I was going over my P&L for July and my average food cost per cake is about $ 35-50% depending on the cake. My husband is in the food insudtry and he said it way too high and my average should be 15-20%. I tried explaining that cakes are different. For example my 9 inch cheesecake I charge $25.00 it cost me 8.00 to make, so my food cost is 32% if I was to stay in the 15-20% range I would have to charge $40 - $53 for a 9 inch plain cheesecake... which in my area definitely wont happen.I just wanted a general opinion for those who own shops on CC. I was just curious as to what your average food cost is on your cakes and if there is a percentage you try to stay in? Thanks!
I agree with your husband, I think Your FC is too high. Baked products should be 15-20 and savory 30-40 percent FC. Are you paying retail or wholesale, buying small or large quantities? Do you have high waste? These Are some of the variables which affect FC.
My avg. Was 22 percent.
I buy at Sams or Costco because I share the commercial kitchen so it is hard to get too much and store it. I am looking into sysco or something to that sort. Do you have a company to suggest? Thanks for the reply!
Our ingredient cost is in the 20% range. Local restaurant supply stores are great places to shop...if you provide a breakout of what you spend on each ingredient we might be able to point out cheaper options.
thank you all for the help!! Below are a list of my main ingredients and the prices I pay:
- Eggs $1.29 per dozen
- sugar $ 29.99 for 50 lbs / .60 per lb
- Butter $2.58 per lb
- Cake flour hurts me, does anyone know where to get it wholesale? I havent found a place yet and the cheapest I have found it is $2.58 at walmart for the 32oz box Most of my cakes are made from cake flour.
- All purpose flour I pay $8.25 for a 25lb bag / .33 lb
- Cream cheese .99 per 8 oz
- Sour cream I pay $ 5.98 for an 80 oz container / 1.20 per lb/ 16 oz
- I use hi ratio shortning and I found the 50lb bucket of Sweetex at www.fondantsource.com for $89.99
-Powdered sugar is another biggie for me. Sams has it cheap. but my frosting just isn't the same without the Dixie Crystals brand for some reason and the cheapest I found was $2.12 for a 2lb bag.
- Fondant, I get Satin Ice from www.fondantsource.com they have been the most inexpensive I have found. 20lb bucket is $49.99
Let me know your thoughts ... I may just need to raise my prices a little bit.... I do not have alot of waste. thanks again!
The only thing that jumps out is the cake flour, we buy 50# bags of cake flour at our local restaurant supply store for about $15, I believe it's the same price as AP flour.
But it does sound like you'll need to raise your prices, $25 for a 9" cheesecake is way too low for a custom cake shop. If ingredients are $8, it takes you 1 hour at $15/hour to make the cheesecake, and you have $5 in overhead on a per-order basis, every cheesecake you sell is a $3 loss for your business.
Our cheesecake prices start at $40 (or $50 dairy-free), if your customers won't pay that much you'll need to look for different customers.
The prices you are paying aren't off that much on those items, though I think the fondant and cream cheese is a bit high. But, you didn't say what brands/quantities of chocolates, nuts, brown sugar etc. Those can be very pricey if not bought in large quantities and wholesale.
Your prices may be too low: Remember that though you might not be able to get $40.00/cheesecake in your area, if you raised your prices across the board the total avg. FC would be lower.
I would suggest you make a food cost form for each recipe (I know, it's time consuming). That way, you'll have at your fingertips the cost per item, the FC% and profit for each product you bake. You'll see that cookies are maybe 12% FC while a cheesecake may be 30% FC and a cake 22% FC. If you are making more cheesecakes than cookies or cakes, your FC is going to be high if you cannot/do not raise your prices.
Good for you for knowing what your food cost % are - I'm afraid a lot of people guess at cost/profit and continue to work based on inaccurate information. You're already ahead of the pack for keeping good records.
thanks all! I am going to do the FC on all items and raise accordingly. I do need to market to a different client base. I appreciate everyones help!!
sechrestloans, my cheesecakes are all in the $40's. That's where they have to be to make money. Mine are more than $8.00 to make, as they are all premium flavors. You must cater to a different market if you want to make a profit. I use all premium ingredients so cost-cutting isn't an option.
In this business, after you develop your product, you must find your market. Waiting on them to find you, or just catering to the masses, where a very few purchase custom products, will be business suicide in small doses. But... if your market is the masses, fine. You then must get your prices down.
So at $25, your cheesecakes are special occasion, as grocery stores are about $7. But if you don't offer a far superior product, there is no market. That is why I chose to go much higher in quality and offer something that could not be gotten anywhere else. At this price point, you must cater to upper middle/upper income. Even at $25, if your cheesecakes are gourmet, you should be able to cater to a higher income bracket.
EDIT: At $45.00, my cheesecakes had better be the best they have ever had, or I'm out of business. This is the price range of a whole Cheesecake Factory cake.
Spices and Vanilla are expensive too. What are you paying for Vanilla? Are you using pure or imitation? I used pure for years, but then, a study came out that in a blind taste test Americans preferred the taste of imitation vanilla over pure. I still preferred pure, so I made my own mixture of 1/3 pure, 2/3 good quality imitation. Purchasing vanilla by the gallon can save you a lot of money and the difference between pure and imitation can be a LOT of money. Also, spices if bought retail in small jars, can be just as expensive as large 1# wholesale containers.
Thanks everyone! My spices are high. I buy cinnamon in bulk as well as vanilla. Im going to spend this weekend going through each item pricing it to where my FC is no more then 20% and hit the marketing trail in the high end areas. As of now I am being booked by people who are budget concious and want a nice cake for a cheap price. I am still more expensive then Publix and Walmart, but these people are getting much higher quality.It kills me to say no to a customer, but I know that is a part of doing business and I need to buck up. We are looking to buy our own building and I need to have my P&L in the right order and make more profit before I can do so. It would be nice to see a higher profit..
sehrestloans, the great thing about the top of the market is that you will probably have it all to yourself!
If you want a few tips to tap that market, just pm me.