What Is Food Cost Percentage? How to Calculate and Benchmark Yours

Two restaurants can sell the exact same dish at the exact same price and make very different money on it. Food cost percentage is the number that explains why.

Here's what you'll learn:

• What food cost percentage actually measures
• How to calculate it
• What counts as a "good" number
• What moves it up or down

What Is Food Cost Percentage?

Food cost percentage is the portion of your revenue that goes toward the ingredients you sold. It answers one question: for every dollar a dish brings in, how much of that dollar did the food itself cost you?

A lower percentage means more of each sale is left over to cover labor, rent, and profit. A higher percentage means less room for everything else.

How to Calculate Food Cost Percentage

Use this formula:

Food Cost % = (Cost of Goods Sold ÷ Revenue) × 100

Cost of Goods Sold (COGS) is the total cost of the ingredients that went into what you sold over a given period. Not what you bought, what you actually used.

Example: if your COGS for the week is $3,500 and your food revenue is $10,000, your food cost percentage is 35% ($3,500 ÷ $10,000 × 100).

What's a "Good" Food Cost Percentage?

There's no single right number. It depends on your type of restaurant:

• Quick-service: typically 28–32%
• Casual dining: typically 28–35%
• Fine dining: typically 30–40%, often higher due to premium ingredients and lower volume

Treat these as a starting benchmark, not a hard rule. A slightly higher food cost percentage paired with strong sales volume can still mean a healthy, profitable restaurant. The number only matters in context with your actual profit.

What Affects Your Food Cost Percentage

Several things push this number up or down:

• Portion sizes. Inconsistent portioning is one of the most common silent causes of a rising food cost percentage.
• Waste and spoilage. Product that gets thrown out still counts as cost, with no revenue to offset it.
• Menu pricing. A price that hasn't been adjusted since ingredient costs went up will quietly erode your margin.
• Vendor price changes. The same recipe costs more to make when your supplier raises prices.
• Theft or unrecorded loss. Product that leaves the building without ever being sold or logged.

Key Takeaways

• Food cost percentage shows how much of each sales dollar goes toward the ingredients behind it.
• Formula: (Cost of Goods Sold ÷ Revenue) × 100.
• "Good" varies by restaurant type. Use industry benchmarks as a starting point, not a verdict.
• Portioning, waste, pricing, vendor costs, and loss are the main levers that move this number.

Once you know your food cost percentage, the next useful step is tracking it by category. Bar, kitchen, and bakery costs behave differently and are worth watching separately.