Ingredient cost and cost price: in the bakehouse, the gap is huge
Ingredient cost of the batchfor each ingredient, the sum of the quantity × its purchase price per kilo or per litre
Ingredient cost per itemingredient cost of the batch ÷ number of saleable items
Cost price per itemingredient cost + labour + energy + packaging, spread over the items sold
Recommended selling price excl. VATingredient cost per item ÷ (target ingredient cost ÷ 100)
In a restaurant, ingredients weigh a quarter or a third of the price. In a bakery, the opposite is striking: a traditional baguette runs around 0,30 to 0,40 € in ingredients, for a selling price well over three times that. Most of its price doesn't pay for the flour — it pays for the kneading, the shaping, the proving, the oven's energy and the night hours.
A direct consequence: ingredient cost alone is never enough to set a price in the bakehouse, and a 20% rise in flour doesn't justify a 20% rise in the window. It justifies a 20% rise on the flour share of the price, which is very different.
The method, step by step
- Weigh the recipe, not your memoryNote the real quantities of the batch: flour, water, salt, yeast or sourdough, butter, sugar, eggs, chocolate. A rough recipe gives a rough cost, and it's always in the wrong direction.
- Convert the prices to per-kiloAn ingredient measured in grams is calculated on a per-kilo price: 30 g of yeast at 3 €/kg is worth 0,030 × 3 = 0,09 €. It's the most common conversion error, and it often falls on the expensive ingredients — butter, chocolate, nuts.
- Divide by the SALEABLE itemsNot by the theoretical number. A batch of 30 baguettes where 2 are overbaked yields 28 to sell: it's by 28 that you divide. That one correction changes the cost by 7%.
- Add the labourTime the hours actually spent on the batch — kneading, dividing, shaping, loading, unloading — and multiply by your all-in hourly rate, employer's contributions included. It's almost always the heaviest item.
- Add energy and packagingThe oven draws power whether it's full or half-empty. Take your oven's rating, your price per kWh and the baking time: you get a cost per batch to spread over the items. Add the bag, the box, the pastry carton.
- Spread the unsold stockIf 5% of the batch ends up in the bin at close of day, the total cost is no longer divided by 60 items but by 57. Unsold stock isn't an accounting inevitability: it's a cost item, and it can be managed.
- Set the selling priceDivide the ingredient cost per item by your target ingredient cost (20 to 30% depending on the product) to get a starting price excl. VAT, then check that it properly covers the full cost price worked out in steps 4 to 6. Add VAT: 5,5% takeaway, 10% eat-in.
The first three steps take thirty seconds in the free ingredient cost calculator: the recipe, the number of items, and it gives the cost per item and the recommended price excl. and incl. VAT.
A full worked example: a batch of country loaves
Let's start small — one kilo of flour, three loaves — then move to a real batch to add the labour and the oven.
- T65 flour: 1 kg at 0,80 €/kg1 × 0,80 = 0,80 €
- Salt: 20 g at 0,50 €/kg0,020 × 0,50 = 0,01 €
- Yeast: 30 g at 3 €/kg0,030 × 3 = 0,09 €
- Ingredient cost of the batch0,80 + 0,01 + 0,09 = 0,90 €
- Saleable items3 loaves → 0,90 ÷ 3 = 0,30 € of ingredients per loaf
- Recommended price at 25% ingredient cost0,30 ÷ 0,25 = 1,20 € excl. VAT, i.e. 1,20 × 1,055 = 1,27 € incl. VAT
So far, that's the ingredient cost. Let's move to the full cost price, on a batch of 60 loaves — the figures below are an illustration, to be replaced with your own.
- Labour: 1 h 30 at 25 €/h all-in37,50 € ÷ 60 loaves = 0,63 € per loaf
- Oven: 10 kW at 0,40 €/kWh, 25 min baking4 €/h × 0,42 h = 1,67 € ÷ 60 = 0,03 € per loaf
- Cost price before unsold stock0,30 + 0,63 + 0,03 = 0,96 € per loaf
- 5% unsold0,96 × 60 = 57,60 € spread over 57 loaves sold = 1,01 € per loaf
- Margin at the recommended price of 1,20 € excl. VAT1,20 − 1,01 = 0,19 €, i.e. 16% of the selling price
0,30 € of ingredients, 1,01 € of real cost price, 1,20 € excl. VAT recommended price: ingredients account for only 30% of what the loaf costs.
This little table explains a lot. It shows why an elaborate pastry can be less profitable than a plain loaf despite a price three times higher: what changes is the labour time, not the price of the ingredients. And it shows why unsold stock costs so much: 5% waste added 5 cents to the cost of every loaf sold, a quarter of the margin.
The case of intermediate preparations
In pastry, half the work is hidden in the preparations: pastry cream, sourdough, détrempe, ganache, praliné. Each has its own ingredient cost, worked out exactly like a recipe — ingredients, quantity produced, cost per kilo or per litre — then reused in every recipe that contains it.
Best practice is to cost them once and for all per kilo, then treat them as an ordinary ingredient: 80 g of pastry cream at 4,20 €/kg in an éclair is worth 0,34 €. The benefit is mechanical: the day the price of butter moves, it cascades into the cream, then into every éclair, millefeuille and religieuse that uses it — without your having to redo anything by hand.
That's exactly what the Bakery app handles: intermediate preparations are recipes like any other, and their cost flows down automatically into the finished products.
The bakehouse benchmark table
| Target ingredient cost | Multiplier | Price excl. VAT | Price incl. VAT (5,5%) |
|---|---|---|---|
| 20% | × 5,0 | 1,50 € | 1,58 € |
| 25% | × 4,0 | 1,20 € | 1,27 € |
| 30% | × 3,3 | 1,00 € | 1,06 € |
| Benchmark | Ballpark |
|---|---|
| Ingredient cost in bakery and pastry | 20 to 30% of the selling price excl. VAT |
| Ingredient cost of a traditional baguette | 0,30 to 0,40 € |
| VAT, takeaway (bread, viennoiserie, pastry) | 5,5% |
| VAT, eat-in | 10% |
The ingredient cost range is lower than in a restaurant because labour and energy weigh more heavily in the bakehouse. These benchmarks are the trade's ballpark figures, not obligations: on VAT and your particular situation, your accountant decides.
The classic mistakes
- Forgetting to convert grams and kilos30 g of yeast at 3 €/kg is worth 0,09 €, not 3 € or 90 €. On expensive ingredients used in small amounts — vanilla, saffron, couverture chocolate — an error by a factor of a thousand goes completely unnoticed in a recipe.
- Dividing by the theoretical number of itemsThe batch billed as 30 items yields 28 saleable ones. Dividing by 30 understates the cost by 7% on every product, every day, all year.
- Stopping at the ingredient costIngredient cost often accounts for only a third of a loaf's real cost. Setting a price on it alone means ignoring precisely what's expensive in the bakehouse: the time and the oven.
- Passing on a flour rise one-for-oneIf flour goes up 20% and it makes up 25% of your cost price, your cost rises by 5%, not 20%. Passing 20% on in the window would drive customers away for a gain the calculation doesn't justify.
- Treating unsold stock as inevitableUnsold stock is a cost item that can be measured and managed. Until it's spread over the items sold, your cost price is wrong — and all the more so on a bad day.
- Forgetting the intermediate preparationsA pastry cream counted as free is a pastry whose margin is wrong. Every preparation has a cost, and that cost must flow down into all the products that use it.