What food cost should a restaurant in Spain have?
Many operators chase a single number. The useful answer is not a magic percentage: it is understanding what product cost your model can support and still be profitable.
By
Javier Porras9 min read
Should my food cost be 25%, 30%, or can I go up to 35%?
The answer is less comfortable, and much more useful: it depends on your business model.
A café, a burger joint, a seafood restaurant and a fine-dining kitchen do not share the same cost structure. Product type, prep complexity, average ticket, drinks mix and labour needs can change the outcome completely.
That is why there is no perfect percentage that works for every restaurant.
As a general reference, many hospitality businesses run a product cost between 25% and 35% of net sales. Use that range as orientation, not as a universal rule.
The important question is not only what food cost you have. The right question is:
What product cost can your business model support and still stay profitable?
What is food cost?
Food cost shows what percentage of sales goes to the cost of products sold. It usually includes:
- Food
- Drinks
- Ingredients
- Packaging
- Other sellable consumables
The formula is:
Both sales and costs should be calculated excluding VAT. If you do not yet have cost per dish, start with the step-by-step recipe costing and the food cost and gross margin calculation.
Example
A restaurant records in one month:
Net sales
€50,000
Product cost
€15,000
Food cost
30%
That means for every €100 sold, €30 goes to product.
The remaining €70 is not profit. It still has to cover wages, rent, utilities, admin, maintenance, fees and the rest of the restaurant’s costs.
What percentage should a restaurant have?
As a starting point, these references are commonly used:
25% – 30%
Controlled product
Concepts with strong turnover and relatively simple processes.
30% – 35%
Higher complexity
More expensive ingredients, complex prep or a higher gastronomic level.
Above 35%
Worth reviewing
Prices, purchasing, recipe costings, waste and portion control.
Exceeding 35% does not automatically mean the restaurant is poorly managed.
A seafood restaurant can run a higher product cost than a café and still be profitable thanks to a high average ticket, strong turnover and efficient production.
Likewise, a business at 25% food cost can lose money if it needs too much labour, pays high rent or does not generate enough sales.
The percentage depends on the business model
Food cost can vary considerably for several reasons.
Product type
Working with pasta, rice, pastry or coffee is not the same as working with wild fish, shellfish, aged meat or premium products. Ingredient type directly shapes the cost percentage, but it does not alone determine whether the business is profitable.
Drinks mix
Drinks usually have different cost percentages from kitchen food. A restaurant with strong wine, soft drink, beer or coffee sales can lower its overall food cost even if some dishes run a higher cost percentage.
That is why it is worth analysing separately:
- Food cost
- Beverage cost
- Total product cost
Yield and waste
Purchase price does not always equal the real cost of usable product. Imagine you buy fish at €12/kg, but after cleaning you only use 60%.
So the real cost is not €12/kg, but €20/kg of usable product. If you ignore yield and waste, the recipe costing will look more profitable than it really is.
Level of prep
A cheap ingredient may need many kitchen hours, specialised staff and complex prep. A more expensive product may be served with almost no handling. Food cost measures product cost, but it does not by itself reflect time, difficulty or the labour needed to make a dish.
What matters is balance with prime cost
Food cost should not be analysed in isolation. It should also be compared with labour cost. The sum of both is known as prime cost:
Imagine two restaurants with €100,000 in net sales.
Restaurant A
Lower food cost
Product: €26,000 · Labour: €38,000 · Prime cost: €64,000
Restaurant B
More margin after product + labour
Product: €33,000 · Labour: €24,000 · Prime cost: €57,000
Restaurant A has a lower food cost. Restaurant B keeps more margin after covering product and labour.
That is why cutting product cost does not always improve profitability. You may use cheaper ingredients but need more kitchen hours, more prep or a larger team. The real goal is the right balance between product, labour, quality, sales and margin.
Watch out: purchases can distort food cost
One of the most common mistakes is calculating food cost using only that month’s purchases. That method can work as an approximation, but it can also distort the result.
Imagine a large purchase of longer-shelf-life products:
- Frozen goods
- Wines
- Spirits
- Soft drinks
- Preserves
- Dry goods
The invoice hits that month, but much of the product is still in storage and has not been used. If you divide all purchases by sales, food cost will look higher even though you only increased stock.
Example
Net sales: €40,000. Purchases: €16,000. If you calculate using purchases alone:
At first glance that looks worrying. But suppose you also know: opening inventory €8,000, purchases €16,000 and closing inventory €12,000.
€8,000 + €16,000 − €12,000 = €12,000
The restaurant did not have a 40% food cost, it had 30%. The difference was product bought that was still in storage. That is the same logic as in theoretical vs actual cost.
To calculate it properly, value the inventory
Taking inventory is not just noting that you have 12 bottles of whisky, 20 bottles of wine or 15 kg of frozen meat. You also need their economic value.
Inventory should reflect both quantities and purchase value excluding VAT. Only then can you know how much money is stored and how much product you actually consumed.
Exact control means recording every outbound
Calculating food cost with full precision requires advanced management, and honestly, it can be tedious. For truly accurate stock, you would record every product outbound that does not become a sale:
- Waste
- Expired goods
- Kitchen errors
- Comps
- Staff meals
- Staff drinks
- Breakages
- Owner consumption
- Possible theft
- Inventory variances
Even that Coca-Cola someone drinks in the restaurant left stock without appearing on the POS. One unit will not change the result. The problem appears when dozens of small unrecorded consumptions pile up.
Not every restaurant needs to start with such exhaustive control. But the tighter the margins, or the bigger the gap between theoretical and actual cost, the more important it becomes to professionalise inventory.
Not every dish should have the same food cost
Trying to force every dish to 30% is another common mistake. A dish can run a higher percentage and still be interesting if it:
- Leaves a solid margin in euros
- Sells frequently
- Raises the average ticket
- Strengthens positioning
- Helps sell drinks
- Is easy to produce
Dish A
Food cost 20%
Price excl. VAT: €10 · Cost: €2 · Gross margin: €8
Dish B
Food cost 32%
Price excl. VAT: €25 · Cost: €8 · Gross margin: €17
Dish A has a lower cost percentage. Dish B leaves €9 more margin per sale. Percentage matters, but you should also analyse margin in euros, popularity, prep difficulty, production time and waste. That fits with designing a more profitable menu.
What to review if your food cost is too high
Before changing ingredients or cutting portions, review the following points.
Recipe costings
Check that every recipe costing includes all ingredients, garnishes, oils, sauces and presentation elements.
Purchase prices
Update recipe costings whenever a supplier changes prices. A dish can stop being profitable even if the selling price has not changed.
Portions
Verify that the kitchen respects the set gram weights. A small deviation repeated every service can cut margin significantly.
Waste
Record what product is discarded, in what quantity, what it costs and why the loss happens. What you do not measure, you cannot correct.
Inventories
Run periodic inventories to separate what you buy from what you actually consume. That helps you spot variances, losses and unexpected usage.
Menu
Analyse which dishes sell most, how much margin each contributes and what operational complexity they create. A popular dish is not always profitable.
Selling prices
Periodically review whether prices still match current costs and the guest’s perception of value.
Conclusion
As a reference, a restaurant can work with food cost between 25% and 35%. The right figure depends on concept, product type, average ticket, service level and labour cost.
A restaurant at 28% food cost can lose money. Another at 34% can be profitable.
The key is not chasing the lowest percentage, but understanding where it comes from, what margin it generates and how it fits inside prime cost and the P&L.
Controlling food cost does not mean always buying cheaper. It means knowing how much product you buy, how much you consume, how much you waste and how much profit each sale actually leaves.
Tipi helps you control purchases, suppliers, prices and recipe costings so you can spot when a cost rise or a variance starts eating your margin.
Because the problem is not having a food cost of 30%, 32% or 35%.
The problem is not knowing where it comes from.
Want to start controlling what each dish really costs?
You have two options now.
Option 1
Start free with our recipe-costing spreadsheet
We prepared a simple template so you can start calculating dish cost, review margins, and stop pricing by eye.
You can open the spreadsheet in view-only mode to see how it works.
If you want a fully free editable copy, get in touch and we will send it so you can use it in your business.
Option 2
Do it more easily with Tipi
If you do not want to rely on spreadsheets or update every price by hand, you can do it directly in Tipi.
Centralise recipes, recipe costings, purchases, delivery notes and supplier prices to know what each dish costs and spot increases that are eating your margin.
You can keep calculating by eye and hope the numbers add up.
Or you can start today knowing how much you really earn every time a dish leaves the kitchen.