Ask ten owners what their food cost is and most will quote a number from the last time an accountant worked it out. Ask what it was last week and the room goes quiet. Food cost is the single largest controllable cost in a restaurant, and in most Indian outlets it is measured once a month, after the money is gone.
What the number means
Food cost percentage is consumption divided by food sales, both excluding GST. Consumption is opening stock plus purchases minus closing stock, valued at cost. It is not purchases divided by sales, which is what most people compute when they do not have a stock count, and it is not the recipe cost of what the POS sold, which is what most software shows you. The first ignores what is sitting in the store; the second ignores what never reached a plate.
| Format | Typical food cost range | Why |
|---|---|---|
| Casual dining | 28% – 35% | Larger menus, more prep waste, portions vary by cook |
| QSR | 25% – 32% | Tight menus, pre-portioned, high volume |
| Cloud kitchen | 30% – 38% | Aggregator pricing pressure, packaging often mis-booked as food |
| Café / bakery | 25% – 30% | Beverage-heavy mix; pastry waste is the swing factor |
| Bar-led | 18% – 24% (beverage) | Pour cost replaces food cost as the number to watch |
These are rules of thumb from operators, not benchmarks you must hit. A biryani house in Hyderabad running 36% with a high ticket and low labour can be more profitable than a café at 27%. The number that matters is the gap between what your recipes say it should be and what the stock count says it was.
How drift happens
Drift is the difference between theoretical food cost (what the POS sold, costed at recipe) and actual food cost (what left the store). In a well-run outlet the gap is two to three points. In most it is five to eight, and nobody can say where it went. The usual sources, roughly in order of size:
- Portioning. A 180 g portion served at 210 g is a 17% overrun on that ingredient, every plate, all day.
- Receiving. Short deliveries signed off at invoice quantity. The bill is right; the fridge is not.
- Wastage and spoilage that is thrown away rather than recorded, so it never enters the variance.
- Staff meals and comps rung as nothing, so they are consumed but never sold.
- Price creep. The supplier raises paneer by ₹20 a kilo in March; the recipe card still has the January rate.
The three counts that catch it
You do not need to count everything daily. You need three counts that happen on a fixed rhythm and are entered the same day.
- A weekly full count of the store, after the last service and before the morning delivery, in the unit the recipe uses.
- A daily count of the five to ten items that make up most of your consumption: proteins, paneer, oil, rice, dairy. This is fifteen minutes.
- A receiving count at the door for every delivery, against the purchase order, before the bill is accepted.
With these three in place, theoretical and actual can be compared per ingredient, per week. The report stops being a percentage and becomes a list: chicken is 6% over, oil is 11% over, everything else is within two points. That list is something a chef can act on by Thursday.
Free toolFood cost calculatorOpening stock, purchases, closing stock, sales. Get the percentage for your period.Open →Figures are rules of thumb or statutory rates at the time of writing; confirm anything tax-related with your CA.