If your food cost is higher than it should be, the cause is almost always one of five things: portion drift, waste, supplier price creep, unrecorded loss, or menu mix. You identify which by comparing theoretical food cost, what your recipes say you should have used, against actual food cost from inventory. The gap between them is your variance, and the shape of that gap names the cause.
Calculate both numbers first
Actual food cost = (opening inventory + purchases − closing inventory) ÷ net sales × 100. Theoretical food cost = the sum of every recipe's ingredient cost multiplied by the quantity the POS says you sold, divided by net sales. If actual is 32% and theoretical is 28%, your variance is 4 points, and those 4 points are the entire investigation.
Portion drift
Variance concentrated in a few high-volume items, consistent across every service. A cook adding 20 grams over spec on your best-selling dish costs more over a month than most operators expect, and it never appears as an incident. Look for items where variance scales exactly with units sold.
Waste and spoilage
Variance concentrated in perishables and clustered around low-demand days. This is a forecasting problem before it is a discipline problem: prep and ordering built on last week's numbers instead of this week's expected demand produce predictable waste. Accurate demand forecasting is the structural fix, DataGrid forecasts run at 92% accuracy.
Supplier price creep
Theoretical cost itself rises while portioning stays constant. Contracted rates and invoiced rates diverge quietly, one line item at a time. This is the easiest cause to fix and the most commonly missed, because catching it requires comparing every invoice line against the agreed price, which nobody does by hand.
Unrecorded loss
Variance that does not correlate with sales volume, waste logs or supplier pricing, and often concentrates in specific shifts or locations. Rule out the other four causes before reaching this one, most suspected theft turns out to be portioning or receiving errors.
Menu mix
The one cause that is not a problem. If customers shifted toward lower-margin items, blended food cost rises while every individual recipe stays on spec. Nothing is broken; your mix changed. The response is pricing or menu engineering, not kitchen discipline, which is why diagnosing before acting matters.
Why this is hard manually
Separating five causes requires recipe costs, POS sales, waste logs, supplier invoices and inventory counts to sit side by side for the same period and the same branch. Assembled by hand, that is a week of work and out of date on arrival. Assembled automatically, it is a view you check during the period, while the margin is still recoverable.