Food Cost Percentage and Menu Engineering for Ghanaian Restaurants
How to calculate food cost percentage, set a target, and use menu engineering to decide which dishes to promote, re-price or drop. With examples in cedis.
Innkeeper Team · · 3 min read
A restaurant can be full every night and still lose money if the plates cost too much to make. Food cost percentage is the single number that tells you whether your menu prices and your kitchen are working together.
What food cost percentage is
Food cost % = cost of the ingredients in what you sold ÷ food sales × 100
Two details matter:
- Use sales excluding tax. VAT, NHIL and GETFund aren't your revenue.
- Use sales after discounts. If a dish sold at a 10% discount, its food cost percentage is higher than the menu suggests.
As a rough guide, many restaurants aim for somewhere around 28% to 35%. Quick-service and street-style food can run lower; premium seafood and grills often run higher. What matters most is setting your own target and watching the trend.
Costing a single dish
Take a plate of jollof rice with grilled chicken, sold for GHS 95 including taxes. Taking out VAT and the levies at your property's current rates leaves a net price of, say, GHS 78.
| Ingredient | Quantity | Cost |
|---|---|---|
| Rice | 200 g | GHS 5.20 |
| Chicken thigh | 1 piece | GHS 16.00 |
| Tomato, pepper, onion base | portion | GHS 6.50 |
| Oil, stock, spices | portion | GHS 3.30 |
| Coleslaw side | portion | GHS 3.00 |
| Plate cost | GHS 34.00 |
Food cost % = 34 ÷ 78 = 43.6%. Well above a 32% target, so either the price is too low or the portion is too generous.
Ingredient prices change every month in Ghana, so cost your recipes at your average purchase price rather than the last price you paid. Weighted average cost smooths out a one-off expensive delivery.
Theoretical vs actual food cost
What the recipes say you should have used is the theoretical food cost. What actually left the store room is the actual food cost. Work it out from stock counts:
Actual food cost = opening stock + purchases − closing stock
The gap between actual and theoretical is waste, over-portioning, spoilage and theft. If the gap is big, start by checking portions and the store room, not the menu prices.
Menu engineering: four kinds of dish
Menu engineering sorts each dish by two things: how popular it is and how much profit per plate it earns (net price minus plate cost).
| High profit per plate | Low profit per plate | |
|---|---|---|
| Popular | Stars: keep them, feature them, don't change the recipe | Plowhorses: raise the price a little or trim the portion cost |
| Not popular | Puzzles: promote them, rename them, move them up the menu | Dogs: rework them or take them off |
The jollof above might be a Plowhorse: everyone orders it, but it earns little per plate. A GHS 10 price rise, or a smaller chicken piece with a bigger side, could move it towards a Star without losing customers.
A monthly routine
- Update recipe costs with your latest purchase prices.
- Check food cost % for the month against your target, by category.
- Count stock and compare actual with theoretical food cost.
- Re-run menu engineering and pick two dishes to act on.
Without the spreadsheet
Innkeeper's food cost and stock tools deduct ingredients automatically as dishes are served, cost deliveries at weighted average cost, and show food cost % against your target by day, dish and category, using prices excluding tax and after discounts. Menu engineering sorts every dish into Stars, Plowhorses, Puzzles and Dogs, and stock counts show the gap between actual and recipe cost. It all works alongside the restaurant POS.