Sunday, September 18, 2011

How chefs determine what to charge for food

One question I have often been asked regarding high end restaurants is, "why is the food soo expensive?"

First, please note that what you are often charge in these nice places is necessary, so to help you "non-foodies" understand, I did a simple costing for you.

What is shown below is a basic yield test for whole beef tenderloin.  Beef tenderloin is what chateuabriand and filet mignon come from

A yield test is something all chefs must do for most all foodstuffs to ensure they are managing their costs and charging guests correctly.  In lamens terms, a yield test figures out the waste a particular item has.

Beef tenderloing
Start weight (uncleaned)              11.81 lbs at   $11.67 per pound
Cleaned weight                           6.57 lbs
Yield:                                         divide 6.57/11.81=  55%
100% divided by 55% =             1.81 (this is your yield factor)
Original cost X yield factor         $11.67 X 1.81
New cost per pound (waste factored in)     $21.12
$21.12 / 16 ounces =                  $1.32 per ounce
Filet mignon 8oz- $1.32 X 8=      $10.56-cost for one filet only

The industry standard food cost is around 33%. That means for every dollar you make, you can spend .33 on food.  The food cost will vary depending on the establishmen but that is the generallty accepted number
In other words, if something costs me $1.00, than I need to charge 3X the amount to make money

So how much do we charge for our filet?  Remember, that $10.56 is just the cost of the filet, NOT the selling price ( the price you would see on the menu)

To figure a 33% food cost divide 100% by 33%=3.03

Take the cost of the filet- $10.56 X 3.03 = $31.99 (selling price for the menu)

So, based on that costing, if I just want to serve a filet mignon on a plate with no vegetables, no starch, no sauce, no garnish, I need to charge $31.99 to make money.

What I would do most of the time, (unless I am in a place where food cost isn't a concern) is pair an expensive item, like filet or rack of lamb with inexpensive sides to offset the cost

There are some that argue you can have high food cost items and the lower food cost items will offset the cost.  For example a rack of lamb may have a 39% food cost and a bowl of gazpacho may have a 8% food cost but I like all my costs to be in line.

I will do more postings of this nature to help you all understand the restaurant and chef world a bit more



  1. Great straight forward explanation, thank you!

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