Recipe costing: how to work out plate cost and food-cost %

Most kitchens know roughly what a dish costs. Roughly is the problem. A chicken plate that you believe costs AED 7 but actually costs AED 9 loses two dirhams every time it sells, and on a busy item that quietly adds up to a meaningful hole in the month. Recipe costing replaces the guess with a number you can defend.

The method is not complicated. It needs a written recipe, honest quantities, current purchase prices and a little arithmetic. The discipline is in keeping it up to date.

Start with a recipe card#

A recipe card lists every ingredient that goes onto the plate, the quantity used and the unit of measure. It is the same card your chefs should be cooking from, so the cost and the dish describe the same thing. If the line cook adds a ladle of sauce that is not on the card, your costing is already wrong.

• Ingredient: the specific item you buy, for example boneless chicken thigh rather than just "chicken".
• Quantity: what actually goes on the plate per portion, weighed rather than estimated.
• Unit: grams, millilitres or pieces. Pick one unit per ingredient and stick to it.
• Portions per batch: for anything made in bulk, how many portions one batch really produces.

Purchase unit versus recipe unit

You buy chicken in 10 kg cases, fries in 2.5 kg bags, oil in tins and bread in packs of fifty. Your recipe uses grams and pieces. Costing depends on converting the purchase price into a price per recipe unit.

The conversion is simple division: price per purchase unit divided by the number of recipe units it contains. A pack of fifty breads at AED 12.50 is AED 0.25 per piece. A 2.5 kg bag of fries at AED 22.50 is AED 9 per kilo, or AED 0.009 per gram. Write the conversion down once per item so nobody has to redo it at the pass.

Yield and trim loss: as-purchased versus edible portion#

This is where most costings go wrong. What you pay for is the as-purchased weight. What reaches the plate is the edible portion, after trimming fat, peeling, removing bones, cooking loss or discarding outer leaves. The difference is real cost and it has to be carried by the dish.

Measure yield yourself by running a butchery or prep test: weigh what comes in, prep it the way your kitchen normally does, weigh what is usable. Repeat it a few times and use the typical result. Yield changes with suppliers and with staff, so retest when either changes.

Sub-recipes, garnish and packaging#

Sauces, marinades, doughs, dressings and spice mixes are recipes in their own right. Cost each one once as a batch: total ingredient cost divided by the usable quantity the batch produces. That gives a cost per gram or per litre which every dish using it can reference. When garlic or oil goes up, you update one sub-recipe and every dish that uses it moves with it.

Do not leave out the small things. A sprig of parsley, a dusting of sumac, a lemon wedge, a pickle on the side: each is a few fils, but they appear on every plate. For takeaway and delivery, the box, lid, sauce cup, napkin and bag belong in the costing too. Many kitchens keep a separate takeaway version of the recipe card for exactly this reason.

A worked example: chicken shawarma plate#

Here is a dine-in chicken shawarma plate costed line by line. Every price below is illustrative, chosen only to show the method. Use your own supplier invoices.

Notice the chicken line. Without the yield adjustment it would show AED 3.96, and the whole plate would look nearly a dirham cheaper than it really is.

From plate cost to food-cost %#

Food-cost % is plate cost divided by the net selling price. In the UAE, menu prices shown to customers are typically VAT-inclusive, and the VAT portion is not your revenue: it belongs to the FTA. So divide the menu price by 1.05 to get the price excluding VAT before you calculate.

• Menu price (VAT-inclusive): AED 32.00
• Net selling price: 32.00 ÷ 1.05 = AED 30.48
• Food-cost %: 8.24 ÷ 30.48 = 27.0%

Had you divided by the VAT-inclusive AED 32, you would have reported 25.8%, flattering every dish on the menu by the same margin of error. If a service charge is added to the bill, leave that out too and use the item price itself.

Working back from a target

To price a dish, reverse the calculation: net price = plate cost ÷ target food-cost %, then multiply by 1.05 for the menu price. The takeaway version of the plate adds AED 1.20 of packaging, so its plate cost is AED 9.44. At a 30% target, the net price is 9.44 ÷ 0.30 = AED 31.47, and the VAT-inclusive menu price is about AED 33.04, which you might round to AED 33 or 34.

What target should you use? It varies widely by concept, format and rent, and published "ideal" figures rarely fit any particular kitchen. The right target is the one your own P&L supports once labour, occupancy, delivery commissions and everything else are paid.

Costing modifiers and extras#

Modifiers change the plate, so they change the cost. "Add cheese" might be a 20 g slice at an illustrative AED 30 per kilo, which is AED 0.60. If you charge AED 3 including VAT, the net price is AED 2.86 and that extra runs at about 21%. Free modifiers, such as extra garlic sauce, still cost money: cost them so you know what generosity is worth.

Theoretical versus actual food cost#

The figure above is theoretical food cost: what the dishes should have cost if every plate matched its recipe card. Actual food cost comes from stock: opening stock plus purchases minus closing stock, valued at cost. The gap between the two is where the money goes, whether through waste, over-portioning, unrecorded staff meals, receiving errors or loss.

Recipe costing is what makes that comparison possible. Without a theoretical figure, you only know the month was disappointing, not why.

Keeping costs current#

A costing done once and filed away decays every time a supplier changes a price. Review the costing whenever an invoice shows a meaningful change on a key ingredient, whenever you switch supplier or pack size, and at a regular interval for everything else. Pay most attention to the ingredients that make up the largest share of your plate costs, because that is where a price rise hurts most.

This is where software earns its keep. EXO NODES costs recipes from your current supplier prices, so plate costs move when purchase prices do, and it deducts the ingredients from stock when a dish sells, which gives you the theoretical usage to compare against your counts.

Key takeaways#

• Cost from a written recipe card that the kitchen actually cooks from.
• Convert purchase units to recipe units and adjust for yield: edible cost = purchase price ÷ yield %.
• Cost sub-recipes once and reuse them; include garnish and packaging.
• Food-cost % = plate cost ÷ net selling price, and in the UAE that means menu price ÷ 1.05.
• Set targets from your own P&L, not from a generic benchmark.
• Compare theoretical with actual food cost, and update costings when supplier prices change.