Which of the Following Are Considered COGS for Operating a Taco Truck?
Understand the key cost components that make up the cost of goods sold (COGS) for a taco truck, from ingredients to essential operating supplies.
Running a taco truck involves various costs, but not all expenses fall under Cost of Goods Sold (COGS). COGS includes the direct costs of producing the food sold, impacting profitability and pricing decisions. Understanding what qualifies as COGS helps with budgeting, tax reporting, and profit margin calculations.
Core Ingredients and Proteins
The backbone of a taco truck’s menu is its core ingredients, with proteins being the most significant expense. Meat options like beef, chicken, pork, and seafood account for a large portion of COGS due to price volatility and perishability. Beef prices, for instance, fluctuate based on feed costs, weather, and supply chain disruptions. Even minor price increases can shrink margins if menu prices remain unchanged, making it crucial to track costs and adjust pricing or portions as needed.
Beyond proteins, staple ingredients such as tortillas, rice, and beans contribute to COGS. Corn and flour tortillas, whether purchased in bulk or made in-house, are ongoing expenses tied to each taco sold. Rice and beans serve as cost-effective fillers that enhance portion sizes while keeping food costs manageable. Buying in bulk and monitoring supplier prices can help control expenses.
Toppings and Sauces
Fresh produce, including cilantro, onions, tomatoes, and lettuce, must be purchased frequently due to short shelf life. Price swings, caused by weather or supply chain issues, affect profitability. Limes, for example, can see sharp price increases due to poor harvests or import restrictions. Sourcing from multiple suppliers and tracking seasonal trends can help mitigate cost spikes.
Cheese and dairy toppings, such as cotija or sour cream, also impact food costs. These items require proper storage to prevent spoilage, and their prices fluctuate with dairy market trends. Avocados, essential for guacamole, are particularly volatile due to trade policies and crop yields. Some taco truck operators adjust portion sizes or offer guacamole as an add-on to offset fluctuating costs.
House-made or pre-packaged sauces, like salsa verde, chipotle mayo, or crema, further contribute to direct costs. Ingredients such as dried chiles, vinegar, and oil must be factored into COGS, especially when making sauces in-house. While homemade sauces provide customization and fresher flavors, they require additional labor and storage.
Single-Use Packaging
Disposable packaging is a necessary expense for serving customers efficiently. Items like paper food trays, foil wrappers, and biodegradable taco holders contribute to costs. While higher-quality materials improve brand perception, they increase expenses. Compostable containers appeal to environmentally conscious consumers but typically cost more than traditional alternatives.
Beyond food containers, napkins, plastic utensils, and portion cups for sides or condiments add to overall costs. Though small individually, these expenses add up, especially if customers take extra supplies. Some taco truck operators manage costs by offering utensils and napkins only upon request to reduce waste.
Branded packaging, such as custom-printed paper bags or logo-stamped foil wraps, introduces additional costs but can serve as a marketing tool. Bulk purchasing discounts can help offset expenses, but only if order volumes justify the investment.
Cooking Consumables
Cooking oil is a frequently used consumable, essential for frying tortillas, crisping meats, and sautéing vegetables. Its cost fluctuates with global commodity prices, and the choice between vegetable, canola, or lard-based oils affects both expenses and flavor. Managing oil usage efficiently, such as filtering and reusing within safe limits, helps reduce waste and control costs.
Spices and seasoning blends, including cumin, paprika, and garlic powder, are integral to food preparation and part of COGS. Bulk purchases offer savings, but proper storage is necessary to maintain potency. Since seasoning is used in nearly every dish, tracking inventory prevents overuse and unnecessary costs.
Disposable gloves, parchment paper, and aluminum foil are essential for food handling and cooking. While not consumed by customers, these items are necessary for cleanliness and efficiency, making them a direct cost of food preparation. Health regulations often mandate frequent glove changes, increasing usage rates. Managing these supplies efficiently helps control costs while ensuring compliance with food safety standards.