Substitution cost
Substitution cost is the true cost difference between two ingredients, compared at edible-portion cost rather than invoice price. A cheaper item with a worse yield or more prep labour is frequently more expensive once both are accounted for.
Worked example · A substitution that costs money
- Current: pre-trimmed fillet, $18.40/lb at 96% yield
- EP $19.17/lb
- Proposed: whole fish, $9.80/lb at 48% yield
- EP $20.42/lb
- Additional butchering labour, 25 min/case
- ≈$0.90/lb
- Proposed option costs more by
- $2.15/lb
The invoice price is 47% lower and the real cost is 11% higher. Whole fish can still be the right call — for quality, for the trim you can use elsewhere — but not on the price tag alone.
Run every substitution through the same three checks: yield-adjusted cost, labour difference, and whether anything on the menu names the ingredient. The third one is not a cost question — see value engineering.
| Check | Question | Kills the swap if |
|---|---|---|
| Yield-adjusted cost | What does a usable pound cost, not a purchased one? | EP cost is higher despite a lower invoice price |
| Labour | How much extra prep time, at what rate? | The labour exceeds the ingredient saving |
| Menu language | Does the menu name the ingredient? | It does — change the copy or don't swap |
Run the numbers
Yield & EP cost calculator
The guide that works it through
How to Raise Menu Prices After Ingredient Costs Increase
Model a menu price change after a supplier increase: restore contribution dollars or margin percentage, calculate required volume and approve a measured decision.
Related terms
Value engineering
Reducing a dish's cost without reducing what the guest perceives they're getting.
Yield percentage
Usable ingredient weight divided by starting weight, expressed as a percentage for a specified preparation step.
Edible portion vs. as-purchased
As purchased (AP) describes food in the form you buy it; edible portion (EP) describes the usable amount after a specified preparation step.