Food Cost Calculation

Food cost percentage is the ratio of ingredient cost to menu price, expressed as a percentage. The industry standard target is 28-35% for most restaurants, though fine dining may run 35-40% and pizza/pasta operations can achieve 25-28%. If a dish costs $4.20 in ingredients and sells for $14.00, its food cost is 30% ($4.20 ÷ $14.00 × 100). This single metric determines whether a dish is profitable and is the foundation of all menu pricing decisions.