Food cost percentage is the single most important number for a restaurant or karenderia. Here's how to calculate it and what to do with it.
Of all the numbers in an F&B business, food cost percentage is the one that determines whether you're profitable — and most Philippine café and restaurant owners don't calculate it consistently. Here's the formula, what it means, and what to do with it.
Food Cost % = (Ingredient Cost ÷ Menu Item Selling Price) × 100
Example: Your Pork Sinigang sells for ₱220. The ingredients — pork belly, tamarind, vegetables, seasoning — cost ₱68 per serving. Food cost = (68 ÷ 220) × 100 = 30.9%. That's within the healthy range for Philippine F&B.
The generally accepted food cost range for Philippine restaurants and cafés is 28–35%. Below 28% means you're pricing well or sourcing cheaply — great, but double-check portion sizes are being followed. Above 35% is a margin problem: you're spending too much on ingredients relative to what you're charging, or portions are inconsistent.
Portion control
Standardize recipe portions with a gram scale. A 10g overpour of protein per serving × 50 servings/day × ₱0.80/gram = ₱400/day in avoidable cost.
Supplier negotiation
If your pork supplier raised prices, find the updated landed cost per kilo and recalculate. You may need to adjust your selling price or find an alternative supplier.
Menu engineering
Items with high food cost and low volume are candidates for removal. Items with low food cost and high volume are your anchors — feature them more prominently.
Nexus7's NexusStock includes a recipe costing module that calculates food cost percentage automatically for every menu item based on current ingredient costs. When your supplier price changes, your food cost numbers update immediately — no manual spreadsheet required.
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