What is the food cost formula?

Food cost percentage = (Cost of ingredients ÷ Menu price) × 100. To go the other direction and find a price from a cost, divide instead: Menu price = Ingredient cost ÷ target food cost percentage expressed as a decimal. A $5 plate cost at a 30% target gives $5 ÷ 0.30 = $16.67.

What is a good food cost percentage?

Most full-service restaurants target 28% to 35%. Fine dining often runs 30% to 38% because premium proteins carry higher cost, fast casual typically sits at 28% to 33%, and beverage-led concepts such as coffee shops run much lower at 15% to 22%. The right number depends on your concept, not on a universal benchmark.

Should I use food cost per dish or across the whole menu?

Both, for different jobs. Per-dish food cost tells you which individual items to reprice or re-engineer. Overall food cost, calculated as total COGS divided by total food sales, tells you whether the business as a whole is healthy. A menu can have several badly-priced dishes while the overall percentage still looks acceptable, which is exactly why per-dish costing matters.

Why is my calculated food cost different from my actual food cost?

The gap between theoretical and actual food cost is waste, over-portioning, spoilage, theft, and comps. Your recipe math describes the perfect world; your inventory numbers describe reality. A gap of 2 to 3 percentage points is normal. Consistently more than that points to a portioning or shrinkage problem rather than a pricing problem.

Food Cost Formula: How to Calculate Food Cost Percentage (2026)

Food cost percentage is the single most important number in restaurant finance. Here's the exact formula, how to use it for each dish, and what targets you should be hitting for your restaurant type.

The food cost formula

Food Cost % = (Food Cost ÷ Menu Price) × 100

If a dish costs $4 in ingredients and you sell it for $14:

($4 ÷ $14) × 100 = 28.6% food cost

71.4% gross margin

Food cost % and gross margin always add up to 100%. A 28% food cost is a 72% gross margin.

How to calculate food cost per dish

Food cost per dish is the sum of the cost of every ingredient in one portion:

Get your invoice for each ingredient
Calculate cost per unit: Package Cost ÷ Package Size
Multiply by quantity used: Cost per unit × Amount used
Add all ingredient costs together

Worked example: Caesar Salad

Ingredient	Pkg size / cost	Qty used	Cost
Romaine lettuce	$4.50 / head	0.5 head	$2.25
Parmesan (block)	$12 / lb	1 oz	$0.75
Caesar dressing	$8 / 32oz	2 oz	$0.50
Croutons	$6 / lb	1 oz	$0.38
Anchovies (optional)	$5 / tin	3 fillets	$0.30
Total food cost			$4.18

At $14 menu price: ($4.18 ÷ $14) × 100 = 29.9% food cost

70.1% gross margin ✓ (target: 68–72% for casual dining)

Food cost percentage benchmarks by restaurant type

What's a "good" food cost percentage depends on your restaurant type. Here are industry benchmarks:

Restaurant Type	Food Cost %	Why
Coffee shop (beverages)	15–22%	Cheap ingredients, high price tolerance
Pizza	22–28%	Low-cost dough + cheese base
Fine dining	25–30%	High prices justify higher cost
Casual / fast casual	28–33%	Volume compensates for tighter margins
Bakery	25–32%	Labor-intensive, premium ingredients
Food truck	28–35%	Lean menu, operational overhead high
BBQ / Steakhouse	30–38%	Expensive proteins are unavoidable
Seafood	32–40%	Volatile fresh fish prices

How to use food cost % to set your menu price

Flip the formula: if you know your food cost and target food cost %, you can calculate the right menu price:

Menu Price = Food Cost ÷ Target Food Cost %

Example: $4.18 Caesar Salad food cost, targeting 30% food cost:

$4.18 ÷ 0.30 = $13.93 → price at $14

Total food cost vs. food cost per dish

There are two related but different calculations:

Food cost per dish

Sum of all ingredient costs for one serving

Use for: Set individual dish prices

Total food cost %

(COGS ÷ Total food revenue) × 100

Use for: Monitor overall restaurant performance

COGS (cost of goods sold) is not the same as what you purchased this period — it's what you actually used. If you bought more than you sold through, some of that spend is sitting in inventory, not reflected in this period's cost. The formula:

COGS = Beginning Inventory + Purchases − Ending Inventory

Example: $1,000 beginning inventory, $3,000 in purchases, $1,500 ending inventory, $10,000 in food sales for the period:

COGS = $1,000 + $3,000 − $1,500 = $2,500

Total food cost % = $2,500 ÷ $10,000 = 25%

Using purchases alone ($3,000 ÷ $10,000 = 30%) would have overstated this period's real food cost, because $500 of that spend ended up as ending inventory rather than being sold. Track both. Per-dish food cost tells you whether each item is priced correctly. Total food cost % tells you whether your restaurant as a whole is performing within target — but only when it's built from actual COGS, not raw purchase totals.

Actual vs. ideal food cost

Your ideal food cost is calculated from recipes and menu prices. Your actual food cost comes from your invoices and sales reports. The gap between them — called food cost variance — reveals problems:

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Over-portioning

Use a kitchen scale and standardize portion weights

→

Waste and spoilage

Order to par, rotate FIFO, track waste daily

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Theft

Implement receiving controls and inventory counts

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Supplier price increases

Compare invoices monthly, reprice quarterly

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Recipe drift

Conduct periodic recipe audits with your kitchen team

A food cost variance of more than 2–3% consistently signals a systemic problem. Investigate it — don't accept it as normal.

Food Cost Formula: Calculate Food Cost Percentage the Right Way