Guide contents
Food cost answers two different questions: what a recipe should consume, and what ingredients actually cost over a period. Treating those numbers as the same hides the variance a restaurant needs to investigate.
Keep these three rules
- Dish food cost = ingredient cost per portion ÷ comparable selling price × 100.
- Actual consumption = opening inventory + purchases − closing inventory, adjusted for transfers and returns.
- There is no universal ideal percentage. Rent, labour, concept and sales mix determine what your restaurant can sustain.
01 · DefinitionFood cost measures the share of a selling price absorbed by ingredients.
For one dish, ingredient cost adds every quantity in the recipe: protein, vegetables, oil, spices, garnish and packaging when the sale consumes it. Divide that total by a selling price expressed on the same tax and accounting basis.
This is not net margin and it is not profit. The rest of the price must still cover labour, rent, utilities, commissions, maintenance, unrecorded waste and other operating costs. A low-food-cost dish can remain unattractive if it takes excessive labour or holds a table for too long.
02 · Recipe cardCalculate each ingredient, then reduce the total to one portion.
The base formula is food cost (%) = ingredient cost per portion ÷ comparable selling price × 100. Use the same basis on both sides. For official accounts and tax treatment, confirm the basis with your accountant.
This worked chicken and preserved-lemon tagine serves four. The prices are not Moroccan market averages. Replace them with your latest invoices and replace every quantity with the technical recipe your kitchen follows.
| Ingredient | Calculation | Cost |
|---|---|---|
| Chicken | 1.20 kg × 42.00 MAD/kg | 50.40 MAD |
| Potatoes | 0.80 kg × 8.00 MAD/kg | 6.40 MAD |
| Onions | 0.40 kg × 7.00 MAD/kg | 2.80 MAD |
| Lemon and olives | Recipe quantities | 14.00 MAD |
| Oil and spices | Measured quantities, not a flat allowance | 8.40 MAD |
| Total | 82.00 MAD ÷ 4 portions | 20.50 MAD |
At a selling price of 75.00 MAD, the example food cost is 20.50 ÷ 75.00 × 100 = 27.3%. Ingredient contribution is 54.50 MAD per portion before every other cost.
The “right” food cost is not a number copied from the internet. It is the level that lets your concept pay every other cost and reach its required margin.Costing principle · Kiwi Guides
03 · Units and yieldCorrect conversions before trusting the result.
A supplier may invoice a case, inventory may count kilograms and the recipe may use grams. Choose one base unit per ingredient and record the purchase conversion. A 5-litre container becomes 5,000 millilitres. A case of 24 cans becomes 24 units.
Yield matters when the purchased quantity is not fully usable. If 1 kg of fish produces 800 g after trimming, usable kilogram cost is higher than purchase kilogram cost. Do not add the same trim loss again inside the recipe or you will count it twice.
| Case | Formula | Check |
|---|---|---|
| Cost per gram | Cost per kg ÷ 1,000 | 42 MAD/kg = 0.042 MAD/g |
| Usable cost | Purchase cost ÷ decimal yield | 42 ÷ 0.80 = 52.50 MAD/kg |
| Portion cost | Unit cost × recipe quantity | 0.042 × 300 g = 12.60 MAD |
| Target price | Portion cost ÷ decimal target | 20.50 ÷ 0.28 = 73.21 MAD |
Test one portion.
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Without JavaScript: food cost = cost ÷ price × 100 · contribution = price − cost · target price = cost ÷ target rate.
04 · The periodMeasure actual food cost between two inventory counts.
Recipe cards do not see everything. For one week or month, value opening inventory, add received purchases and subtract closing inventory: actual consumption = opening inventory + purchases − closing inventory.
Adjust transfers between locations and supplier returns separately. Then divide actual consumption by comparable food sales for exactly the same dates and basis.
| Element | Amount | Treatment |
|---|---|---|
| Opening inventory | 18,400 MAD | Add |
| Purchases received | 12,700 MAD | Add |
| Closing inventory | 19,980 MAD | Subtract |
| Actual consumption | 11,120 MAD | Result |
With comparable food sales of 40,000 MAD, actual food cost is 27.8%. These are worked Kiwi figures, not a restaurant benchmark.
05 · ControlCompare actual with theoretical, then investigate in quantity.
Suppose recipes attached to sales predict 10,250 MAD of ingredients, while inventory measures 11,120 MAD. The variance is 870 MAD, or 8.5% above theoretical. That is a signal, not a diagnosis.
Return to the ingredients that contribute most. A 1.5 kg chicken variance is more actionable than one global percentage. Check purchase unit, recipe, receiving, waste entries, portion sizes and voids before turning an accounting difference into an accusation.
06 · ActionsCorrect the cause before raising the price.
- Update supplier price and pack conversion after every lasting change.
- Weigh three portions prepared by different people before editing the recipe.
- Record waste by reason when it happens.
- Recount high-value ingredients when a variance appears.
- Consider sales mix: a popular dish matters more than a rarely ordered one.
- Reduce garnish, renegotiate, reformulate or reposition before changing price.
Recalculate after every action. A price increase can reduce demand and a smaller portion can damage the promise to the guest. The best decision protects both contribution and experience.
Before opening, use this recipe cost to build the menu, then place it inside the complete restaurant budget and service rehearsal. A sound portion cost cannot rescue unverified premises, cash needs or operating flow.
07 · Common questionsThe assumptions that most often distort the calculation.
What is the restaurant food cost formula?
For one dish: ingredient cost per portion ÷ comparable selling price × 100. For a period: actual ingredient consumption ÷ comparable food sales × 100.
What is a good food cost percentage?
There is no universal target. Concept, labour, rent, service level and sales mix determine the percentage your business can sustain.
Should packaging and cooking oil be included?
Yes when the sale consumes them. Measure oil across a period or allocate it consistently, then avoid counting the same cost again as waste.
How often should a recipe cost be updated?
Update it when supplier price, yield, portion or recipe changes. Volatile ingredients need a more frequent review.
Why is actual food cost above theoretical?
Possible causes include a conversion error, missing purchase or waste, oversized portions, changed yield, incorrect void treatment or a count error. Investigate by ingredient first.
Official sourcesA management indicator, not a statutory margin.
The food-cost measures in this guide are operating indicators, not a margin imposed by law. For taxpayers within scope, article 145-II of the 2026 General Tax Code requires a detailed year-end inventory in quantities and values. Articles 9 and 12 of Law 28-07 require, among other things, a self-control programme or approved good-practice guide, retention of the related records for at least five years and traceability of suppliers and recipients. These texts prescribe no universal food-cost percentage.
- Moroccan Tax Administration · 2026 General Tax Code, article 145-II.
- ONSSA · Law 28-07 on food safety, articles 9 and 12.
Verification: official sources checked on August 24, 2026. Tax, food-safety and local rules can change; confirm how they apply to your activity with your accountant and the competent authorities before acting.