The Difference between Recipe Costing and Food Costing

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As one of the largest and most profitable industries in our society, the foodservice industry can be very complex in terms of appropriately budgeting, spending, and saving money. With so many restaurants popping up all over the country, especially in more urban, populated areas, it is important for you as one of these industry participants to understand the necessity of food costing.

To begin, let’s first discuss the difference between recipe costing and food costing:

Recipe costing: To calculate the food cost, you need to know the cost of each ingredient you are using as well as how much of each ingredient you will need for the dish you are creating. Calculating the entire cost of a menu requires you to know the cost of the ingredients as well as how long the item takes to both prepare and cook.

Food costing: Determining the cost to make each individual dish in order to appropriately assign a menu price that leads to a profit.

Read on to learn more about the fundamentals of food costing, how a recipe-making software can be of assistance in this process, tips on how to price the dishes on your menu, and how MenuSano nutritional analysis software can help your business succeed.

Food Costing Fundamentals

Food costing offers numerous benefits to foodservice providers if done diligently and regularly. It can be tedious but is certainly worth it.

Not only is it important to maintain a basic knowledge of this practice, but you must make a concerted effort to stay on top of the price of ingredients for your meals, as these numbers are constantly changing. The reason for this fluctuation could be a variety of things including, but not limited to, seasonal changes, the economy, and new food trends that become popular. These circumstantial changes will certainly require you to adjust your strategy at times.

By taking the time necessary to go through the process of food costing rather than throwing a menu together without considering these factors, you will boost your long-term revenue and achieve greater success down the road.

It’s important as a foodservice provider to remain adaptable and flexible as well since the restaurant industry is constantly evolving. This is true especially when it pertains to the price of ingredients and having to adjust what you are offering on your menu. It’s important to be aware of these factors and to take advantage of ingredients that may fall in price.

What Recipe Costing Software Can do for You

Recipe costing software is a fantastic tool that foodservice providers should incorporate into their daily operations.

In essence, a recipe costing software enables users to use an ingredient cost database to calculate the cost of the ingredient used in the recipe and determine the total recipe costing. The software then allows users to list all ingredient costs available in the ingredient price database and add suppliers to the system for visibility.

By using this software, you as the foodservice provider can calculate the cost of all of your recipes, ensuring that you are selling each item for the right price. This will ultimately be crucial in helping you and your staff gain a better view of profit margins and assist in planning for the future.

Tips on How to Price Food on your Restaurant Menu

It may sound a bit complicated, but pricing the food on your restaurant menu can be a very simple process! Here are some tips below to get you started:

  1. Write down all of the dishes on your menu.
  2. Write out the recipes for each of these dishes.
  3. Break out the ingredients you will need for each dish.
  4. Research and write down the price of all of the ingredients you will need to create your dishes.
  5. Divide this number (the total food cost) by the number of units that each set of ingredients will create (i.e. how many plates of spaghetti one pound of pasta will make). This will make you rethink your portion size.
  6. Once you have this number, take a look at your dishes and how expensive each one is. Evaluate the most expensive dishes and decide how, if possible, you can
  7. Calculate risks: For example, you need to take into consideration what the cost will be if food goes bad or, on the other hand, the money you will save buying food at a discount.
  8. Take into account your other expenses, such as rent, payroll, utilities, etc.

Using a nutrition analysis software or a food costing software can be of great assistance throughout this process, ultimately making it more efficient and boosting your company’s ROI.

MenuSano to the Rescue

MenuSano is a nutritional value calculator software that will help you take your business to new heights. As a brand new feature, MenuSano features a recipe costing option, adding to the numerous benefits of the user-friendly software. Most importantly, however, is the fact that it gives foodservice providers detailed, accurate information about the ingredients they are using. As a business, this will allow you to be transparent with your customers and show that you are using every resource possible to provide them with the best quality meals.

MenuSano’s software will calculate the total ingredient cost based on the available measurement unit and the imported base price. Users can also export all ingredient costs to an Excel sheet which helps facilitate costs, expenses, and daily reporting for any foodservice establishment. Essentially, this software does all of the work for you and allows you to be more creative in designing the dishes rather than worrying about the logistics of costing.

At its core, MenuSano’s nutritional value calculator software is a dynamic tool that allows foodservice providers to target and cater to consumers while remaining profitable for you as the restaurant owner. By appropriately costing your food and constantly evaluating how to make quality dishes at affordable prices, your business will be able to withstand any fluctuation in the market.

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