How to lower food cost without lowering quality

When food cost goes up, the easy fixes are raising prices or buying cheaper ingredients. But the money is usually leaking somewhere else: portions that creep up, food that gets thrown out, invoices nobody checks and dishes that sell a lot but leave little. Here's where to look and what to do, without touching what makes your food good.

First: measure the gap between actual and theoretical food cost

• Theoretical food cost: what you should have spent according to your recipes and what you sold. If every dish is costed (here's how to calculate recipe cost), it's each dish's cost times how many you sold.
• Actual food cost: what you really spent: beginning inventory + purchases − ending inventory, divided by sales.

The difference between the two is money that leaked out. If your recipes say 28% and actual comes out at 33%, on a $60,000 month that's $3,000 lost. That gap is the first thing to close, and it's almost always in the five areas below.

1. Portions: the cost nobody sees

A portion that grows "just a little" gets multiplied by every plate that goes out. If your meat portion is 5 oz and the line serves 6, you're giving away 20% more. With meat at $0.30 an ounce and 1,500 plates a month, that extra ounce costs $450 a month.

• Weigh standard portions and keep scales on the line.
• Use measured tools: ladles, spoons and scoops sized to the portion.
• Keep a photo and spec card for every dish with quantities, so everyone builds it the same way.
• Spot-check: weigh a few plated dishes now and then, unannounced.

This doesn't lower quality: customers get what your menu says, the same way every time.

2. Trim loss and waste

Everything that spoils, burns or is left over at the end of the day was paid for and never sold.

• First in, first out. Label everything with the received date and expiration date, and put new stock in the back.
• Prep to what you sell, not "just in case". Use your sales by day of the week to decide how much to prep.
• Use your trim: vegetable trim for stocks and sauces, day-old bread for other dishes, ripe fruit for aguas frescas.
• Log what gets thrown out and why. In two weeks you'll see what you lose most and the reason.
• Store it right: correct temperatures and sealed containers make ingredients last longer.

In Kitchfly, the "Expiring" section shows you every morning what expires soon so you use it first, and anything thrown out is logged as a loss with its cost.

3. Suppliers and purchasing

• Compare prices on your 10 most expensive ingredients with 2 or 3 suppliers, at least once a month. Those few items are usually most of your spend.
• Check every delivery: weight, count and price should match the invoice and what you ordered. Mistakes are rarely in your favor.
• Buy by spec, not just by name: the cut, size and grade. That way you compare like with like.
• Buy in season: seasonal produce is usually better and cheaper.
• Don't overbuy for a deal if it will spoil before you use it.

Watch out for "cheaper": compare the price of what you actually use, not what you buy.

Supplier B looks more expensive on the invoice, but every pound that reaches the plate costs you 67 cents less.

4. Inventory control

• Count your most expensive items weekly (meat, seafood, cheese, alcohol). You don't need to count everything every week.
• Record comps, returned dishes and kitchen mistakes. If they aren't logged, they show up as unexplained shortages.
• Limit who receives deliveries and who has access to storage.

5. Menu engineering

Not every dish carries the same weight. Menu engineering sorts dishes by how much they sell and how many dollars they leave (price minus cost), and tells you what to do with each. A simple way to start is to compare each dish against your menu's average.

The average margin is weighted: total margin from every dish sold divided by total dishes sold.

• Stars (sell a lot, leave a lot): leave them alone. Protect their quality and keep them visible on the menu.
• Plowhorses (sell a lot, leave little): raise the price a bit, review the portion or recipe cost, or pair them with something that leaves more, like a drink.
• Puzzles (leave a lot, sell little): promote them. Move them to a more visible spot on the menu, improve the description and have servers recommend them.
• Dogs (sell little, leave little): drop them or rework them. Besides not paying off, they force you to stock ingredients that can spoil.

The classic version of this method uses 70% of the average as the popularity cutoff instead of the full average; to get started, the average works fine.

6. Review your prices

If you've closed the leaks and a dish is still high, then it's time to look at the price. We explain how in the guide on how to price your menu.

What not to do

• Switch to lower-quality ingredients without testing: your customers notice before you do.
• Shrink portions all at once: if a portion is too big, adjust it gradually and watch how the plate looks.
• Pick the cheapest supplier without checking yield, like in the brisket example.
• Do it once and forget it: ingredient prices change every week.

Kitchfly helps you keep it up: every recipe's cost updates with each purchase, it alerts you when a dish goes over your target food cost and it shows your P&L with your actual food cost.

Frequently asked questions