Cafe food cost percentage, costed one dish at a time

Is your smashed avocado really at the food cost percentage on your costing sheet? That depends on two things the menu price hides: what gets trimmed off before food reaches the plate, and the GST sitting inside the price.

The food cost percentage formula

For one dish, divide the ingredient cost by the menu price and multiply by 100. For a whole week, Loaded Hub's version counts stock: opening stock, plus purchases, less closing stock, divided by food sales, multiplied by 100. A venue spending $30,000 on food to make $100,000 of food sales runs at 30%.

Loaded Hub puts cafes and quick service venues at 28 to 35%, higher than most other formats.

Cost one dish properly

Smashed avocado on sourdough, with feta and microgreens. The prices are examples:

• Sourdough: two slices from a 20 slice loaf at $9.50, so $0.95.
• Avocado: 120 g of flesh. A $2.20 avocado weighs 200 g, and after skin and stone you keep 65% of it, so the serve costs $2.03.
• Feta: 40 g from an $18 kilo, so $0.72.
• Microgreens: 5 g from a $30 kilo, so $0.15.
• Lemon, oil and seasoning: an allowance of $0.25.

That is $4.10 a serve.

The trim loss mistake

Cost the avocado by its whole weight instead, as if all 200 g were usable, and the serve comes to $3.39. The missing $0.71 a plate does not appear on the costing sheet. It appears in the stocktake.

Take the GST out of the price

If your $17.00 menu price includes GST, the sale you keep is $15.45. Against $15.45 the dish runs at 26.5%. Against $17.00 it looks like 24.1%, and every dish on the menu looks better than it is by the same proportion.

Price from the target

To set a price for a 30% food cost, divide the dish cost by 0.30 and add GST back. For this dish, $4.10 divided by 0.30 is $13.67 before GST, or about $15.04 with it. At $17.00 it is comfortably under 30%.

Do the same for every dish, then set the prices it gives beside what you charge. The dishes priced furthest below their target price are the ones to change first.

Portion size is part of the cost

The costing assumes 120 g of avocado. If the kitchen actually puts 150 g on the plate, the avocado costs $2.54, the serve costs $4.61, and the dish runs at 29.8% instead of 26.5%. Nobody changed a price.

Loaded Hub's ideal food cost assumes every recipe is followed exactly, with no over-portioning. Weigh a few plates during a busy service and compare them with the recipe card before trusting any costing.

When one ingredient doubles

If avocados go to $4.40, the same serve costs $6.13. At $17.00 the dish now runs at 39.7%, above the whole cafe range. Holding 30% would take a $22.48 menu price. The avocado is about half of this dish's cost, which is why its price matters more than any other ingredient's.

Loaded Hub lists recipe costs drifting out of date, and sell prices not moving when costs rise, among the reasons food cost runs over. Re-cost the dishes built around your most volatile ingredients each time their price changes, not once a year.

Checking the costing against the stocktake

Recipe costing gives your ideal food cost: what the week would cost if every dish were made exactly to recipe. The stocktake formula gives the actual. Loaded Hub says a well-run venue targets a gap of 1 to 3% between the two.

A wider gap points to the same control points every time: waste, invoices charged above the agreed price, portions drifting from the recipe, discounts nobody recorded, and menu prices that did not keep up. Trim loss that was never costed shows up here too, as a gap that never closes however careful the kitchen is.