How to Calculate Recipe Costs and Boost Menu Profits in Your Restaurant

Why recipe cost calculation matters for profitability 

Every dish on your menu tells a story - not just about flavour, but about cost. When ingredient prices rise as sharply as they have in recent years, guessing recipe costs is no longer sustainable. 

Without precise recipe costing, operators risk: 

For many businesses, the difference between a good quarter and a tough one comes down to a few percentage points of gross margin. Getting those numbers right - and keeping them accurate, is where recipe costing makes its biggest impact. 

Our own data shows that operators who connect menu and purchasing data typically see around a 1.4% uplift in gross profit margin through tighter control and more informed menu engineering. 

Step-by-step: how to calculate food cost for any recipe 

Accurate recipe costing starts with understanding what goes into each dish, down to the last gram, garnish and prep minute. 

1. List every ingredient 

Write down all ingredients in the recipe, including oils, seasonings, garnishes and even low-cost items like herbs or salt. Every element contributes to the final cost. 

2. Note supplier prices 

Use your latest supplier price list to record the cost per unit (e.g., per kg, litre or pack). If prices change frequently, always use the most recent delivery note, not last month’s estimate. 

3. Account for yield 

Remember that not all purchased ingredients are usable. After trimming, peeling or cooking loss, your yield may be 80–90% of what you bought. 

A 2.5 kg pack of chicken breast may only yield 2.2 kg of cooked, usable meat. That’s a 12% difference that directly affects cost. 

4. Calculate total ingredient cost 

Multiply each ingredient’s cost by the amount used in the recipe. Add all items together for the total ingredient cost per batch. 

5. Include labour or prep time 

Labour contributes to your recipe cost too. Estimate the time needed to prepare one batch, multiply by your average hourly kitchen labour cost, and add that to your ingredient total. 

6. Divide by number of portions 

Finally, divide your total batch cost by the number of portions produced. 

Formula: 

Recipe food cost per serving = (Total ingredient cost + Labour cost) ÷ Number of portions 

Example: 
A Chicken Caesar Salad: 

Recipe food cost per serving = (£28.80 + £6.00) ÷ 10 = £3.48 per portion 

If you sell the dish for £9.50, your gross profit margin is 63% - right in line with a typical target for casual dining. 

Using a recipe cost calculator 

Manually tracking food costs with spreadsheets might seem manageable for a small menu, but as soon as prices change, recipes evolve or you run multiple sites, keeping everything up to date becomes nearly impossible. 

A recipe cost calculator automates that process, turning hours of admin into accurate, real-time insight. Instead of manually updating prices or recalculating margins, digital tools pull in live supplier data, apply yield percentages and instantly update every recipe in your system. 

With a connected recipe management platform, such as Procure Wizard Evo, operators can: 

"The visibility and control over expenditure and supplier relationships has proved to be second to none, it has delivered tangible savings to our bottom line and has given the team the scope and freedom to spend time on making a real difference. "

Cairn Group  

Menu profit analysis: picking your stars and dropping your losers 

Not every best-selling dish is a profitable one. A steak that flies out of the kitchen might also be quietly eroding your margins, while a lower-cost pasta dish could be your real profit hero. 

This is what you’ll be able to understand through menu profit analysis, comparing recipe cost to selling price to show which dishes deserve a place on your menu, and which need to be rethought. 

The goal is simple: maximise your “stars” (high-margin, high-volume dishes) and minimise your “dogs” (low-margin, low-volume ones). 

Here’s a simple approach to start analysing your menu: 

GP per dish = Selling price – Food cost 

GP % = (GP ÷ Selling price) × 100 

Example: 

But with real-time data, operators no longer have to wait for end-of-month reports to understand performance; they can tweak menus, update pricing or adjust stock plans immediately. 

Platforms like Procure Wizard Evo make this process instant with menu engineering analytics, automatically visualising which dishes are your top performers, which are under-delivering, and how changing one ingredient or supplier price can affect your menu’s bottom line. 

Tips for chefs & managers for daily food cost control  

Here are some simple, high-impact ways to control restaurant food costs and keep margins steady, without compromising on quality or guest experience. 

1. Standardise portions and plating 

Train kitchen teams to use the same serving utensils, recipe cards and plating guides for every dish. 

A few extra grams on each portion might not seem much, but across hundreds of covers, it can reduce profits by thousands each year. 

2. Update supplier prices regularly 

Ingredient costs fluctuate weekly. Build a routine to review supplier invoices or connect your recipe costing tool directly to supplier data feeds to stay accurate. 

3. Track waste and adjust recipes 

Encourage chefs to record what’s wasted and why; over-prepping, spoilage or plate returns. Reviewing this weekly can highlight menu items that need reworking. 

4. Conduct quick stock reviews 

Regular stock counts don’t have to be exhaustive. Even short, targeted checks of high-value or fast-moving ingredients can reveal patterns early. 

5. Monitor menu performance 

Keep an eye on sales reports and menu analytics. High-volume, low-margin dishes may need a price or portion review. 

Real time recipe costing analytics for smarter menu decisions 

Imagine spotting that your lasagne’s cheese cost has increased by 12% and seeing, in seconds, how that affects your dish margin and overall menu performance. That’s the power of real-time visibility. 

With connected systems like Procure Wizard Evo, every recipe is linked to live supplier pricing, stock usage and sales performance. The result? 

Ready to take control of your recipe costs and menu profits? 

In this article, we’ve explored how accurate recipe costing and real-time data can help hospitality operators protect margins, reduce waste and make smarter menu decisions every day. 

Procure Wizard already helps thousands of restaurants and hotels do exactly that, combining recipe management, purchasing and live inventory data to give full visibility of costs and profitability across every site. 

And from January 2026, the new Procure Wizard Evo will take those capabilities even further. Built from the ground up with AI-powered recipe costing analytics, intuitive menu engineering tools and a mobile-first design, Evo gives chefs and managers real-time insight into every ingredient, dish and menu margin, right when they need it most. 

Because when every recipe is costed accurately and every decision is backed by data, profit isn’t left to chance, it’s built into every plate. 

Find out more about our best hospitality procurement software yet by booking a walkthrough of Procure Wizard Evo today.