Food cost percentage – ingredient cost as a percentage of revenue

What is food cost percentage?

Ingredient cost as a percentage of a restaurant's revenue is called food cost percentage. It shows how large a share of the restaurant's total revenue is spent on ingredients. It's an indicator of how cost-effectively you buy and use ingredients.

Why does it matter?

A well-controlled food cost percentage is crucial to maintaining good profitability. Keeping this figure low without compromising on food quality can help maximise margins.

How can you improve it?

Optimise your purchasing strategy by negotiating better prices, buying in bulk and minimising waste. Use precise recipes and portion controls to make sure every ingredient is used efficiently.