What is a good food cost percentage?
The single number that decides whether your menu makes money — explained simply, with benchmarks for your type of restaurant and a clear plan to lower yours.
A healthy food cost percentage is 28% to 35% of revenue for most restaurants. Fine dining runs higher (35-40%); fast casual and pizza can run lower (25-30%). If you're above 35% and not fine dining, your margins are probably too thin — and it's fixable.
What food cost percentage actually means
Your food cost percentage is the share of every dollar in food sales that goes to buying the ingredients. If 30 cents of every dollar pays for food, your food cost is 30%. The other 70 cents covers labor, rent, utilities, and — if you've priced well — profit.
It's the most important number on your P&L because it's the one you control most directly. A few points in either direction is the difference between a profitable month and a painful one.
Benchmarks by restaurant type
There's no single "right" number — it depends on your concept. Here's where healthy restaurants typically land:
| Restaurant type | Typical range | Target |
|---|---|---|
| Pizza & pasta | 22-30% | ~28% |
| Fast casual | 25-30% | ~28% |
| Casual full-service | 28-35% | ~32% |
| Bars & taprooms (food) | 28-34% | ~30% |
| Fine dining | 35-40% | ~38% |
How to calculate it
You can run this for the whole restaurant over a month, or for a single dish. For one plate, divide its ingredient cost by its menu price: a dish that costs $4 to make and sells for $14 has a food cost of about 28.5% — right in the healthy zone.
Why yours might be too high
If your number is creeping up, it's almost always one of these:
How to lower it
Let ResBizAI track your food cost for you
ResBizAI costs every recipe automatically, updates your margins the moment ingredient prices change, and shows your food cost % every morning. No spreadsheets.
Start free →Frequently asked questions
For most restaurants, a healthy food cost percentage is between 28% and 35% of revenue. Fine dining often runs higher (35-40%) because of premium ingredients, while fast casual and pizza concepts can run lower (25-30%). The right number depends on your concept, but if you're above 35% and not fine dining, your margins are likely too thin.
Food cost percentage = (Cost of ingredients used / Food sales) x 100. For example, if you spent $9,000 on ingredients in a month and sold $30,000 in food, your food cost is 30%. For a single dish, divide the plate's ingredient cost by its menu price: a dish that costs $4 to make and sells for $14 has a 28.5% food cost.
The most common causes are over-portioning, waste and spoilage, theft, menu prices that haven't kept up with ingredient costs, and not tracking inventory tightly. Even a few percentage points of waste compounds fast. The fix is measuring food cost per dish, costing recipes precisely, and catching price changes the moment they happen.
Cost every recipe so you know the exact margin on each dish, re-price or re-engineer the dishes that are dragging you down, tighten portion control, reduce waste with better inventory tracking, and renegotiate or switch suppliers on your highest-spend items. ResBizAI automates the costing and tracking so the numbers stay current without manual spreadsheets.