Food Cost Benchmark Question

Dear sir,

I found your website very interesting. Please, kindly could you explain the cost of current food from kitchen (also banquet & f&b). What's the percentage food cost target for each?

I got a little confused whether it's 32% or 33% or 35%. (and also is banquet 24% or 28%?)

Thank you,
Udaya

The target food and beverage cost percentages differ depending on your specific company's budget. Generally, it is wise to run an overall cost of goods sold of 30% or lower. Take all costs of both food and beverage and divide by the total food and beverage revenue. I believe 35% would be too high.

Historically, many operators have set a food cost target of either 32 or 33% and a alcoholic beverage cost target of 18 or 20%. If 3/4 of your volume is food sales, you would achieve the 30% or lower objective.

The reason banquet food costs are often much lower is the inclusion of many non-food items in the contracted BEO revenue. Personally, I like to calculate a profit per guest on BEO reports. Ideally, the revenue for each event should be sufficient to cover all costs (including flowers, music, special decorations, etc.) and allow for a fair profit.