What food cost percentage is right for a restaurant, pizzeria, gelateria or bar?
Food cost is the share of revenue that pays for the ingredients a venue uses over a period, usually a month or a week. For a single dish, it is the cost of ingredients divided by the selling price excluding VAT. The right percentage depends on how much the venue's other costs weigh (labor, rent, utilities and overheads) and on the margin the owner wants to earn. In this guide's example, a restaurant with €600,000 in revenue can spend at most 30% on raw materials.
In brief
- The food cost of a dish is the cost of ingredients divided by the price excluding VAT, multiplied by 100.
- The sustainable percentage is what remains after labor, rent, other costs and margin.
- On €600,000 of revenue, each point of food cost is worth €6,000 a year.
How is food cost calculated?
Food cost is calculated in two ways, which answer two different questions.
Food cost of a dish = cost of ingredients ÷ price excluding VAT (IVA) × 100
Monthly food cost = (opening inventory + purchases − closing inventory) ÷ net revenue × 100
The first starts from the recipes and shows what each dish should cost. The second starts from the accounts and shows what the restaurant actually spent. When the monthly food cost is higher than the recipe food cost, the gap points to waste, portions larger than planned, or goods that leave inventory without being sold.
In both cases, revenue is taken net of VAT, which is 10% on food and beverage service (Agenzia delle Entrate, the Italian Revenue Agency). A €30 check therefore corresponds to €27.27 of revenue.
What should it be, by type of venue?
As a first reference, ACRA uses the values below. They come from its work on venue accounts. They are not an industry statistic.
| Venue | ACRA reference values | Calculation example |
|---|---|---|
| Restaurant | 25–32% | Sliced steak (tagliata) at €23: 29.9% |
| Pizzeria | 18–25% | Margherita at €8: 14.7% |
| Gelateria | 18–20% | 130 g gelato cup at €2.70 excluding VAT: 15.7% |
| Bar | 20–25% | Espresso at €1.30: 15.9% · cappuccino at €1.60: 22.8% |
Each range applies to the venue's total sales. A basic product such as the margherita, the gelato cup or the espresso can sit below the range. Products with more expensive ingredients bring the venue's average into the range. The examples use hypothetical purchase prices.
Confcommercio (the Italian Confederation of Commerce) publishes Le Bussole, which indicates “ideal” values between 18% and 29% depending on the type of restaurant, without stating which data they are based on (Le Bussole).
How is the maximum food cost of a venue calculated?
Sustainable food cost is what remains after all other costs and the margin the owner wants to earn have been covered.
Maximum food cost = 100 − labor % − rent % − other costs % − target margin %
| ACRA calculation (example) | % of revenue | Euro/year |
|---|---|---|
| Revenue excluding VAT | 100% | 600,000 |
| Labor | 32% | 192,000 |
| Rent | 10% | 60,000 |
| Other costs | 16% | 96,000 |
| Target margin | 12% | 72,000 |
| Maximum food cost | 30% | 180,000 |
In this example, the venue can spend up to 30% of revenue on raw materials, which is €180,000 a year. If rent were 14% instead of 10%, the maximum would fall to 26%. For this reason, two venues with the same menu can have different sustainable food costs.
Each point of food cost equals 1% of revenue. On €600,000, that is €6,000 a year moving from margin to purchases.
Frequently asked questions
What should the food cost of a restaurant be?
It depends on the venue's income statement. It is the percentage left after subtracting labor, rent, other costs and the target margin from 100. In this guide's example it is 30%. As a first reference, ACRA uses a range of 25% to 32%.
Is food cost calculated on the price with or without VAT?
Without VAT (IVA). A dish priced at €11 on the menu corresponds to €10 of revenue.
Does kitchen labor count toward food cost?
No. Food cost includes only raw materials. Labor cost is a separate line of the income statement.
New · ACRA Academy
ACRA Food Cost Pro
The cost of every dish and your actual monthly food and beverage cost, with supplier invoices loading by themselves. The file is in Italian.
Sources
- Tax rate of 10% VAT (IVA) on food and beverage service: Agenzia delle Entrate, ruling no. 412/2023 (in Italian).
- “Ideal” food and beverage cost values by type of restaurant: Le Bussole, Confcommercio (in Italian).
- Weights for the margherita: Associazione Verace Pizza Napoletana, Disciplinare (production specification), 2024 (in Italian).
- The calculation examples are elaborations by AC Retail Advisory on hypothetical values.
Updated October 9, 2026.
Author
Andrea Calistri, founder of AC Retail Advisory. I have 20 years of experience in food retail and the food industry and have opened more than 200 locations. I have run operations for restaurant networks, served as CEO in Italy, France and the Netherlands, and advised restaurant chains and food companies as a consultant.
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