Guide
Your food cost percentage is only as good as the prices behind it.
The formula, and why it is not the hard part
Two numbers, one of which you do not really know
Food cost percentage is what you paid divided by what you charged. Nobody gets that wrong. What they get wrong is the first number.
What you charged
Known exactly. It is on the invoice, and there is no version of this number that is a guess.
What the food cost you
Almost never known exactly. Some dishes are costed from real invoices, some from a recipe you priced once, some from nothing at all — and a single percentage hides which is which.
The part nobody writes about
Four different things all get called “the food cost”
These are the rungs CaterCloud puts on every costed dish, weakest first. The distinction is not academic: a number on the first rung and a number on the last look identical in a spreadsheet.
Named
You have a dish. Nothing behind it. There is no cost here, and the honest output is a gap rather than a zero.
Estimated
A number from a benchmark or a model. Useful for a rough quote, never for deciding whether the year worked.
Recipe’d
A real recipe with real quantities — but not every ingredient has a confirmed price yet. Better, still not fact.
Actuals
Every ingredient priced from what you actually paid. This is the only rung whose percentage you should make decisions on.
01The rung is the WEAKER of two independent things: where the money came from, and where the quantity came from. A perfectly priced pantry behind an invented recipe is still an estimate.
02A dish cannot climb past Estimated on price alone. Somebody has to have said how much of the ingredient the dish actually uses.
03A package is the weakest of its dishes. Confirming one does not make the total certain, and the figure keeps its tilde until the last one is confirmed.
04Every rung is rendered differently on every surface, on purpose — decision 0088. An estimate that looks like a fact is worse than no number.
Put plainly
A 28% food cost you cannot trace is not a measurement. It is a mood.
rung = weaker of (price provenance, quantity provenance) — src/lib/kitchen/costSpine.ts. It landed before any estimator existed, so an estimator could never mis-badge its own output even once.
What to actually do
Four steps, in the order that pays
Costing every dish you have ever sold is a project nobody finishes. Costing the right ones takes an afternoon.
- 01Start with what you sell mostNot your most expensive dish — your most frequent one. A 5% error on something you serve two hundred times a year costs more than a 30% error on the thing you do twice.
- 02Price the ingredient, not the dishWhat you pay for the pack, and how many serves you actually get out of it after trim. That second half is where most costings quietly become fiction.
- 03Let the package roll upOnce the dishes are costed, the per-head figure follows: the average of each course’s options weighted by how many each guest gets. A guest choosing one of three eats one of them.
- 04Re-check when the invoice changesNot annually. When a supplier moves, the dishes using that ingredient move with it, and the percentage you quote from should move the same day.
Questions
What caterers ask about food cost
- What is a good food cost percentage for catering?
- Commonly quoted ranges sit around 25–35% for catering, lower than a restaurant because catering carries more labour and logistics per dollar of food. But a single right number does not exist: a canapé function and a plated wedding have different shapes, and your own history is a better guide than anybody’s benchmark.
- How do I calculate food cost percentage?
- Divide what you paid your suppliers for the job by what you charged for it. That is the whole formula, and it is the only figure in this guide that needs nothing from anybody else. The hard part is not the division — it is knowing the top number accurately.
- Why is my food cost percentage always wrong?
- Almost always because the ingredient prices behind it are stale. A dish costed eighteen months ago carries eighteen months of supplier increases invisibly, and the percentage looks fine right up until the year does not. That is a provenance problem, not an arithmetic one.
- Should food cost include wastage?
- It should, or the number flatters you. If you buy a 1.2 kg side of fish and serve 900 g of it, the cost per serve is the whole side divided by the portions you actually got — not the theoretical yield. A costing that ignores trim is a costing that will surprise you.
- Does a lower food cost percentage mean a better business?
- Not on its own. You can drive it down by serving worse food, and lose the customers who were paying you for the good version. It is a diagnostic, not a target — useful because it moves when something changes, not because a particular value is virtuous.
Next: how to price catering, with the working shown — the sum this number feeds into.