Food Cost Percentage: The Number That Makes Restaurants

1. The 28–35% rule — and what it actually means

Food cost percentage = (cost of ingredients ÷ menu price) × 100. The industry rule of thumb says it should sit between 28% and 35%, with most healthy independents targeting around 30%.

But the rule bends by concept. Fine dining runs higher — 35–40% is normal when the ingredients are the product. Pizza and pasta can run at 20–25% because flour is cheap. Pub grub and burger joints live at 28–32%. The number to beat isn't a universal 30%; it's the figure your concept's maths demands after rent, labour, and overheads. A central-London site paying 15% of revenue in rent needs a lower food cost than a suburban freehouse. Work backwards from your fixed costs, not forwards from a rule.

2. A £12 burger, broken down to the penny

Let's cost a proper gourmet burger with fries — the kind independent burger joints sell for £12:

• Brioche bun: £0.35
• 180g beef patty (80/20 chuck): £1.40
• Cheddar slice: £0.25
• Lettuce, tomato, onion, pickles: £0.30
• House sauce (30ml): £0.15
• Fries portion (180g): £0.55
• Packaging (box, wrap, napkins): £0.40

Total plate cost: £3.40. Food cost: 28.3%.

That 28.3% is the ideal — what the recipe costs when everything goes right. The actual will be higher (see point 4). Notice what's doing the heavy lifting: the patty is 41% of the plate cost. In almost every dish, one or two ingredients dominate — find them, and you've found your margin lever. A 10p saving on the patty is worth more than halving the pickle cost.

Cost your own recipes with the Restaurant Recipe Food Cost & Menu Pricing Calculator — ingredient by ingredient, so you can see exactly which component to attack.

3. Menu price is set by psychology, not by cost-plus

Beginners cost a dish at £3.40 and price it at £10.20 (3× markup) because a book told them to. Professionals price at what the market pays — £12 — and then engineer the cost to fit. The direction matters.

Charm pricing works: £11.95 outsells £12.00 measurably. Price anchoring works: a £19 "signature" burger makes the £12 classic look reasonable. And the golden rule of menu engineering: your highest-margin items should sit in the top-right of the menu, where eyes land first. The dishes customers order most should be the dishes you most want them to order — if your bestseller is your worst-margin item, redesign one of them.

4. Ideal vs actual: the 3–5% that vanishes

Your recipe says 28.3%. Your accounts say 33%. The gap — typically 3–5 points — is waste, over-portioning, theft, and spoilage. It has a name: variance, and managing it is half the job.

The fixes are unglamorous: portion scales on the pass, not eyeballing. Prep sheets matched to forecasted covers, not habit. FIFO rotation (first in, first out) enforced, not assumed. Weekly stock counts — the restaurants that count weekly catch problems; the ones that count monthly discover them. One operator I know cut variance from 5% to 1.5% with scales and a whiteboard. On £400,000 of food sales, that's £14,000 a year found down the back of the sofa.

5. Labour and food cost are one number really: prime cost

Food cost percentage alone can mislead. A dish at 25% food cost that takes twenty minutes of skilled labour is worse than a 35% dish that plates in three minutes. The pros track prime cost = food cost + labour cost, targeting 55–65% of revenue combined.

This reframes decisions. That hand-battered fish at 30% food cost looks fine until you add the fryer cook's wages and it hits 68% prime. The prepped-in-advance curry at 32% food cost and minimal labour lands at 52%. Labour-light menus — bowls, flatbreads, anything batch-cooked — consistently outperform labour-heavy ones on prime cost, which is half the reason they've taken over.

6. Supplier maths: the invoice is not the price

Two suppliers quote mince at £6.50/kg and £6.10/kg. The cheaper one wins — unless their mince is 75% meat to the other's 85%, in which case the yield-adjusted price flips. Always cost the yield: weigh what you actually get after trimming, cooking loss, and waste.

Shrinkage is the silent killer. A joint that loses 30% of its weight in the oven costs 43% more per edible kilo than the invoice says. Cheap protein with high shrinkage routinely loses to pricier protein with low shrinkage. Cost the cooked kilo, not the raw kilo.

And negotiate annually, minimum. Suppliers count on inertia — the same invoice rolling for three years while market prices fell. A single afternoon of competitive quotes typically saves 5–8% on the protein bill. On £150,000 of annual protein spend, that's £7,500–£12,000 for one afternoon's work.

7. When to raise prices (and how to do it without losing regulars)

If your food cost has crept above 35% and stayed there for two months, your prices are wrong — full stop. The fix isn't cheaper ingredients (regulars notice, and they leave); it's higher prices, done right:

• Raise 2–4% across the board rather than 10% on one dish — nobody notices, everybody absorbs it.
• Time it with a menu reprint so it looks like a refresh, not a hike.
• Move your stars (high-profit, high-popularity dishes) slightly more; hold your workhorses steady.
• Never apologise on the menu. Just print the new prices.

Do this twice a year as routine maintenance and you'll never face the dreaded 15% catch-up hike that actually does drive people away.

The other percentage: beverage cost

Food gets the attention, but beverage cost runs on the same maths with very different targets. Draught beer and post-mix soft drinks cost 15–20% of sale price — the highest margins in the building. Spirits run 18–25% depending on the pour. Wine by the glass is the interesting one: a £9 glass from a £14 bottle (five 150ml pours) costs £2.80, or 31% — respectable, but the bottle that doesn't sell by the glass in time becomes waste, which is why wine programmes live or die on range discipline.

Coffee deserves its own line: a £3.50 flat white costs 40–60p in beans and milk — under 15%. Cafés aren't selling coffee; they're selling a 85%-margin delivery system for caffeine. If your restaurant has the space and footfall, a serious coffee offer is the cheapest margin improvement available.

Track beverage cost separately from food cost. Blending them hides problems — a 30% combined figure can mask 38% food and 18% beverage, and you'd never know which one to fix.

Pick your five bestselling dishes, cost each one properly including packaging, and calculate the food cost percentage. If any bestseller is above 38%, you have a pricing problem disguised as a popularity success. Fix the price or fix the recipe — but don't leave it.