and a croissant moved from QAR 1.2262 to QAR 1.3078 that morning.
What changed, and why. The Daily Brief names the recipes that moved cost and the ingredient behind each move, in riyals.
Wady Central works alongside the POS and accounting you already have, and you can export all your data any day, free. Over 100 businesses in Qatar already use Wady, including Crave Holdings and OMC. See the pricing page for the plans.
See recipes and costing, purchasing and the Wady Central overview. A walkthrough on your own costing sheet takes 20 minutes.
FAQ about food cost and recipe cost
What is food cost percentage?
Food cost percentage is ingredient cost as a share of the selling price: divide ingredient cost by menu price and multiply by 100. A dish that costs QAR 8 and sells for QAR 32 has a food cost of 25% (example numbers).
What is the difference between food cost and recipe cost?
Recipe cost is the ingredient cost of one portion of one dish. Food cost measures that cost against the menu price, or measures total food used against total food sales over a period.
How often should I recalculate food cost?
Recalculate a recipe whenever a supplier price for one of its ingredients changes. Calculate period food cost each time you count stock, weekly or monthly.
Can Wady Central import my costing spreadsheet?
Yes. It imports with your own columns. See recipes and costing.
Frequently asked questions
Your kitchen's stock, recipes and costing, with numbers from real records.
