How to calculate your restaurant's food cost

Food cost is the percentage of your revenue that goes toward buying the food you sell. It's the metric that most quickly determines whether a restaurant makes or loses money — and the one most neglected when there's no time for spreadsheets.

The basic formula

Food cost percentage is calculated as:

Food cost % = (Cost of food sold / Food sales) x 100

If in a given week you spent $6,000 on ingredients that turned into $20,000 in sales, your food cost is 30%. The healthy range for most restaurants sits between 28% and 35%; above that, margin erodes fast.

The problem with manual calculation

Doing it by hand requires logging every invoice, every price, and every waste event. In practice, almost no one does this weekly — and when salmon jumps 8% without warning, you find out a month late.

How Teremu solves it

Teremu builds your food cost from what already exists: you scan the supplier invoice, AI extracts the line items, and prices automatically roll into the cost of each dish. There's no daily logging: the number stays alive on its own, and you only correct what matters.

The result is an always-current food cost, with alerts when a supplier raises prices or a dish drops below its target margin.