Recipe Costing

Definition:
Recipe costing is the process of calculating the total cost of ingredients used to make a menu item. It’s the foundation for setting profitable prices and managing Pour Cost, Markup, and margins.

Formula:
Total Ingredient Cost = Σ (Unit Cost × Quantity Used) for each ingredient

In Context:
Without accurate recipe costing, pricing becomes guesswork. Spec automates this process by linking each ingredient in your Spec to its real-time product cost and Unit of Measure (UoM). As prices fluctuate — whether due to vendor changes, inflation, or miscounts — Spec keeps your cost data live and accurate.

Recipe costing isn’t just for cocktails. It applies to syrups, garnishes, batched drinks, prep ingredients, and even non-beverage menu items.

Example:
A cocktail uses:

  • 1.5 oz tequila @ $25/liter → $1.11

  • 0.75 oz lime juice @ $0.05/oz → $0.04

  • 0.5 oz agave syrup @ $0.08/oz → $0.04
    Total Recipe Cost = $1.19

Spec then uses this value to calculate your Cost per Serving, Target Cost %, and menu price recommendations.

Pro Tip:
Keep recipes updated with real product links — not generic placeholders — to ensure accurate costing. Spec makes it easy to update recipes at scale and track how pricing changes impact profitability.

Related Terms: