How to reduce Food Cost & how to identify?
Food Cost = (Cost of Ingredients / Food Sales) x 100
Ideal Range: 28%-35% (depends on cuisine, concept & region)
7 Actionable Strategies to Reduce Food Cost (With Examples):
1. Portion Control
Why it matters: Over-serving = over-spending.
Example: If your kitchen adds 20g extra paneer per plate, across 100 plates/day that's ₹6,000 lost per week.
Solution: Use portion scoops, scales & visual portion charts. Train your team on "standard serving size".
2. Inventory Management
Why it matters: Expired or unused food = dead stock = money wasted.
Solution: Follow FIFO (First In, First Out). Audit inventory weekly. Label everything by delivery date.
Tip: Use tools like Google Sheets or software like Petpooja, POSist, or MarketMan for better tracking.
3. Menu Engineering
Why it matters: Not every item gives you the same margin.
Solution: Identify high-profit dishes vs. low-margin bestsellers.
Highlight profitable items in your menu layout. Reduce low-margin items unless they attract volume.
4. Waste Reduction
Why it matters: Every piece of unused trim = hidden loss.
Solution: Conduct a daily waste log. Analyze what's being thrown and why.
Repurpose usable trims into soups, stocks, or daily specials.
5. Vendor Negotiation
Why it matters: You're probably overpaying without knowing it.
Solution: Compare prices monthly with at least 2-3 suppliers.
Buy in bulk for high-usage items - but only what you can use before expiry.
6. Seasonal & Local Ingredients
Why it matters: Imported or off-season products = expensive.
Solution: Build your menu around what's cheap now. Highlight seasonal freshness - customers love it!
7. Staff Training
Why it matters: A careless cook can blow your profit margin in a single shift.
Solution: Train staff on SOPs (Standard Operating Procedures), food handling, and waste control.
Reward cost-conscious behavior.
Final Thought:
You don't need to cut corners. You need to cut the waste.
Reducing food cost isn't about compromising on quality -It's about running a smarter kitchen.