What is food cost (and why yours is not a single number)

It is the question you hear at any hospitality fair or association meetup.

And everyone drops a number as if it were a single fixed figure: “I’m at 28”, “we’re around 32”.

They say it as if food cost were one thing. It is not.

No debate here. Food cost is calculated like this:

Example, our own estimate: a pasta dish that costs €3.20 in ingredients and sells for €12.50 including VAT, that is €11.36 excluding VAT (€12.50 ÷ 1.10). Food cost is €3.20 ÷ €11.36 × 100 = 28.2%.

Everyone agrees up to here. The problem starts with which “€3.20” you put into the formula.

Back to the pasta. The recipe sheet said €3.20 per portion. But that month’s real purchases, divided by the portions you actually plated, come out at €3.65.

Your actual food cost is 32.1%, not the 28.2% you thought. Inside that gap sit waste, over-portioning and a supplier price rise nobody put on the tech sheet.

That gap is the same logic as in theoretical vs actual cost.

The second mix-up is scale. The pasta’s 28.2% is that dish’s food cost. Your restaurant’s food cost is a different sum: the cost of what you used in the month (opening stock + purchases − closing stock) divided by sales excluding VAT.

You can run dishes at 20% alongside dishes at 45% on the same menu and still close the month with a healthy overall food cost, because sales volume weights each one differently. Looking only at the aggregate percentage hides which dish is eating your margin.

You will read everywhere that a healthy food cost sits between 25% and 35%. It is a useful reference, not a law.

That figure mostly circulates in Anglo sources and is not measured on the Spanish market. A seafood restaurant and a takeaway pizzeria do not run the same food cost, and there is no public study that fixes the right range for each business type in Spain. We cover that in more detail in what food cost fits your menu.