Having owned a restaurant myself, I have a keen understanding of how important food and beverage cost control is when it comes to generating restaurant profits.
In fact, during the 6-years I owned my own restaurant I used a food cost spreadsheet similar to the restaurant food cost calculator as a means of pricing my menu to achieve my food cost percentage goals.
In case you're not familiar with the manual method for determining food cost percentage, let's first take a look at the formula.
Food Cost Percentage Formula
To calculate the food cost percentage of an individual portion or menu item, you simply add up the cost of the ingredient(s) and divide that result by the menu price.
Here's an example of the food cost percentage formula in action.
Suppose you want to know what your food cost percentage is for a 5-ounce side of French fries that you sell for $1.50. Here is how you take the bulk purchase price of a case of French fries (consisting of say, 6 5-pound bags) and break it down into the portion cost so you can calculate the food cost percentage:
|Food Cost Percentage of 5-oz Serving of Fries Priced at $1.50|
|Cost of 1 case of French fries:||$19.00|
|Cost per bag||$19.00 ÷ 6||$3.17|
|Cost per pound||$3.17 ÷ 5||$0.63|
|Cost per ounce||$0.63 ÷ 16||$0.04|
|5-ounce portion cost||$0.04 x 5||$0.20|
|Food cost percentage||$0.20 ÷ $1.50||13.33%|
Of course, your target food cost percentage will depend on what type of restaurant you own and what your overhead and variable costs are.
In my case I tried to keep my breakfast food costs below 23%, my lunch food costs under 28%, and my supper food costs below 38%.