Food Cost in Restaurants: What Is It and How Can You Control It?

Food Cost is one of the key metrics in restaurant management. It shows the share of revenue that goes toward the ingredients used to prepare sold dishes.

A restaurant can have strong sales, a busy dining room, and a large number of orders while still generating less profit than expected. One of the reasons can be poor control over ingredient costs.

What affects Food Cost?

1. Incorrect portion sizes

When more ingredients are used than specified in a recipe, the actual cost of the dish increases.

2. Waste and write-offs

Spoiled products, preparation mistakes, expired ingredients, and unjustified write-offs directly increase costs.

3. Inaccurate inventory records

If actual stock levels differ from system records, it becomes difficult to understand how much product was actually consumed.

4. Increasing purchase prices

Supplier price changes directly affect dish costs. Restaurants should therefore monitor purchasing prices and margins regularly.

5. Missing or inaccurate recipes

Without standardized recipes, it is difficult to control ingredient quantities and calculate the actual cost of each portion.

How is Food Cost calculated?

A simple approach is to divide the cost of ingredients used during a specific period by the revenue generated during the same period and multiply the result by 100%.

For example, if a restaurant generates 100,000,000 UZS in revenue and uses 30,000,000 UZS worth of ingredients, its Food Cost is 30%.

However, the percentage alone is not enough. Restaurants should compare theoretical food cost with actual food cost and investigate the reasons for any differences.

How can you reduce Food Cost? Create accurate recipe cards. Standardize portion sizes. Perform regular inventory counts. Track write-offs and waste. Monitor supplier prices. Analyze the best-selling and most profitable dishes. Compare actual ingredient usage with theoretical usage. How does Keel help control Food Cost?

Keel brings sales, inventory, recipe cards, write-offs, and analytics together in one system. This allows restaurants to track product movement, monitor stock levels, and calculate dish costs using up-to-date operational data.

Food Cost is more than a percentage in a report. It reflects how effectively a restaurant manages purchasing, inventory, recipes, portions, and waste.

The more accurate the data, the easier it becomes to identify where money is being lost and which operational processes need to change.