The menu price is known. The ingredient price is known. Where the loss between them happens is unknown in most businesses.
Quick answer: Portion cost is calculated by summing the gram-based unit cost of every ingredient in a product's recipe. Waste and cooking loss are added to that total. Food cost percentage is the portion cost divided by the sale price. In restaurants the target range is generally 28 to 35 percent, and on the bar side 18 to 25 percent.
At month-end, a cafe owner often faces the same picture: revenue is up on the previous month, but the number in the bank account is unchanged.
The name of that gap is waste, portion drift and off-recipe use. None of the three is visible until it is measured.
Calculating the portion cost
The calculation has three steps.
Step one: the unit cost of the ingredient.
The purchase price is divided by the purchase unit. If a 25-kilogram sack of flour costs 750 TL, the cost per gram is 0.03 TL.
Step two: weighing out the recipe.
Every item inside the product is weighed. Estimates are not accepted. Exact values are entered, such as 180 grams of chicken, 40 grams of sauce, 25 grams of cheese.
Step three: adding the waste share.
Cleaning, trimming and cooking losses are part of the cost. In red meat this ratio is often 15 to 25 percent, and in leafy vegetables it rises to around 20 percent. A calculation made without waste stays below the real cost.
The sum of the three steps gives the real portion cost.
Food cost percentage and how to read it correctly
Food cost percentage is found as follows:
Portion cost ÷ Sale price (excluding VAT) × 100
If the portion cost is 62 TL and the sale price excluding VAT is 200 TL, the ratio is 31 percent.
The common mistake here is tracking the ratio as a single number across the whole menu. The correct reading is per product. A product running at 22 percent and a product running at 48 percent disappear inside the same average.
The second point to know: the best-selling product and the most profitable product are usually not the same. The item at the top of the revenue list may sit fifth on the profit list.
The gap between theoretical and actual consumption
The real loss sits between these two numbers.
Theoretical consumption: the number of items sold multiplied by the recipe weight. The system produces this figure itself.
Actual consumption: the real consumption found from opening stock, purchases and the closing count.
The gap between the two numbers is the business's invisible loss. Its sources are:
- Portion drift (the ladle filling differently each time)
- Unrecorded comps
- Product spoiled during prep
- Counting error
- Cancellations that were never recorded
A gap above 3 percent is a signal that needs review. A gap above 8 percent points to a structural problem.
The limit of tracking in Excel
This calculation can be done in Excel. The problem is not the method, it is sustainability.
Supplier prices change every week. When a price changes, hundreds of recipes have to be recalculated. An update made in one file does not carry to another. The count is entered by hand, a formula breaks, last month's data is lost.
In the end the calculation is done at period end, and with delay. The decision that follows looks backward.
Where the system takes over
The calculation should be set up once and then update itself. The working setup is this:
- A purchase invoice is entered, and unit costs update automatically across all recipes
- The moment a sale happens, the recipe is deducted from stock
- Theoretical consumption is calculated continuously and compared with actual consumption on count day
- Products whose cost rises above a defined threshold are flagged by the system
- Product-level profit is shown next to the revenue report
In the Kabasakal (Mersin) rollout, cocktail recipes are linked to this structure. On the bar side, portion drift is the highest cost line item, and it only becomes measurable through recipe-based tracking.
Cost that is not measured cannot be managed
Setting a menu price looks like a marketing decision. It is really a cost decision, and its basis is the real, product-level cost.
When a price increase is decided with a number rather than a guess, the risk of losing customers also becomes measurable.
The question the business should ask is not how much it sold this month. It is how much each portion it sold actually earned.
Frequently asked questions
What should the food cost percentage be?
In restaurants the general target range is 28 to 35 percent. On the bar and beverage side it runs 18 to 25 percent. Concept, location and menu structure shift this range.
Is waste included in the portion cost calculation?
Yes. Cleaning, trimming and cooking losses are a real part of the cost. A calculation made without waste stays below the real cost and pricing is built on the wrong basis.
What does the gap between theoretical and actual consumption mean?
This gap shows the loss between the amount that should have been consumed per recipe and the amount actually consumed. Portion drift, unrecorded comps and waste all sit inside it.
How often should portion cost be updated?
It should be updated the moment a supplier price changes. This is not practical with manual tracking, which is why the calculation should run tied to the purchase invoice.
Does a small cafe need recipe tracking?
Yes. In businesses with fewer products, a drift in a single product has a higher impact on total profit.