How to Calculate Food Cost Percentage (With Formula & Examples)

Food cost percentage is the share of every sales dollar that goes to the ingredients on the plate. The formula is Food Cost % = Cost of Goods Sold ÷ Food Sales × 100, where cost of goods sold equals beginning inventory plus purchases minus ending inventory. Most full-service restaurants land between 28% and 35%; the right target depends on your concept, your labor model, and what you charge. If you track only one number in your kitchen, this is the one.

The food cost percentage formula

Two formulas, used together:

Food Cost % = COGS ÷ Food Sales × 100

COGS = Beginning Inventory + Purchases − Ending Inventory

The second one is where most owners go wrong. Purchases alone are not your food cost. If you bought $28,000 of product but your shelves are $2,000 fuller than they were at the start of the month, you only used $26,000. Ignore inventory and your food cost swings wildly depending on when the big truck happened to show up.

That's why the calculation starts with an accurate count. If your counts are sloppy, your food cost is fiction — How to Do a Restaurant Inventory Count the Right Way covers the routine.

Worked example 1: a full month

COGS: $12,000 + $28,000 − $10,000 = $30,000

Food cost %: $30,000 ÷ $95,000 × 100 = 31.6%

Healthy for most full-service concepts. Note that "food sales" means food only — pull beverage out and calculate bar cost separately, because a 22% pour cost blended into your food number will hide a real kitchen problem.

Worked example 2: one week, catching a problem early

COGS: $9,800 + $7,400 − $9,100 = $8,100. Food cost: $8,100 ÷ $22,000 = 36.8%.

If this restaurant's normal is 32%, that's a five-point jump in a single week — roughly $1,000 that went somewhere other than the plate. Caught weekly, that's a conversation on Monday. Caught monthly, it's $4,000 gone before anyone notices. How to Do a Weekly Inventory in Under an Hour makes the weekly cadence realistic.

Worked example 3: a single dish (plate cost)

The formulas above give you period food cost. You also need it per item:

Plate Food Cost % = Plate Cost ÷ Menu Price × 100

A burger with $4.20 of ingredients (patty, bun, cheese, lettuce, tomato, sauce, fries, and the ramekin of ketchup) sold at $14 runs $4.20 ÷ $14 = 30%. The same burger at $12 is 35%. Costing every ingredient — including the ones people forget, like oil, garnish, and the to-go container — is the subject of How to Cost Out a Recipe Step by Step.

Theoretical vs. actual: the gap is the leak

Plate costs roll up into your theoretical food cost — what the month should have cost given what you sold. Period inventory gives you actual food cost. The difference is waste, over-portioning, spoilage, theft, and unrecorded comps.

A gap of 2–3 points is normal. Five or more means something specific is wrong, and Understanding Theoretical vs. Actual Food Cost walks through how to find it.

What's a good food cost percentage?

A higher number isn't automatically bad. A steakhouse at 38% food cost with a $65 average check makes more per seat than a café at 26% with a $12 check. What matters is contribution margin — the dollars left after the plate is paid for — and your total prime cost. Food cost and labor cost trade off against each other, which is why Understanding Prime Cost and Why It Matters is the companion to this guide.

How to lower a high food cost

Work through these in order; the first three cost nothing.

1. Re-cost your top 20 sellers. Ingredient prices drift up quietly. Anything whose plate cost has crept past your target gets repriced, re-portioned, or re-engineered.
2. Tighten portioning. Scales, scoops, and portion cups. An extra half-ounce of protein on 200 plates a day is a case of product a week. See Portion Control Tools and Techniques That Save Money.
3. Run a waste log for two weeks. Write down everything that hits the trash and why. Most kitchens find one or two items responsible for half the waste.
4. Check your invoices against your order. Short shipments, substitutions, and price changes that nobody flagged are common. Weigh a case now and then.
5. Get a second vendor quote on your ten highest-spend items and use it as leverage.
6. Menu-engineer. Move high-margin items to the spots guests look at first and train servers to recommend them.

A one-point drop in food cost on $1 million in annual sales is $10,000 straight to the bottom line — and most restaurants can find three to five points without changing a single recipe.

Track it weekly, not monthly

Monthly food cost is too slow to act on. Do a fast weekly count, calculate the percentage every Monday, and watch the trend. Your POS should be doing half the work: pulling product mix reports, tracking comps and voids, and, if it integrates with inventory, computing theoretical cost automatically. If your current system can't give you a product mix report in one click, that's a reason to look at a modern all-in-one like Cobblestone POS rather than paying $470+ a month for reporting add-ons.

Frequently asked questions

Should I include beverages in food cost? No. Calculate food cost and beverage (pour) cost separately, then combine them as total cost of goods sold for prime cost.

Do comps and employee meals count? Yes — they consume product without generating sales, so they raise your actual food cost. Track them separately so you know how much of your variance is deliberate.

How often should I take inventory? Weekly for high-value and high-volume items, full count at least monthly. The weekly number is the one you manage by.

What if my food cost is under 25%? Check that you're not under-portioning or overpricing to the point that guests notice. Very low food cost sometimes means you're leaving sales on the table.