Menu Costing: How to Calculate and Control Food Cost
How to calculate true plate cost including yield, trim and waste, what food cost percentage to target, and how to fix dishes that lose money.
Last reviewed .
Food cost percentage is the number most restaurant managers quote and few can calculate correctly. The version on a standard spreadsheet excludes yield loss, trim, waste and the true ingredient cost of a plated dish — which means it is not a conservative estimate, it is an optimistic one.
Plate cost: the real calculation
For each dish, the cost of one portion is the sum of each component's cost, where each component's cost accounts for what you actually use rather than what you buy.
Component cost = (purchase price ÷ usable yield %) × portion weight
The usable yield is where most spreadsheets go wrong. A cauliflower yielding 45% usable, or a whole fish yielding 35%, changes the plate cost materially.
Yield: the number to get right
Usable yield is the percentage of the purchased item that ends up on the plate.
| Item | Typical usable yield | What is lost |
|---|---|---|
| Whole chicken | 65–70% | Bone, skin, cartilage |
| Cauliflower | 40–45% | Outer leaves, stalk |
| Whole fish | 30–40% | Head, frame, fins |
| Celery | 55–60% | Outer leaves, base |
| Beef primal | 75–85% | Trim, fat cap (unless sold on) |
| Filleteted fish | 75–85% | Bones, skin |
| Lettuce | 55–65% | Outer leaves, core |
What food cost percentage should be
It depends on the category, and quoting a single target is misleading:
- Fine dining — 28–32%.
- Casual dining / mid-market — 28–32%.
- Quick service / high volume — 25–30%.
- Food delivery / platform — target lower, because platform commission adds 20–30% on top before the food is even costed.
- Pub with a wet offer — blended cost is higher; assess drink margin separately.
Treat these as a starting point, not a rule. What matters is the trend and the variance: stable cost with rising sales beats a lower percentage on falling sales.
Prime cost — the number that actually pays the wages
Food cost alone is not the constraint. Prime cost is food plus labour, expressed as a percentage of sales, and it is the number that determines whether the business is viable.
A restaurant with 30% food cost and 38% labour is in serious trouble. The same business with 30% food and 28% labour has room to absorb a bad month. Prime cost should typically land between 55–65%, depending on the concept and the local wage environment.
The costing workflow that works
- Pull the current menu and identify the top 20 dishes by sales volume and by revenue margin.
- Cost those accurately, including yield and waste.
- Calculate food cost and prime cost per dish and in aggregate.
- Flag anything outside your target band.
- Act: reprice, re-portion, substitute, or remove.
Fixing a dish that loses money
In order of least disruption:
Re-portion
The most common real problem is an unmeasured portion. Weigh it before deciding the dish is wrong.
Substitute
Swap the ingredient that costs the most per unit of function. A different cut, a different size, a different supplier — not a cheaper version of the same idea.
Re-engineer
Change the dish to cost what you need it to cost, keeping the flavour profile the guest pays for. Often the garnishes carry the cost, not the protein.
Reprice
Legitimate, but only where the dish still delivers. Raising price on a dish nobody chooses fixes nothing.
Remove
Sometimes the right answer. An item at 45% food cost that 2% of guests order is a menu liability, not an asset.
How often to review
- Weekly — top-seller variance check against expected yield.
- Monthly — full costing review of the whole menu.
- On every supplier change — because prices move and specs change without notice.
- On every menu change — before the dish goes live.
The manual trap
Manual costing breaks as soon as anything changes, and it breaks silently. A supplier switches, the recipe drifts, and the number on the spreadsheet no longer describes the business. The recurring failure is not that someone is careless — it is that a monthly manual process cannot catch every change as it happens, so the costed price is always describing last month.
Calculating from your actual menus and specifications, with change tracking built in, is what makes the number reliable rather than approximately right.