"What should my food cost percentage be?" It's one of the most common questions in the restaurant industry—and there's no single answer. Your ideal food cost depends on your restaurant type, concept, and business model. Here's what to aim for.
Understanding the Range
Food cost percentage typically falls between 25% and 40% for restaurants. But that range is huge. A difference of 10 percentage points on $500,000 in annual sales is $50,000—real money that determines whether you're profitable or struggling.
The right target depends on: - Your restaurant category - Price point and positioning - Labor model (full service vs. counter) - Rent and location costs - Beverage program
Not sure how to calculate your food cost percentage? Start with our guide on how to calculate food cost percentage.
Benchmarks by Restaurant Type
Fast Casual (28-32%)
Examples: Chipotle-style concepts, fast-fresh bowls, build-your-own formats
Why this range works: - Lower labor costs (counter service, no tipping) - Higher volume offsets thinner margins per item - Streamlined menus reduce waste - Speed requires standardized, predictable costs
Typical breakdown: - Food: 28-32% - Labor: 25-30% - Occupancy: 8-12% - Other: 15-20% - Profit: 8-15%
Quick Service / Food Trucks (25-30%)
Examples: Food trucks, walk-up windows, grab-and-go
Why this range works: - Minimal service labor - Small menus with high cross-utilization - Lower rent than traditional restaurants - Higher food cost acceptable because other costs are lower
Watch out for: Variable demand making waste management critical
For food truck-specific guidance, see our complete food truck cost management guide.
Casual Dining (30-35%)
Examples: Neighborhood restaurants, mid-range family dining
Why this range works: - Full service labor increases costs elsewhere - Menu variety is expected, adding complexity - Customers expect reasonable prices - Competition limits pricing power
Typical breakdown: - Food: 30-35% - Labor: 30-35% - Occupancy: 6-10% - Other: 12-18% - Profit: 5-10%
Fast Fine / Polished Casual (28-33%)
Examples: Upscale concepts with counter service, chef-driven fast casual
Why this range works: - Premium ingredients justify higher prices - Counter service keeps labor lower - Smaller menus allow ingredient focus - Customers accept higher prices for quality
Fine Dining (32-38%)
Examples: White tablecloth, tasting menus, destination restaurants
Why this range works: - Premium ingredients cost more - Higher menu prices absorb the cost - Presentation and waste factor in - Amuse-bouche, bread service, and extras add cost
The exception: Some fine dining achieves 28-30% through tasting menu control and extremely high prices.
Pizzerias (28-32%)
Why this range works: - Flour, tomatoes, and oil are inexpensive bases - High-margin items (plain pizza) balance specialty items - Volume production is efficient - Toppings are easily portioned
Watch the toppings: A veggie supreme with eight toppings costs significantly more than margherita. Price accordingly.
Bakeries and Cafes (25-35%)
Wide range because: - Pastries and bread have low ingredient costs (flour, sugar, oil) - Prepared foods push costs higher - Beverage margins vary dramatically - Model varies from pure bakery to full cafe
Coffee note: Beverage margins (often 15-20% cost) can offset higher food costs.
Catering (30-35%)
Why this range works: - Volume purchasing lowers ingredient costs - Controlled portions reduce waste - Setup and service labor are billed separately - No rent or utilities during service
Watch for: Hidden costs like transport, disposables, and last-minute client changes.
Why Your Number Might Differ
These benchmarks are starting points, not rules. Your ideal food cost depends on your specific situation.
You Can Run Higher Food Costs If:
- **Rent is low**: Home-based catering, low-rent location, food truck
- **Labor is minimal**: Counter service, minimal staffing
- **Concept is premium**: Customers pay more for quality ingredients
- **Volume is high**: More sales absorb fixed costs
You Need Lower Food Costs If:
- **Rent is high**: Prime urban locations eat into margins
- **Labor is significant**: Full service, experienced kitchen staff
- **Prices are capped**: Competition limits what you can charge
- **Volume is low**: Fewer sales to cover fixed costs
How to Find Your Target
Step 1: Know Your Other Costs
Add up everything that's not food: - Labor (including yours) - Rent and utilities - Insurance and permits - Equipment and supplies - Marketing - Everything else
Step 2: Determine Required Profit
What do you need to take home? Be realistic. Many restaurants target 5-10% profit margin.
Step 3: Calculate Available Food Budget
Food Cost % = 100% - Labor % - Overhead % - Profit %
Example: - Labor: 30% - Overhead: 25% - Profit target: 8% - Available for food: 37%
That's your ceiling. Price your menu to hit it. For help with pricing strategy, read our menu pricing guide.
When You're Off Target
Food Costs Too High
Common causes: - Portions are too large - Waste isn't tracked - Prices haven't kept up with ingredient costs - Menu has too many low-margin items - Theft or poor inventory control
Solutions: - Audit portions and standardize - Track and reduce waste - Raise prices strategically - Rebalance menu toward higher-margin items - Implement inventory controls
For detailed tactics, see our guide on reducing food costs without sacrificing quality.
Food Costs Too Low
Surprisingly, this can be a problem too: - Quality might be suffering - Portions might be too small - You're leaving money on the table
If you're at 22% food cost and could raise quality or portions while staying under 30%, you'd likely increase customer satisfaction and maybe even volume.
The Real Goal: Sustainable Profit
Food cost percentage is one metric, not the only metric. A restaurant with 35% food cost and 25% labor might be more profitable than one with 28% food cost and 35% labor.
The question isn't "what's the industry average?" It's "what food cost percentage, combined with my other costs, lets me run a sustainable, profitable business?"
Calculate Your Actual Food Cost
Before optimizing, know where you stand. Our free food cost calculator helps you analyze your recipes and find your true food cost percentage.
Wondering whether to use our calculator or spreadsheets? Compare the approaches in our food cost calculator vs Excel guide.
Try it free—no spreadsheets required.
Related Articles
How to Calculate Food Cost Percentage: A Complete Guide
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10 Ways to Reduce Food Costs Without Sacrificing Quality
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Menu Pricing Strategies: How to Price Your Restaurant Menu for Profit
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