Food cost percentage explained
4 min read · 2026-09-06
Short answer: Food cost percentage is the ingredient cost of one serving divided by its selling price, times 100. A serving with 3.60 of ingredients that sells for 12.00 has a food cost percentage of 30%.
The formula
Divide the ingredient cost of one serving by what one customer pays for it, before tax.
Food cost % = ingredient cost per serving ÷ selling price per serving × 100
How it relates to margin
Food cost % measures ingredients as a percentage of the selling price. Margin measures what remains after all the direct costs MealMargin includes. So direct cost % + margin = 100%. Food cost % and margin are not mirror images, because packaging and other direct costs sit between them.
What MealMargin includes
MealMargin shows two numbers: ingredient cost % (ingredients only) and total cost % (ingredients plus packaging and other per-meal costs). Use the second one when you sell takeaway or delivery.