Food cost and preparation waste: what does an ingredient really cost?
A 200 g portion does not always require just 200 g of purchased product. See how to account for preparation waste and recipe errors when calculating portion cost.
Purchase price is only the starting point
You buy a kilogram of an ingredient, but not all of it goes into dishes. Trimming removes parts you do not use. If you omit that waste, your calculated portion cost is lower than the actual cost.
A dish’s food cost percentage is its ingredient cost as a share of its selling price. Use consistent figures; this example excludes VAT. First, however, calculate each ingredient’s cost correctly.
Example: one kilogram yields 800 g
Suppose a kilogram of product before trimming costs PLN 40 excluding VAT. Waste is 20% of purchased weight, leaving 80% usable. One portion needs 200 g after trimming, before further processing.
This is an illustrative example with fictional data, not a client audit result. It excludes additional cooking or roasting losses.
200 g ÷ 0.80 = 250 g of raw product
0.250 kg × PLN 40/kg = PLN 10 excluding VAT per portion
Why not simply add 20%?
The 20% waste is measured against weight before trimming. You must therefore divide 200 g of usable product by 80%, not increase it by 20%. Buying 240 g at this waste rate would yield only 192 g of usable product.
If you ignore waste, you calculate 0.200 kg × PLN 40 = PLN 8. With an 80% yield, however, the cost of that usable portion is PLN 10. Actual cost depends on measured yield, purchase price and portion size.
A second error: an incorrect system recipe
Suppose the system also records 180 g instead of 200 g, again excluding waste. It then shows a cost of PLN 7.20. A 200 g portion at an 80% yield costs PLN 10, a difference of PLN 2.80 per portion.
Across 100 portions sold, the recorded cost of that ingredient is understated by PLN 280. Correcting the recipe does not automatically save that amount. It reveals a cost that was previously missing.
What should you check in your restaurant?
Start with one frequently sold dish and its main ingredient.
- Weigh the product before and after trimming across several representative batches. Record the waste percentage rather than relying on memory.
- Establish whether the recipe weight means purchased, trimmed or ready-to-serve product.
- Compare the actual portion with the system quantity and unit, such as grams or kilograms.
- Check whether the system accounts for waste through a larger raw quantity or a yield setting. Do not count the same waste twice.
- Recalculate all ingredients before reviewing the selling price. Also consider labour and operating costs.
When does the issue extend beyond the recipe?
If recipes are correct but actual consumption still exceeds consumption implied by sales, also review portioning, non-sales usage records and stocktake quality. A discrepancy alone does not establish its cause.
Reliable costing provides a basis for decisions. It does not automatically require a price increase or guarantee a particular food cost percentage for every restaurant.