10 Ways to Reduce Food Costs Without Sacrificing Quality

High food costs squeeze your margins, but cutting corners on quality drives customers away. The solution isn't cheaper ingredients—it's smarter operations. Here are ten proven ways to reduce food costs while keeping your standards high.

1. Master Your Inventory Management

Poor inventory control is the silent profit killer. Food spoils, gets forgotten, or walks out the back door.

What to Do

• **Count inventory weekly** at minimum, daily for high-value items
• **Use FIFO religiously**: First In, First Out prevents spoilage
• **Set par levels** for each ingredient based on actual usage
• **Track waste** in a dedicated log—you can't fix what you don't measure

The Impact

Restaurants typically waste 4-10% of purchased food. Cutting waste in half can add 2-5% to your bottom line.

2. Standardize Your Portions

Inconsistent portioning means inconsistent costs. One cook's "handful" of pine nuts might be twice another's.

What to Do

• **Use portion scales** for proteins and expensive ingredients
• **Pre-portion during prep** when possible
• **Create visual guides** showing exact portions
• **Measure with standardized scoops and ladles**

Example

If your hummus recipe calls for $0.50 worth of tahini per serving but cooks use $0.75 worth, that's 50% higher cost on that ingredient—multiplied across hundreds of servings weekly.

3. Cross-Utilize Ingredients

Every ingredient on your shelf should appear in multiple dishes. Single-use ingredients increase waste and complexity.

What to Do

• **Audit your ingredient list**: Flag items used in only one dish
• **Design recipes around shared bases**: Same vegetable stock for soups, risottos, and sauces
• **Use trim creatively**: Vegetable scraps become stock, bread ends become breadcrumbs

Example

Fresh herbs like basil can appear in: - Caprese salad - Pasta sauce - Infused oils - Herb butter for bread service - Garnish for multiple dishes

4. Negotiate with Suppliers

You have more leverage than you think, especially for consistent, high-volume orders.

What to Do

• **Get multiple quotes** for staple ingredients
• **Commit to volume** in exchange for discounts
• **Ask about payment terms**: Early payment discounts add up
• **Build relationships**: Loyal customers often get first access to deals

Conversation Starters

• "I'm comparing prices across suppliers this quarter..."
• "If I increase my order volume by 20%, what pricing can you offer?"
• "What products do you have excess inventory on this week?"

5. Optimize Your Menu Size

Bigger menus mean more ingredients, more waste, and more complexity. Smaller menus are easier to execute consistently.

What to Do

• **Analyze sales data**: Which dishes actually sell?
• **Cut the bottom 10-20%**: Low sellers with unique ingredients hurt margins
• **Rotate specials**: Test new dishes without permanent commitment
• **Focus on strengths**: Better to do ten dishes perfectly than thirty dishes adequately

The Math

20 menu items might require 80 unique ingredients. Cutting to 15 items could reduce ingredients to 50—less waste, simpler inventory, easier training.

6. Buy Seasonal and Local

Seasonal produce costs less because supply is high. Local products skip transportation markups.

What to Do

• **Build relationships with local farms** for seasonal agreements
• **Adapt your menu** to what's abundant and affordable
• **Feature seasonal specials** that highlight peak ingredients
• **Preserve abundance**: Can tomatoes in summer for winter sauces

Example

Summer tomatoes might cost $2/lb locally and taste incredible. Winter tomatoes shipped from far away cost $4/lb and taste like cardboard. Design accordingly.

7. Reduce Portion Sizes Strategically

Sometimes portions are simply too large. Customers leave food on plates—food you paid for.

What to Do

• **Watch the bus bins**: What comes back uneaten?
• **Reduce by 10%**: Most customers won't notice small reductions
• **Maintain perceived value**: Taller plating looks like more food
• **Offer sizes**: "Regular" and "Hearty" portions give customers choice

Important

Never reduce portion sizes on items customers specifically come for. Your famous veggie burger should stay exactly as expected.

8. Train Your Team

Untrained staff cost you money every shift through waste, mistakes, and inefficiency.

What to Do

• **Document recipes precisely**: Exact quantities, exact techniques
• **Train on knife skills**: Proper cuts mean less trim waste
• **Teach cost awareness**: Staff should know which ingredients are expensive
• **Incentivize efficiency**: Reward teams that hit food cost targets

Example

Properly trained cooks get 60% yield from vegetable prep. Untrained cooks might only get 45%. That 15% difference comes straight from your margin.

9. Leverage Technology

Modern tools automate the tedious parts of cost control.

What to Do

• **Use a [food cost calculator](/)**: Know your costs before menu items launch
• **Implement inventory software**: Track usage patterns automatically
• **Analyze POS data**: Which items sell when, and at what cost?
• **Set up alerts**: Get notified when costs exceed thresholds

The Reality

Manually tracking costs in spreadsheets works until it doesn't. One missed price update throws off your entire menu's profitability calculations. Learn more about the trade-offs in our food cost calculator vs Excel comparison.

10. Review Pricing Regularly

Food costs rise constantly. If your prices stay flat, your margins shrink.

What to Do

• **Calculate food costs quarterly** at minimum
• **Track ingredient price changes** month over month
• **Adjust prices proactively**: Don't wait until margins are critical
• **Communicate value**: Customers accept price increases for quality

For detailed pricing tactics, read our menu pricing strategies guide.

How Much to Raise

Small, frequent increases beat large, rare ones. $0.50 twice a year is easier for customers than $2.00 once every two years.

Putting It Together

You don't need to implement everything at once. Start with the highest-impact changes for your situation:

1. Quick wins: Portion control and inventory counting cost nothing 2. Medium effort: Supplier negotiation and menu analysis take time but have big payoffs 3. Longer term: Technology investments and team training compound over time

Track your food cost percentage monthly. As you implement changes, you should see gradual improvement—from maybe 35% down to 30%, or 30% down to 27%.

Calculate Your Starting Point

Before optimizing, know where you stand. Use a food cost calculator to analyze your current recipes and identify which items have the worst margins.

Not sure what to target? Check our benchmarks by restaurant type to see how you compare.

Try our free food cost calculator to see exactly where your money goes.