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How is F&B cost calculated?


As a restaurant owner or manager, one of the key factors that impacts your profitability is the cost of the food and beverages you serve. Understanding how F&B cost is calculated can help you make more informed decisions about what to serve, how much to charge, and how to control costs.


F&B cost, also known as food cost or food and beverage cost, refers to the percentage of your sales that is spent on food and beverage purchases. It is calculated by dividing the cost of food and beverage purchases by the total sales generated from those items. For example, if your restaurant spends $1,000 on food and beverage purchases and generates $5,000 in sales from those items, your F&B cost would be 20% ($1,000 / $5,000 = 0.2).

There are several factors that can impact F&B cost, including the price of ingredients, the yield of those ingredients (how much usable product you get from them), portion sizes, and waste. In order to control F&B cost, it's important to carefully monitor and manage these factors.


One way to control F&B cost is by carefully managing your inventory. This includes tracking what you have on hand, monitoring expiration dates, and rotating products to ensure that you are using the freshest ingredients. It's also important to accurately portion out ingredients and minimize waste, as this can help reduce the amount of money you spend on food and beverage purchases.


Another way to control F&B cost is by negotiating better prices with suppliers and vendors. This can be especially important if you are dealing with high-priced or specialty ingredients. By shopping around and negotiating better prices, you can reduce the amount you spend on food and beverage purchases and improve your profitability.


In addition to managing inventory and negotiating prices, there are other ways to control F&B cost, such as adjusting menu prices, optimizing portion sizes, and promoting higher-margin menu items. By understanding how F&B cost is calculated and implementing strategies to control it, you can improve your profitability and run a more successful restaurant.


Want to learn more about Barometer Technologies or the topics discussed in this post?

Click Schedule a Chat to schedule a demo with our team today, to get a more hands-on look at how Barometer is going to help you run a better business.

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