The cost price of a dish is the foundation under every menu. Whoever does not know it steers by feel: a dish that sells well can be loss-making, and a margin that looks right on paper evaporates as soon as the wholesaler raises the price of butter. In this article we explain how to calculate the cost price per plate, what the pitfalls are and why keeping it up to date matters more than calculating it once.
What is the cost price of a dish
The cost price (also called food cost) is the total of all ingredients needed for one portion of a dish, at the current purchase price, corrected for yield loss during cleaning and preparation. Labour, energy and rent are not part of the dish’s cost price; you cover those with the gross margin across the whole menu.
Step 1: record the recipe per portion
Start with a recipe that lists every ingredient with quantity and unit, reduced to one portion. A risotto for four is divided by four; a sauce you make in five-litre batches is converted back to millilitres per plate. Without a fixed recipe every calculation is a snapshot of what the cook happened to do that day.
Step 2: link every ingredient to a product and a price
Every ingredient is tied to a product from your wholesaler, with the purchase price per purchase unit and the conversion to the recipe unit. A 5-kilo crate of tomatoes for 12.50 euros is 2.50 euros per kilo and 0.25 euros per 100 grams. This is where many kitchens go wrong: prices are typed into a spreadsheet once and never updated again.
Step 3: calculate with yield
Of a kilo of unpeeled carrots about 800 grams remain after cleaning; of a whole salmon some 55 to 60 percent fillet. The yield percentage per product determines the real cost price of what you serve. If you calculate with the purchase price without yield, you structurally underestimate the cost price of fresh products by 10 to 40 percent.
Step 4: add up and determine the margin
The sum of all ingredients per portion is the cost price of the dish. Compare it with the selling price excluding VAT. A cost price of 6.20 euros at a selling price of 19.50 euros ex VAT gives a food cost of 32 percent and a gross margin of 68 percent. Many kitchens aim for a food cost of 28 to 35 percent, but the right percentage depends on your concept and your other costs.
The three mistakes we see most often
First: outdated prices. A wholesaler changes prices weekly; a spreadsheet does not. Second: semi-finished products that have not been costed. A stock, a dressing or a dough has its own cost price that returns in every dish. Third: no link with what is actually sold, so nobody sees that the most popular dish contributes the least.
From calculation to steering
A cost price you calculate once a year says little. Make sure the recipe is linked to the current product prices of your wholesaler, so that a price increase is immediately visible in the margin of every dish that contains the product. Combine that with POS data and you see per dish what it contributes to the result. That is the basis of menu engineering, and exactly what a kitchen management platform such as iResto does automatically: cost price, recommended selling price and margin are always traceable to current prices, and a wholesaler price change shows in your dish margin within 24 hours.