Food cost is the most quoted number when talking about costs in a workshop. It is also the one that, on its own, can mislead you the most. I have seen it happen many times: you calculate the cost of the ingredients, put a markup on top, and think you have the right price. Then at the end of the year the numbers don't add up. The reason is almost always the same: food cost was confused with the full production cost (CPF, Costo Pieno di Fabbricazione).
Let's see what the difference is, with numbers, and why it is the CPF — not the food cost — that should guide you when you set the price.
Food cost: just the ingredients
Food cost is the cost of a product's raw materials: the sum of what the ingredients of that recipe cost you. It is a fundamental figure and the starting point for everything — if you want the details of how it is calculated, I explained it in How to calculate the food cost of a recipe.
But it is only one piece of the puzzle. To make that product you don't spend only on ingredients.
CPF: what it really costs you to produce
The full production cost adds to the food cost all the other items needed to bring the product to the counter:
- the labour cost (the hours of the people producing),
- the packaging (boxes, trays, labels),
- the variable costs (energy, baking, consumption tied to production),
- a share of fixed costs (rent, depreciation, general utilities).
It is the number that tells you what that product really costs you. And the distance from the food cost is often surprising.
The difference in numbers
Back to the example of a tart (the labour figures and costs are indicative, to be calibrated on your own workshop):
| Item | Cost |
|---|---|
| Raw materials → food cost | €3.23 |
| Packaging | €0.40 |
| Labour cost | €1.50 |
| Variable costs (energy) | €0.30 |
| Share of fixed costs | €0.50 |
| Total CPF | €5.93 |
The food cost says €3.23. But producing that tart costs you €5.93 — almost double. If you set the price reasoning only on food cost, you are building your margin on a number that ignores more than half of your real costs.
Why the price is built on the CPF
Imagine applying a "healthy" markup to the food cost: 3.23 × 3 = €9.69. It looks like a good price. But if the CPF is €5.93, the real margin left to you is 9.69 − 5.93 = €3.76, not the €6.46 you thought. And if the markup had been lower, or the labour cost higher, you might even end up below cost.
That is why the price must be built on the CPF: it is the only number that starts from what you really spend. On the food cost you calculate a reference index; on the CPF you decide whether you are making money.
When to use one and when the other
You don't have to choose: you need both, for different things.
- Food cost (and food cost %) → it is excellent as a quick indicator and for comparisons: understanding which products have a higher ingredient incidence, benchmarking, spotting recipes to review.
- CPF → it is the number for setting the price and understanding the real margin, product by product, for both the wholesale and the retail channel.
The underlying mistake
The real mistake is not a calculation error, it is one of perspective: treating food cost as if it were the total cost. From there come prices that are too low, the "I work a lot and earn little", the surprise of the year-end accounts. Once you reason in terms of CPF, the picture changes: you really see which products make you money and which are only keeping your oven busy.
How to have both without manual calculations
Keeping food cost and CPF up to date for every product, at every price change, by hand is an enormous job. KoreLab calculates both automatically: from the recipe and the production batch you get food cost, CPF, yield and pieces in real time — and when a supplier's price changes, everything is recalculated in cascade. From the CPF, the Price lists automatically generate wholesale and retail selling prices with the formula you choose, always aligned with every recalculation.
You can try it for free on your first products: create a free account.
In summary
Food cost is the cost of the raw materials alone; the CPF adds labour, packaging, variable costs and a share of fixed costs, and tells you what it really costs you to produce. Use food cost as an indicator and for comparisons, but set the price on the CPF: it is the only way to know whether you are really making money on that product, and not just on paper.