How to calculate food cost percentage.
The formula, a worked hotel kitchen example, how to handle board rates, why food cost drifts and seven practical ways to bring it back.
By the Tivuzo team · Updated
Food cost percentage = cost of food used ÷ food revenue × 100. Cost of food used = opening food stock + food purchases (or issues to the kitchen) − closing food stock, adjusted for staff meals and transfers. Many hotel kitchens aim for roughly 25–35% depending on the menu and market; what matters most is knowing your number every week and spotting when it moves.
The formula
Cost of food used = opening stock + purchases − closing stock − staff meals − transfers out (for example, fruit sent to the bar)
Food cost % = cost of food used ÷ food revenue (excluding VAT) × 100
If your kitchen draws from a main store, use issues to the kitchen instead of purchases, and count the kitchen's own stock at the start and end of the period.
Worked example: one month
| Item | KSh |
|---|---|
| Opening kitchen stock | 180,000 |
| Issues from main store and direct deliveries | 1,240,000 |
| Closing kitchen stock | (210,000) |
| Staff meals | (95,000) |
| Fruit transferred to the bar | (15,000) |
| Cost of food used | 1,100,000 |
| Food revenue (restaurant, room service, meals in board rates) | 3,450,000 |
| Food cost % | 31.9% |
Meals in board rates
For bed and breakfast, half-board and full-board guests, part of the room rate is food revenue. Split it out using the meal plan price, so breakfast eaten by B&B guests counts as food revenue. Otherwise food cost looks terrible and room revenue looks better than it is.
Why food cost drifts
| Cause | Sign |
|---|---|
| Supplier prices rising | Purchases up, covers flat. |
| Short or poor deliveries accepted | Received quantities don't match orders. |
| Over-portioning | High cost on dishes with no price change. |
| Waste and spoilage | Bins full, stock thrown out unrecorded. |
| Theft | Stock variance on high-value items: meat, fish, oil. |
| Menu mix | More of the expensive dishes sold. |
| Unrecorded staff meals | Cost high on days with more staff on shift. |
Seven ways to bring it back
- Receive against the orderWeigh and count deliveries; reject or note short and poor-quality items.
- Compare supplier prices monthlyFor the twenty items that make up most of your spend.
- Issue, don't open the storeThe kitchen requests; the storekeeper issues and records it.
- Standard portionsWeigh portions for the most expensive dishes and train the line.
- Record wasteSpoiled food is recorded with a reason; patterns show up.
- Count weeklyAt least the high-value items; the variance points to the problem.
- Cost the menuKnow the cost of each dish and price it accordingly.
In Tivuzo
Deliveries are received against the purchase order, issues to the kitchen move stock and post food cost, waste is recorded with a reason, and counts post their variance. Meal plans separate food revenue in board rates. So food cost this week is a number you read, not one you work out. See inventory and stores, procurement and hotel stores control.
Food cost questions
What is a good food cost percentage for a hotel?
Many hotel kitchens work in a range of roughly 25–35%. Fine dining with expensive produce can run higher; buffets and set menus can run lower. Track your own trend.
Is food cost calculated on purchases or usage?
On usage: opening stock plus purchases minus closing stock. Purchases alone swing with delivery days.
Should staff meals be in food cost?
Take them out of food cost and record them as a staff cost, so the kitchen's number reflects what guests ate.
How often should a hotel calculate food cost?
Weekly for control, monthly for the accounts.
What about beverage cost?
Beverage cost uses the same formula with bar stock and bar revenue. See bar stock control.
Last updated by the Tivuzo team.