The food cost is one of the biggest operating expenses (25% to 35%) for a restaurant
business. With perishable ingredients and fluctuating sales, controlling food costs in restaurants
can be extremely challenging.
Your food costs and your stock are huge spending plan details. At the point when you
misconstrue requesting or overspending on food costs, it straightforwardly influences your
primary concern. There are numerous systems for controlling food costs that you can apply to
your café business tasks.
How do restaurants control food costs? Here are Five Tips to control the food costs in
- Ensure transparency and accuracy in vendor contract price
Vendor-side changes or errors in ordering and invoicing can be difficult to catch and fix, but
they can affect your food cost percentage. By verify manually or running automated receiving
reports, you can keep an eye on vendor pricing. Your restaurant management solution can flag
items outside of a contracted price for a specified data range, ensuring that you’re being billed
at the quoted price.
- Closely Manage Your Inventory, Reduce Waste: purchase inventory at the right Level
One of the most direct ways to reduce food cost is to avoid purchasing what you don’t
need. With data-driven suggestive ordering, you and your managers are better able to purchase
inventory at the right level to reduce order waste.
Smart ordering and receiving allows you to leverage ordering suggestions, informed by
historical and forecasted sales and inventory data.
- Recipe Costing: track usage and yield on each food item
Lowering your food costs starts with understanding the cost of your food. Recipe
costing breaks down the cost details of menu items to portion size and individual ingredients,
calculated to the penny.
Tracking each menu items’ recipe cost can help you optimize food usage and reduce
food waste over time. With trends broken down by menu item or location, you can use recipe
costing to save money by reducing incorrect portions, improper staff training, or employee
- Menu Planning: Proper pricing of Menu.
Menu engineering helps you control food costs by helping you maximize the
profitability of your menu items. By collecting sales mix polling from your integrated POS and
combining it with recipe costing. you can instantly compare menu item popularity versus
By seeing what items are underpriced or overpriced, you can make food cost decisions
about revising recipes or ingredients. For instance, if you are selling a large quantity of a low
margin item, which increases your food cost percentage, you can make adjustments to either
raise the menu price or adjust portion sizes. Menu engineering also enables you to seize menu
opportunities, like promoting a menu item that is high margin but low sales. Understanding the
balance of menu item popularity and profits enables data-driven decisions that lower the cost
- Food Cost Calculations: Track variances between actual vs. theoretical food costs
Truly understanding your food cost goes beyond a “food cost percentage” calculation.
Tracking the difference between your theoretical and actual food costs allows you to make
impactful changes to your food cost and bottom line.
Theoretical food cost is what your food costs should be, given the current cost of all
ingredients, over a period of time. Actual food cost is the real amount that a restaurant spent
on ingredients over the same period of time. The difference between these two numbers
accounts for imperfect portion sizes, improper invoicing, kitchen waste, or employee theft.
Tracking the actual vs. theoretical food cost variance shows you critical information
about leaks in your profit margin. By knowing where to focus to reduce food waste, you are
able to see where you can save money on food costs. Tracking this variance daily can help you
spot anomalies and make adjustments before variances become issues that affect your bottom