The COGS Confusion

COGS. It’s a common term, but still a confusing one in foodservice. Take a moment and think about your COGS. How do you think about it? What does it include? How much of your costs are included when you decide on a selling price?Do you really want to print a menu based on food cost estimates?In 30+ years of working with foodservice operators and lots of experience in other sectors, I can tell you one thing with confidence: I don’t know of any industry that focuses less on COGS than foodservice. Did you know that most manufacturing facilities (like cars, air conditioners, etc.) include labor as a production cost? Not as overhead, but a real cost to produce the product. That’s not done routinely in foodservice, but probably should be.

Same with the packaging for your catering/retail sales: including packaging is a little more popular, but it’s not universal. It seems easier, doesn’t it? There really is a one-to-one relationship between packaging and the recipe. Every…