Recipe costing is working out what one sellable unit of a recipe costs in ingredients and packaging, using what you actually paid. The steps: write the recipe by weight, turn every purchase price into a price per gram, adjust for what's lost in prep (the yield), cost any sub-recipes on their own, add up the batch, divide by what you can actually sell, and compare the result with your price. Below is each step, done once, with a loaf of taro sweet bread.
The short version
- Write the recipe in grams, for one batch.
- Price every ingredient per gram, from the delivered price you paid.
- Divide by the yield for anything that loses weight in prep.
- Cost sub-recipes (doughs, fillings, pastes) first, as ingredients in their own right.
- Add up the batch.
- Divide by the units you can sell, not the units you meant to make, and add packaging.
- Divide the cost by your price. That's your food cost percentage.
TaroStack keeps every step current from what you actually pay. The section near the end shows how.
Step 1: Write the recipe by weight
The loaf comes from Windward Roots, a made-up taro business on Oʻahu that I use for examples, so the numbers line up from one article to the next. One loaf of their taro sweet bread takes:
| Ingredient | Per loaf |
|---|---|
| Taro paste | 300 g |
| Bread flour | 500 g |
| Sugar | 80 g |
| Butter | 60 g |
| Instant yeast | 8 g |
They bake 24 loaves at a time. If your recipe says "4 cups" or "a knob of butter", weigh it once and write the grams down. You can't cost a cup, and a baker's knob is a different size every morning.
Step 2: Price every ingredient per gram
Take what you paid, delivered, and divide by the grams you got. (Delivered means freight included. A bag of flour that cost $25 plus $3 of delivery is a $28 bag of flour.)
| Ingredient | Bought as | Paid | Grams | Per gram |
|---|---|---|---|---|
| Bread flour | 50 lb bag | $25.00 | 22,680 | $0.0011 |
| Sugar | 50 lb bag | $45.50 | 22,680 | $0.0020 |
| Butter | 36 lb case | $144.00 | 16,329 | $0.0088 |
| Instant yeast | 20 × 1 lb | $110.00 | 9,072 | $0.0121 |
Keep four decimal places. Rounding the per-gram price to cents makes flour free.
Step 3: Divide by the yield
This is the step most costing sheets skip, and on some recipes it's the biggest number on the page.
Taro paste starts as whole taro corms, bought at $3.20 a kilo. Peeling, trimming and cooking lose weight: 12 kg of corm makes 10 kg of paste. The yield is 10 ÷ 12 = 83%. So a kilo of paste doesn't cost $3.20, it costs
$3.20 ÷ 0.833 = $3.84 a kilo
Cost the paste at the corm price and every loaf looks $0.19 cheaper than it is (300 g at $3.20 is $0.96; at $3.84 it's $1.15). On 24 loaves a day that's about $4.60 a day of cost you'd never see.
The general rule: usable cost = purchase cost ÷ yield. Strawberries lose their hulls, pineapples lose most of themselves, a brisket loses a third in the smoker. Butter and flour lose nothing, so their yield is 100% and you can skip them.
Step 4: Cost sub-recipes on their own
Taro paste isn't only an ingredient in the bread; Windward Roots also makes kūlolo and poi from it. So it gets its own recipe card and its own cost ($3.84 a kilo), and then it appears in the bread recipe as one line, like flour. Doughs, fillings, glazes, sauces and spice blends all work the same way.
(A fair note: that $3.84 is ingredients only. The hour somebody spent peeling taro is labor, and labor is its own step when you get to pricing. Keep them separate so each number means one thing.)
Step 5: Add up the batch
| Ingredient | Grams | Per gram | Per loaf |
|---|---|---|---|
| Taro paste | 300 | $0.00384 | $1.15 |
| Bread flour | 500 | $0.0011 | $0.55 |
| Sugar | 80 | $0.0020 | $0.16 |
| Butter | 60 | $0.0088 | $0.53 |
| Instant yeast | 8 | $0.0121 | $0.10 |
| Ingredients | $2.49 |
For the batch of 24: 24 × $2.49 = $59.76.
Step 6: Divide by what you can sell
Twenty-four loaves go in. Twenty-three are sellable: one comes out lopsided every batch and becomes the staff loaf. That's normal, and it has to be in the cost, because the lopsided loaf's butter was paid for too.
$59.76 ÷ 23 = $2.60 in ingredients per loaf you can sell.
Then packaging. The bread bag is $0.05 (a case of 1,000 at $48) and the label is $0.06. So the loaf costs $2.71 before anyone's time, the oven, or the rent.
Step 7: Compare with the price
At the shops the loaf sells for $9. Food cost percentage is cost divided by price:
$2.71 ÷ $9.00 = 30%
Whether 30% is good depends on what else the price has to pay for, which is where labor and overhead come in. The next step, cost to price, is how to price baked goods, and labor on its own is how to compute labor cost in baking.
One real comparison, since the numbers are here. When their bake line is full, Windward Roots buys the same loaf from an outside bakery at $4.10. Ingredients alone are $2.71 in their own kitchen, so the $1.39 gap is what the outside bakery charges for its labor, its oven time and its margin. Whether that's a bargain depends on what an hour of your own bake line costs. That's a question recipe costing sets up and doesn't answer.
How often to re-cost
Whenever an ingredient price moves more than a few percent, whenever the recipe changes, and at least once a quarter regardless. Butter and eggs move fastest, and they're usually in everything. If you'd rather not build the sheet yourself, the recipe costing template has these formulas ready, with one tab of prices that every recipe reads from.
Where this stops working
The sheet costs the recipe as written. The kitchen bakes it as baked. The card says 60 g of butter and the new baker uses 70, the paste yield slips from 83% to 78% in a week of small corms, and the cost on the sheet stays the same. The gap between standard cost and actual cost is real money, and a spreadsheet can't see it, because nothing tells it what really went into Tuesday's batch.
Nesting is the other limit. One sub-recipe is manageable. A filling inside a pastry inside a gift box, each with its own yield, turns into a chain of lookups where one mistyped name returns zero and the whole column looks cheaper. And prices get updated on one tab and not another. None of this is carelessness. It's the usual story with spreadsheets.
How TaroStack does it
Doing these seven steps once is worth it. Doing them again every time butter or taro changes price is where most people stop, and the $2.71 loaf quietly becomes a loaf that costs more than anyone priced for. TaroStack keeps the steps current. A recipe is a versioned record with sub-recipes (the taro paste inside the loaf), unit conversion (bought by the 50 lb bag, used by the gram) and a scrap percentage for what's lost along the way, so steps 2 to 4 are set once. Costs come from FIFO cost layers, freight and other landed costs included, so a price change flows into every recipe that uses it without anyone retyping it.
Step 6 gets real numbers too. When a batch is recorded, the ingredients come out of the lots that expire first, the batch record notes which lots were consumed, and actual cost sits beside standard cost, so the loaf that didn't sell shows up in the cost on the day. Margins are worked out on what things actually cost, and a price-creep report shows which supplier has been nudging which price.
Recipes, batches and true cost are on Standard at $99 a month, and the first 30 days are free. Your recipes import from a spreadsheet. If you'd like a hand setting up, ask, and we'll do it with you.