Foodcost  

Definition 

"Foodcost" is a term from the hospitality industry and refers to the costs associated with the production of food. Foodcost are used to analyze the financial performance and profitability of e.g. restaurants or hotels.

Foodcost calculation

Foodcost is an essential part of budgeting and cost management in the food sector. Foodcost is usually expressed as a percentage of sales. Foodcost is the direct cost of food required for the preparation of meals, such as the cost of:

• Ingredients
• Spices
• Packages
• Delivery costs

Foodcost is calculated by looking at the total value of food sold during a given period and breaking down the direct costs incurred to prepare that food. This value is then set in relation to sales to determine the Foodcost.

High food costs are mostly caused by inefficient processes, excessive purchase prices or in connection with food waste. Therefore, food costs can be reduced thanks to efficient food procurement, control of food waste, and effective warehouse management.

Food costs, often referred to as food costs, are therefore an important indicator in the catering industry, measuring the cost of ingredients in relation to revenue. They provide information on how much of a dish's revenue is spent on food. Efficient control of food costs is crucial for the profitability of a food service business. The following formula is generally used to calculate food costs:

Food cost = (cost of ingredients / selling price) × 100

Tools and methods for calculating the food cost

Various tools and methods can be used to accurately calculate food costs and monitor the profitability of a food service business:

1. Food cost calculator: A food cost calculator is a helpful tool for calculating food costs quickly and accurately. It takes into account all ingredient costs and enables an accurate calculation of sales prices.
2. Food Cost in Excel: Templates in Excel are widely used to calculate and track food costs. These templates provide a structured way to enter all relevant data and monitor cost development. With the Food Cost Formula in Excel, the food cost formula can be applied and the costs for different dishes can be detailed. This makes it easy to adjust and analyze prices.

The calculation of food costs is a continuous process. By regularly reviewing and adjusting prices and cost structures, it is possible to ensure that the catering business remains profitable.

How much surcharge on the purchase price in gastronomy?

In the food service industry, a certain percentage is often added to the purchase price of ingredients to determine the final selling price. This mark-up not only covers the cost of the food, but also other operating costs such as staff, rent and ancillary costs as well as a profit share. A common mark-up in the food service industry is usually around 200% to 300%. This means that the selling price of the dish can be two to three times the cost of purchasing the ingredients.

What percentage surcharge in gastronomy?

The percentage mark-up in the catering industry varies depending on the type of business, the competition and the target group. A typical value is between 60% and 70%. This percentage is also known as the target food cost percentage and helps restaurateurs to calculate their prices in such a way that all costs are covered and profits can be made.

Importance of Foodcost for the catering industry

Foodcosts have a direct impact on the profitability of food service operations. Foodcost must therefore be effectively controlled to remain competitive and ensure business success. Optimizing foodcosts can reduce costs and maximize profits while ensuring the quality of dishes.  

Artificial Intelligence and Foodcost 

Foodcosts such as costs from over-ordering, misproduction, wrong portioning or out-of-stock can be reduced with artificial intelligence. By using AI, large amounts of data are analyzed and used to determine forecasts for production planning. This optimizes food preparation and reduces food costs.