Food Cost Percentage: How Restaurants Can Calculate and Control It
Published: 10/9/2026
Category: Food & Restaurant
Food cost percentage tells a restaurant whether its menu makes money. How to calculate it for the whole kitchen and for each dish, what a healthy range looks like and how to bring it down without cutting quality.
Food cost percentage is the share of your sales spent on ingredients. It is the quickest way to see whether your menu is making money. Calculate it monthly for the whole kitchen and occasionally for each dish, and act when it creeps up.
The kitchen-level formula
Food cost % = (Opening stock + Purchases − Closing stock) ÷ Food sales × 100
Example: opening stock ₹80,000 + purchases ₹3,20,000 − closing stock ₹70,000 = ₹3,30,000 used. Food sales ₹10,00,000. Food cost = 33%.
The dish-level formula
Dish food cost % = Ingredient cost per plate ÷ Menu price (excluding GST) × 100
A paneer dish with ₹68 of ingredients sold at ₹240 has a food cost of about 28%.
What is a healthy range?
Many restaurants operate with food costs roughly between 28% and 35%, but the right figure depends on your format, rent and pricing. A quick-service outlet and a fine-dining restaurant will differ. Track your own trend month to month; a rise of a few points matters more than any industry average.
Why food cost creeps up
- Supplier prices rose, menu prices did not
- Portions vary by cook
- Wastage: over-prepping, spoilage, plate waste
- Theft or unrecorded staff meals
- Purchases not matched with deliveries
Seven ways to control it
- Standard recipes and portions for every dish, with a photo of the correct plating.
- Update recipe costs when supplier prices change.
- Check deliveries against purchase orders for quantity and rate.
- Daily prep plan based on expected covers, not habit.
- Record wastage: what was thrown and why. It reveals patterns.
- Menu engineering: promote high-margin popular dishes; rework or drop low-margin slow movers.
- Monthly stock count of key ingredients, so the kitchen-level number is real.
Use both numbers together
The kitchen-level number tells you whether there is a problem; dish-level costs tell you where. If the kitchen runs at 36% but every dish is costed at 30%, the gap is wastage, portioning or leakage.
Where BizFlow fits
BizFlow's TableFlow supports recipe costing, ingredient-level stock deduction from sales and wastage records, so you can compare theoretical and actual food cost every month.
Frequently asked questions
Q: How do I calculate food cost percentage?
A: (Opening stock + purchases − closing stock) ÷ food sales × 100 for the kitchen; ingredient cost per plate ÷ menu price × 100 for a dish.
Q: What is a good food cost percentage for an Indian restaurant?
A: Many operate between roughly 28% and 35%, depending on format and pricing. Watch your own trend month to month.
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