What Food Cost Should Be, and What to Do When It Is Too High
Thirty to thirty five percent gets quoted as the benchmark. Here is where it comes from, when it can be broken, and the right order of steps when yours goes past it.
Food cost is the share of the selling price consumed by ingredients. If a Rp30,000 dish uses Rp9,000 of ingredients, the food cost is 30 percent. The figure is widely used for one reason: it can be compared across dishes, branches, and months regardless of the size of the business.
Where 30 to 35 percent comes from
The range is not a law, it is leftover room. After ingredients, a business still has to cover rent, wages, electricity, packaging, and platform fees. In a typical food and beverage cost structure, ingredients above 35 percent leave too little room for the rest.
That is why the number differs by business type. Coffee shops, with cheap ingredients and high prices, often sit at 20 to 25 percent. A restaurant serving meat dishes can reasonably run at 35 percent. A drinks booth on thin prices has to be much lower.
When the number runs too high
Raising prices is the most visible move, but not the first. A sensible order starts with what the customer notices least.
- Check the measures first. A high food cost is often not about ingredient prices but portions that vary between staff.
- Compare expected stock against actual stock with a count. A large gap points to waste or leakage, not price.
- Look at purchase price history. Sometimes one ingredient creeps up and drags every dish that uses it.
- Review dishes that sell well but earn little. They consume ingredients and labour without returning much.
- Only then adjust prices, and do it on the dishes least sensitive to an increase.
Recalculate monthly, not yearly
Food cost is not a figure you set once and pin to the wall. It moves every time an ingredient price changes, every time a portion slips, and every time a promotion runs. Businesses that review it monthly almost always find one or two dishes that quietly stopped earning.
In Kelola, food cost comes from the recipe and the latest purchase prices, and menu engineering maps every dish into four sell and margin quadrants. Dishes that are busy but thin appear as their own group rather than disappearing among the rest.