10 Tips for Controlling Food Costs in Your Restaurant
Misjudging orders or overspending on food can directly impact your profit margins. By using customized forecasting based on historical data, you can enhance restaurant operations and steadily reduce food costs.
Controlling food costs is a constant challenge for restaurant operators, and it has only intensified in recent years. With fluctuating sales, perishable ingredients, and skyrocketing prices, the margin for error has become even smaller.Â
According to the National Restaurant Association’s latest report, nine out of ten operators say their food costs, as a percentage of sales, are higher than pre-pandemic levels—and most don’t foresee this changing anytime soon.
If you misjudge your food orders or overspend on ingredients, your bottom line suffers. The good news? There are proven strategies to help you handle these costs. From customized forecasting based on historical data to smarter purchasing practices, here are 10 essential tips for controlling food costs in your restaurant and improving your profitability over time.
Essential Strategies for Controlling Food Costs in Your Restaurant
Effective food cost management is key to maximizing your restaurant’s profitability and sustainability. By adopting targeted strategies, you can streamline operations, reduce waste, and ensure that every dollar spent on ingredients contributes to your bottom line.
1. Build a Data-Driven Culture
Data is the key to unlocking savings and efficiency in your restaurant operations. To make informed decisions about ordering, inventory, and portion sizes, you need accurate data on sales trends, food usage, and waste. Encouraging a data-driven culture means ensuring that everyone on your team understands the importance of data. With this information at your fingertips, you can make strategic decisions that reduce food costs without sacrificing quality.
2. Closely Manage Your Inventory
Efficient inventory management is vital for controlling food costs. Knowing what ingredients are coming in, what’s being used, and what’s left over can prevent over-ordering and waste. Monitoring inventory closely also helps identify areas of loss, such as kitchen errors or incorrect preparation. This may seem tedious, but it’s one of the best ways to protect your margins.
3. Make CoGS Review Part of Your Daily Routine
Cost of Goods Sold (CoGS) represents the total cost of all ingredients used in your restaurant during a specific period. It’s no longer enough to calculate CoGS once a week. Daily reviews allow managers to quickly spot rising costs and adjust orders to avoid overstocking and waste. By making CoGS part of your daily routine, you stay on top of food costs and avoid surprises at the end of the month.
4. Forecast Sales Year-Round
Accurate sales forecasting based on historical data helps managers make better decisions about how much inventory to order. By predicting demand based on previous trends—whether it’s seasonal shifts or busy weekends—you can reduce excess inventory and avoid costly waste. Sales forecasting also helps optimize staffing levels, which contributes to overall operational efficiency.
5. Use Inventory Tracking to Reduce Waste
Waste is one of the biggest contributors to high food costs. Implementing detailed inventory tracking, backed by sales forecasts, helps minimize this waste. When managers have clear data about what is needed, they can avoid ordering too much or too little of perishable items. This way, you can reduce spoilage and save money.
6. Cost Out Recipes
Knowing the exact cost of each recipe is essential for controlling food costs. By calculating the cost of individual ingredients and portion sizes, you can optimize food usage and reduce waste. Over time, you’ll identify trends that can help you save money by adjusting portion sizes or improving staff training to reduce errors. Recipe costing also allows you to evaluate if any high-cost items need menu adjustments.
7. Price Menu Items Properly
Your menu pricing strategy directly affects your profit margins. Menu engineering involves analyzing which items are popular and profitable and which are underperforming. If you notice you’re selling a lot of low-margin items, consider adjusting portion sizes or raising prices. Conversely, you might promote high-margin dishes that aren’t getting enough attention. Regularly evaluating and tweaking your menu based on data can help maintain a healthy food cost percentage.
8. Track Variances Between Actual vs. Theoretical Food Costs
Tracking the difference between actual and theoretical food costs is a powerful tool for identifying waste. Theoretical food costs represent what your food costs should be based on ingredient prices and portion sizes, while actual food costs are what you actually spend. Any discrepancies could signal over-portioning, kitchen waste, or even theft. Monitoring this variance helps you catch issues early and make timely adjustments.
9. Train, Train, and Re-Train Staff to Focus on Reducing Food Costs
Controlling food costs is not solely the responsibility of management. Your kitchen and service staff play a critical role in minimizing waste and ensuring proper portioning. Ensure that your managers and staff are trained on food cost fundamentals, including FIFO (first-in, first-out) inventory management, proper portion sizes, and reducing mistakes. Regular training keeps everyone focused on minimizing waste, errors, and theft.
10. Ensure Transparency and Accuracy in Vendor Contract Prices
Errors in vendor pricing or invoicing can significantly impact your food costs. Establishing clear communication with your suppliers and regularly reviewing contracts ensures that you’re getting the prices you were promised. Automating your receiving reports can help you catch discrepancies early. This transparency ensures you’re not being overcharged and helps maintain a consistent food cost percentage.
AAA Food Handler: Your Trusted Partner in Food Safety and Cost Control
At AAA Food Handler, we understand the unique challenges restaurant operators face when it comes to food safety and cost control. With over 35 years of experience in food handling, food safety, training, and management, we have the expertise to help you manage your kitchen more efficiently, reduce food waste, and stay compliant with regulations. Through proper training and management, we can help your team lower costs, improve efficiency, and keep your business profitable.
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This was a very good application, for one, the UI is good and easy to understand, concepts are conveyed in a way that even people with ADHD (like me) have a very easy time understanding and retaining information. My only complaint is that the interactive session on high risk populations was hard for me to understand how to progress, not understanding the way to proceed after selection all the groups that are of high risk to foodborne illness.
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Clear, easy-to-follow materials and helpful quizzes made studying simple and effective. Highly recommend for anyone in food service.
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The course was well thought very informative, and it gave information that was NEEDED. i was not overwhelmed with information that I did not need. Thank you
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easy to do
Easy
Very good
Very, very good!
This was a very good application, for one, the UI is good and easy to understand, concepts are conveyed in a way that even people with ADHD (like me) have a very easy time understanding and retaining information. My only complaint is that the interactive session on high risk populations was hard for me to understand how to progress, not understanding the way to proceed after selection all the groups that are of high risk to foodborne illness.
No Title
Great Food Handler Exam preparation Site
Clear, easy-to-follow materials and helpful quizzes made studying simple and effective. Highly recommend for anyone in food service.
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Shaun's Review
It as overall quick and easy for me and helped me learn more than I already knew.
Five star
Very informative
No Title
No Title
Very convenient
Affordable
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Informative
The course was well thought very informative, and it gave information that was NEEDED. i was not overwhelmed with information that I did not need. Thank you
Simple
Was easy to navigate
No Title
Great Training
Very helpful and learned more than I knew. Test was easy.
No Title
It was really fun and educational.
Great information
Thank you for making this a painless process.
Information moved quickly and gave us important information at work and in our homes.
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FOOD MANAGER
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Great course! Easy to understand and clear voice.
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very clear and interactive
great content
I thought the course was very informative and easy to navigate
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Very well to understand very professional and prepare you for the exam
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This was excellent training. Much of the information I did know but there was lots of new information. I will definitely recommend this course.
informative and easy to understand
Course was easy to navigate, and easy to understand. Very easy to split over multiple days or do at ones own pace.
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Me encanto el curso super entendible y funcional .
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The course is very informative and presented at a pace you control. The questions from each section were very helpful
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very didactic
and easy to understand to put into practice
Informative and Self-Driven
This training was very informative and easy to follow. It was great that you could go at your own pace, especially in my case where I needed to break it up into different times do to my busy schedule. I liked that I could go back to certain points of the video if needed and I could rewatch all together if there were any points I felt like I didn’t fully comprehend while watching. I also appreciate that captions were available! I have a difficult time hearing, so that is a very useful tool for someone like me!
Long long long
It was long but they had parts that I found helpful and it was good it was just super long that’s all
Great Program
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excelente curso
considero que a sido una clase muy importante
Convenient
Simple class to navigate and you can complete each module at your own pace.
Excelente
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Food Manager Reviews
4.9
Great course
Great course! Easy to understand and clear voice.
Rating
Very informal and educational.
No Title
very clear and interactive
great content
I thought the course was very informative and easy to navigate
Great instructing app
Very well to understand very professional and prepare you for the exam
Great Health Dept Education
This was excellent training. Much of the information I did know but there was lots of new information. I will definitely recommend this course.
informative and easy to understand
Course was easy to navigate, and easy to understand. Very easy to split over multiple days or do at ones own pace.
Food manager
I have learned so much about the proper way to handle food
Great Wise Cooking
Very well explained and expressed
Excellent
Me encanto el curso super entendible y funcional .
Super understanding and surprisingly learned a ton.
Food Manager Certification Course
The course is very informative and presented at a pace you control. The questions from each section were very helpful
No Title
very didactic
and easy to understand to put into practice
Informative and Self-Driven
This training was very informative and easy to follow. It was great that you could go at your own pace, especially in my case where I needed to break it up into different times do to my busy schedule. I liked that I could go back to certain points of the video if needed and I could rewatch all together if there were any points I felt like I didn’t fully comprehend while watching. I also appreciate that captions were available! I have a difficult time hearing, so that is a very useful tool for someone like me!
Long long long
It was long but they had parts that I found helpful and it was good it was just super long that’s all
Great Program
Thorough and easy to follow
excelente curso
considero que a sido una clase muy importante
Convenient
Simple class to navigate and you can complete each module at your own pace.
Excelente
Muy importante la clase
Starting at $49.95
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Way longer than 1.5 hours
this took 4 hours and I went as fast as it would let me
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Well Done ...
Well organized and presented. Clear to understand. Site was easy to navigate.
No Title
RBS Training
Very comprehensive and thorough
Service Training
Easy to understand and presented in a very good format. Information was thoroughly presented.
Easy
The course was informative, quick and easy. Thank you!
Easy
Easy to follow along.
good
it was knowledgeable
No Title
Training for alcohol service
It was an amazing explanation of the requirements and expectations.
Very easy to follow
The course was informative and the content was well organized.
Horrible
Website kept cutting out. It took longer to take the course then nessesary!
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EASY TO FOLLOW AND COMPREHENSIVE
ENJOYED THE CLASS AND IT WAS VERY INFORMATIVE
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