What Food Has The Highest Profit Margin?

What Food Has The Highest Profit Margin?

See some of the most profitable food items that restaurants, cafes and food trucks sell

What Food Has The Highest Profit Margin?

One of the best ways to tell what is the most profitable type of food is to look around and see what fast-food shops, restaurants and food trucks are selling.

And you will no doubt see a lot of busy burger joints, fast food shops, trendy vegan cafes, coffee houses, street vendors and food trucks specialized in a wide range of world cuisines.

So what food items have the highest profit margin?

On average the highest profit margin food includes meat-free vegan and vegetarian dishes which utilise vegetables, pulses and legumes, sauces-based cuisines such as curries, chilli and soups, and other items which have low-cost base ingredients such as pizza and pasta.

However, it’s not just the main meals that have high-profit margins – There is also a healthy profit to be made from sides and drinks that can supplement your main offering.

Below I’ve put together 12 of the most profitable types of foods that you will see on main, sides and drinks menus, which successful fast food outlets, restaurants, cafes and food trucks sell.


Contents:

  • Vegan/vegetarian Cusine
  • Sauce-based dishes
  • Chips
  • Pasta Dishes
  • Fried Chicken
  • Burgers
  • Pizza
  • Condiments (Chillis and jams)
  • Juices & smoothies
  • Coffee
  • Speciality teas
  • High-profit margin food ingredients (summary)
  • High-profit food menu example
  • How do you calculate the profit margin on food?
  • Key takeaway

1. Vegan/vegetarian Cusine

What Food Has The Highest Profit Margin?

Vegan and vegetarian food are very popular now, which can be seen in the rise of vegan restaurants, supermarket ranges and traditional fast food outlets providing vegan options.

This type of food is also one of the cheapest to produce, with the highest profit margin because you cut out the meat from the recipes (which is the main cost for any meat dish) using only fruit, vegetable, beans, pulses and legumes.

Main ingredients – Fruit, Vegetables, Beans, legumes

Average profit margin – 70%

2. Sauce-based dishes

What Food Has The Highest Profit Margin?

Any dish that is sauce-based such as curries, chilli and soups has a large profit margin because the main ingredient is tomatoes, water or other types of liquids (coconut milk). This means you can add shredded meats such as beef or chicken to the dish as opposed to serving a dish with lean meat.

With these types of dishes, you can also go meat-free and or bulk it out with cheap foodstuffs such as adding rice or quinoa as a side dish.

Main ingredients – Tomatoes, rice/quinoa side

Average profit margin – 60-70%

3. Chips

What food has the highest markup?

Some of the most profitable food to sell is chips, which can be seen by the number of dedicated chip shops, cafes, bars, restaurants and food trucks that sell it either as a side or as a beefed-up loaded fries version sold as a main.

Its quite an ingenious and versatile food really as all you need is a humble potato and some frying oil and you come up with tasty chips.

Main ingredients – Potatoes, oil

Average profit margin – 70%


Related articles:


4. Pasta Dishes

What Food Has The Highest Profit Margin?

Italian restaurants tend to be one of the most profitable food businesses which is reflected by how competitively priced their food is in comparison to other types of food businesses.

This is because a large proportion of their menu is pasta-based dishes such as ravioli, spaghetti and pasta, which are all made from cheaply sourced durum wheat.

These dishes can also be vegan and made with toppings such as olives and mushrooms which makes it an even highest profit margin food item.

Main ingredients – Durum wheat, eggs or water

Average profit margin – 70%

5. Fried Chicken

highest profit margin food items

You don’t just have to serve vegan and vegetarian dishes to turn a profit. One of the cheapest meats to produce and thus has relatively high-profit margins is poultry, specifically chicken.

It’s a versatile and cheap meat, where you can use the breast for a lean chicken burger and the wings and thighs as a spicy side order. Just look at the popularity of the numerous fried chicken chains on the high street.

Main ingredients – Chicken

Average profit margin – 40-50%

6. Burgers

What Food Has The Highest Profit Margin?

Burgers are another fast-food favourite which can be seen by the number of burger joints and food trucks that have been going strong for years now. And for very good reason.

Burgers are made using ground beef instead of lean meats such as steak which means less goes a lot further. Vegan burgers are also very popular now which businesses sell for not much less than the meat version.

Main ingredients – Ground beef

Average profit margin – 50-70%

7. Pizza

What Food Has The Highest Profit Margin?

Along with burgers and fried chicken, pizza is another firm favourite amongst the masses which you will see plenty of food trucks and restaurants selling. It’s a low-cost food item to produce and has a high-profit margin.

The main ingredients for a pizza base are flour, yeast, salt and olive oil which are relatively cheap to buy. And the toppings can be meat-free, further increasing the markup for the final product.

Main ingredients – flour, yeast, salt and olive oil

Average profit margin (gross) – 60-70%


Related articles:


8. Condiments (Chillis and jams)

What Food Has The Highest Profit Margin?

Condiments such as chilli sauce, chilli jams and jams have gained popularity over recent years. And you will no doubt of seen these products being sold by small producers at food markets or stocked on the shelves at farm shops, independent grocers and large supermarkets.

The number of ingredients that are used to make each 250g jar goes a long way and a 250g jar that can cost as little as 30-50 cents to produce can be sold for upwards of $6.

Main ingredients – Tomatoes, berries, red chillies, red peppers

Average profit margin – 80%

9. Juice & Smoothies

What Food Has The Highest Profit Margin?

High-profit food items are not all about main dishes and sides. Drinks can also provide you with a healthy profit margin.

Juices and smoothies are easy to make and only really require various fruits and vegetables as the main ingredient. And if you create a menu based on seasonal produce this also lowers the cost of the raw ingredients, thus increasing the gross profit.

Main ingredients – Fruit & vegetables

Average profit margin – 85%

10. Coffee

What Food Has The Highest Profit Margin?

There’s a good reason why there are now so many coffee shops in our towns and cities. It’s in high demand and the profits on each cup are high. It can cost as little as 20 cents to produce one cup of coffee which can be sold for up to $5 or more!

It is worth bearing in mind, however, that because coffee is a relatively low-cost menu item you will have to sell a lot to make an overall net profit. Like juice and smoothies, it is better to have coffee as a supplementary item to main and side dishes.

Main ingredients – Arabica beans

Average profit margin – 70- 80%

11. Speciality teas

What Food Has The Highest Profit Margin?

The tea market has come a long way over the last decade or so and there is now a wide array of speciality teas made from foodstuff such as dried berries, herbs and spices that can be served hot or cold.

And just like condiments you only need a small about of ingredients per teabag which are low cost and can be sold for roughly the same price as a coffee, thus providing a high-profit margin.

Main ingredients – Dried berries, spices, herbs

Average profit margin – 85%


High-profit margin food ingredients (summary)

Here is a summary of some of the main ingredients that go into making high-profit margin food items.

  • Fruit & Veg
  • Poultry
  • Rice
  • Wheat
  • Flour
  • Potatoe
  • Arabica beans
  • Dried berries
  • Berries
  • Spices
  • Herbs
  • Tommotoes
  • Chillis


High-profit food menu example

Profitable food menu example

How do you calculate the profit margin on food?

There are three main steps to calculating what the final profit margin will be on a food menu item:

  • Cost of ingredients – The cost of all the ingredients used to make a food item (flour, potatoes, oil etc)
  • Gross profit – The difference between what it cost for the main ingredients and how much you sell it for.
  • Net profit – The amount left over after you have paid for the main ingredients and the operating costs (packaging, utilities etc).

So, for example, the ingredients for a fried chicken breast burger could cost you $1.50 (cost of product) to buy wholesale which you then sell for $8.50.

This is a gross profit of $7. You then need to factor in your operating costs such as packaging, the power you used to make the products etc which may cost an average of $3.50 per unit.

This leaves you with a net profit of $3.50 per menu item, which equates to around a 40% profit margin.

The higher the operating costs (also known as overheads) the lower your net profit will be. Food trucks for example tend to have lower operating costs than fixed-location restaurants because mobile caterers don’t have to pay continuous utilities, rent and business rates.