Precise definitions of technical food manufacturing terms: CPF, food cost, production yield, recipe normalisation, HACCP, EU allergens and technical sheet.
The total cost to produce a single unit of finished product. Includes: raw material cost per unit, packaging cost, labour quota and fixed and variable cost quota of the batch.
The percentage of the selling price absorbed by raw material costs. Example: product sold at €10 with €3 of ingredients → food cost 30%. Does not include packaging, labour or fixed costs.
The standardisation of recipe ingredient quantities to a fixed base, typically 1 Kg of finished product. Allows easy multiplication for any batch size.
The automatic mechanism by which a change in a raw material price propagates to all products containing it, automatically recalculating CPF and margins.
The weight of the actually sellable finished product, net of weight loss (water evaporated during baking, processing waste). Example: 10 Kg of dough with 15% loss → net yield 8.5 Kg.
The 14 food allergens whose declaration is legally mandatory under EU Reg. 1169/2011: cereals with gluten, crustaceans, eggs, fish, peanuts, soya, milk, tree nuts, celery, mustard, sesame, sulphur dioxide, lupin, molluscs.
European regulation on food information to consumers, mandatory since 13 December 2014. Defines mandatory information on labels and technical sheets.
B2B document that comprehensively describes a food product: composition, allergens, nutritional values, physico-chemical characteristics, storage conditions, shelf life. Required by retail buyers and distributors.
Hazard Analysis and Critical Control Points: mandatory food safety management system (EU Reg. 852/2004) for all food business operators.
Difference between the selling price and CPF. Gross margin % = (selling price − CPF) / selling price × 100.
The multiplicative coefficient applied to the CPF to obtain the selling price. Markup = 1 / (1 − margin%). For a 40% margin, markup is 1 / 0.60 = 1.67x.
The quantity of product produced in a single production session. The CPF per unit is obtained by dividing the batch cost by the number of units produced from the net yield.
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