Profit Lies in the Mix

Ahmed Samir Ragab, Food Marketer, MD Food-Xperts

The Myth of Fixed Ratios… and the Truth About the Mix That Really Wins

In the world of trade, retail, and restaurants, reality is always in motion: sometimes wholesale, sometimes retail, sometimes direct distribution, sometimes indirect. Every channel has its own pricing, every sector its own conditions, and even the very same product can generate profit in one place and drain it in another.

Yet in the middle of this complexity, many still cling to an old myth: that Food Cost must be a fixed number — 28%, 35%, or even 45% — or that the Contribution Margin should look the same across all products. The truth? These are nothing but dead ratios that suffocate the living pulse of business.

Your P&L is not a static spreadsheet — it’s a living, breathing entity. Every product, every channel, every outlet plays a different role in the bigger picture of overall profitability. Some products carry high margins and fund the rest. Others spin fast with lower margins but increase transactions and keep the wheels turning. Some simply fill idle capacity and keep lines running. The point is: no single item, no single offer, no single branch can carry the company alone. It’s an orchestra, and when the mix is conducted well, the result is a powerful symphony.

And yes, it is perfectly fine for some products to go beyond the cost threshold and appear to “break the rules” of Food Cost — balanced by others, or even by side items, that compensate. It is fine to build a month (or another month after) around limited-time items or promotions designed purely to attract trial or increase traffic. Alongside those, you may have other products designed to lift average ticket size, others to maximize digital profitability, and others still to serve the percentage target. Sometimes decisions are made on Food Cost %, sometimes on penny profit — the real intelligence lies in balancing both, not worshipping one and ignoring the other.

The real danger of “fixed ratios” is that they blind you to reality: the same product may deliver 40% in dine-in, 25% in a wholesale deal packed with discounts, and 30% on a delivery app with commission cuts. The average here is misleading. Follow it blindly and you’ll find yourself chasing a percentage that looks good on an Excel file projected on the wall in a management meeting, while the real profit in cash — the one that could have gone into the company’s pocket — evaporates through lost opportunities.

On the other hand, there’s another illusion just as dangerous: the obsession with “paper margins” that hides the true cost of business. Take the case of listing in large supermarket chains. On paper, the product price may suggest profit. But add up the real costs across the year — shelf rentals, sampling campaigns, marketing activities, promoters coordinating displays, POS materials, mandatory birthday promotions for the chain — and you may discover you are selling at a total loss. What’s worse is staying in that tunnel with no exit strategy. At times, such losses can be justified as temporary or strategic (entering a new market, building brand presence). But in most cases, they reveal nothing more than a lack of purpose and direction.

To put it simply: you could sell a premium product with a 40% margin, alongside a lower-priced product at 20%. Focus on the ratio, and you’ll conclude margins are down. Calculate properly, and you’ll see the truth: the secret is not in the ratio. The secret lies in the number of units sold of each item, in which channel they were sold, and the actual cash profit achieved.

Business, in the end, is not a frozen table of ratios nor a textbook benchmark. Business is a field, like a football pitch, with different positions and roles. Success is not every player scoring a goal, but the whole team knowing when to pass, when to defend, and when to attack.

The bottom line: fixed ratios are a comfortable illusion, but a dangerous one. To succeed, you must see the mix, hear the pulse of your numbers as they move, and measure success by total outcomes — not misleading averages. Only then will profits come alive again and breathe with full force.