Food Cost Percentage

It shows what fraction of your menu sales went to buy the ingredients and products you served.

Formal definition

Food cost percentage equals total food and beverage COGS divided by total food sales, expressed as a percentage for a given period.

Why it matters

Food cost that drifts above industry norms silently erases profit before labor and rent are even considered.

Where you see it

• Restaurant weekly prime cost reviews
• Toast, Square, or POS inventory reports
• Chef and operator pre-shift meetings
• Franchise operations audits
• Hospitality management training programs

Worked example

1. A café records $30,000 in weekly food sales.
2. Ingredient purchases and spoilage total $9,600.
3. Food cost % = $9,600 ÷ $30,000 = 32%.
4. Interpretation: 32 cents of each sales dollar paid for food — within a typical full-service band.

How Business metrics calculates it

Food and beverage cost (cost of what you sold on the restaurant calculator) ÷ Revenue × 100.

The range we use for status labels

On Business metrics, the status band for this KPI is roughly 28 to 35. Lower values are generally healthier in this band. Your niche can sit outside it honestly — the label is a prompt to read the coaching, not a certificate.

Where people fool themselves

Food cost % using revenue that includes gift cards sold but not redeemed will look artificially good. Use food sales, or at least the same revenue definition every month so the trend is real.

Run it on your own numbers: the Food & Beverage calculator.