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Restaurants’ food costs are also known as Cost of Goods Sold (COGS) and food costs are a percentage of the restaurant’s percentage of sales. The establishment’s COGS can be both actual and theoretical, based on forecasting and seasonal menu changes.

For eateries to maintain an accurate COGS forecast; recipe costing is key. This process is when a restaurant breaks down menu items with the correct cost for portion sizes and individual ingredients (cost out menu). The restaurant should have up-to-date information on vendor pricing for ingredients and supply costs which combined with standardized recipes, owners can properly forecast the COGS for a 12-month period, maintaining all menu items are consistent. A signifticant benefit with recipe costing is ensuring employees are responsible managing food and ingredients with minimal waste, spoilage, shrinkage, and improper portioning. Owners and opterators should ensure all employees are properly trained on menu portioning and enact internal controls to ensure consistency throughout.