Glossary

Food Cost %

The percentage of revenue spent on raw ingredients.

Definition

Food cost percentage is the share of every rupee of revenue that is spent on the raw ingredients that go into the dish. It's calculated as (cost of ingredients sold / total revenue) × 100. A healthy Indian restaurant runs food cost in the 28–35% band; anything north of 38% silently destroys margin.
Example

Worked example

If your restaurant did ₹8,00,000 of revenue last month and your ingredient spend (sabzi, dairy, meat, dry goods) was ₹2,72,000, your food cost % was 34%.

Tags

financep&l
Related terms
Prime Cost
Food cost + labour cost combined as a percentage of revenue.
Plate Cost
The cost of ingredients in a single plate of a dish.
Menu Engineering
The discipline of analyzing dishes by popularity × margin to optimize the menu.
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Food Cost % — Indian HORECA glossary | Forkcast