FIFO Method for Restaurants: Complete Implementation Guide

First-In-First-Out (FIFO) is the single most important inventory management principle for restaurants. Proper FIFO implementation reduces spoilage by 40-60%, ensures food safety, improves product quality, and directly impacts profitability.

Despite its critical importance, many restaurants struggle with consistent FIFO practices. This comprehensive guide provides everything you need to implement effective FIFO systems that become second nature to your team.

What Is FIFO and Why It Matters

FIFO Definition

First-In-First-Out means using the oldest inventory first, before newer inventory.

Simple Example:

Monday: Receive 50 lbs chicken (dated 1/20)
Wednesday: Receive 50 lbs chicken (dated 1/22)
Thursday prep: Use Monday's chicken (1/20) first, not Wednesday's (1/22)

The Principle:
Whatever came in first should go out (be used) first. Oldest products are always used before newer products.

Why FIFO Is Critical

Food Safety:

• Prevents expired product from being served
• Reduces food-borne illness risk
• Ensures consistent quality
• Essential for health inspections
• Protects customers and reputation

Financial Impact:

• Spoilage costs 2-10% of food purchases
• Example: $500,000 annual food cost × 6% spoilage = $30,000 wasted
• Proper FIFO reduces spoilage by 40-60%
• Potential savings: $12,000-18,000 annually

Quality and Consistency:

• Fresher ingredients
• Better tasting food
• More consistent product
• Customer satisfaction
• Competitive advantage

Regulatory Compliance:

• Health department requirements
• HACCP standards
• Food safety certifications
• Liability protection
• Insurance considerations

The Cost of Poor FIFO

Real Restaurant Example:

Mid-sized casual dining restaurant
Annual food purchases: $480,000
Without proper FIFO:
- Spoilage rate: 7.5%
- Annual spoilage cost: $36,000
- Additional issues:
  - 3 health department violations
  - 2 customer illnesses reported
  - Inconsistent food quality
  - Staff turnover from frustration

With proper FIFO:
- Spoilage rate: 2.8%
- Annual spoilage cost: $13,400
- Annual savings: $22,600
- Additional benefits:
  - Zero health violations
  - Zero illness reports
  - Improved Google reviews
  - Better staff morale

FIFO Fundamentals

The Basic System

Three Core Components:

1. Date Everything

• Mark received date on all products
• Use clear, consistent format
• Visible and prominent location
• Weather-resistant marking

2. Store Newest Behind Oldest

• New deliveries go to back
• Older items pulled forward
• Accessible oldest items
• Physical separation when possible

3. Use Oldest First

• Check dates before use
• Pull from front (oldest)
• Rotate during prep
• Never work around old items

FIFO vs. LIFO vs. FEFO

FIFO (First-In-First-Out):

• Use oldest first
• Standard for restaurants
• Best for perishables
• Reduces spoilage

LIFO (Last-In-First-Out):

• Use newest first
• NEVER appropriate for restaurants
• Guarantees spoilage
• Avoid completely

FEFO (First-Expired-First-Out):

• Use soonest-to-expire first
• Variant of FIFO
• Good for varying shelf lives
• Same principle, different priority

Example:

Product A: Received 1/15, expires 1/30 (15 days shelf life)
Product B: Received 1/20, expires 1/25 (5 days shelf life)

FIFO: Use Product A first (received first)
FEFO: Use Product B first (expires first)

For restaurants: FEFO is actually better for mixed products
But FIFO works if consistent product types

Temperature Considerations with FIFO

Cold Storage FIFO:

• Walk-in refrigerators: 38°F or below
• Freezers: 0°F or below
• Temperature affects shelf life
• Monitor and log temps daily

Shelf Life by Temperature:

Fresh Chicken at 38°F: 2-3 days
Fresh Chicken at 41°F: 1-2 days (30% shorter)
Fresh Chicken at 45°F: <1 day (unsafe)

Conclusion: Temperature + FIFO = Maximum shelf life
Temperature alone: Not enough
FIFO alone: Not enough
Both together: Essential

Implementing FIFO: Step-by-Step

Step 1: Date Labeling System

Choose Labeling Method:

Option 1: Date Dots/Stickers (Recommended)

• Color-coded by day of week
• Pre-printed or write-on
• Waterproof and durable
• Easy to see at glance
• Cost: $15-30 for 1,000

Color System Example:

Monday = Blue dot
Tuesday = Yellow dot
Wednesday = Green dot
Thursday = Orange dot
Friday = Red dot
Saturday = Purple dot
Sunday = White dot

Benefits:

• Visual identification from across room
• No need to read small print
• Intuitive after learning system
• Works for all literacy levels

Option 2: Masking Tape and Marker

• Cheap and accessible
• Write date received
• Works anywhere
• Can fall off or smudge

Option 3: Printed Labels

• Label printer (Dymo, Brother)
• Professional appearance
• Durable
• Item name + date possible
• Cost: $150-300 for printer

Best Practice: Combination

• Color dots for day-to-day
• Written dates for longer storage
• Both for high-value items

Step 2: Receiving Procedure

Create Receiving Checklist:

Every Delivery:

1. Check order against invoice

   • Verify quantities
   • Check for correct items
   • Note any discrepancies

2. Inspect quality

   • Temperature (use thermometer)
   • Appearance and smell
   • Damage or defects
   • Expiration dates on packages

3. Date all items immediately

   • Before putting away
   • Use consistent format (1/20/25 or 01/20)
   • Label outer packaging
   • Individual items if case broken

4. Store properly with FIFO

   • Check what's already there
   • Put new behind old
   • Verify rotation possible
   • Clean area if needed

Receiving Station Setup:

• Date dots/tape easily accessible
• Marker that works
• Temperature probe
• Receiving checklist posted
• Scale for verification
• Camera/phone for issues

Step 3: Storage Organization

Organize for FIFO Success:

Shelving Configuration:

BEFORE (FIFO Difficult):
Deep shelves, items stacked
New items on top of old
Can't see dates
Heavy lifting required

AFTER (FIFO Easy):
Flow-through shelving (new in back, old in front)
Single-layer storage when possible
Clear view of all dates
Easy access to oldest items

Walk-in Cooler FIFO Layout:

Door side: Prep area (pulling items for use)
Back wall: Receiving area (new items enter)
Shelves: Front-to-back flow

Top Shelf: Proteins (use quickly)
- Chicken (1-2 days)
- Fish (1-2 days)
- Beef (2-3 days)

Middle Shelf: Dairy and Prep
- Cheese (1 week)
- Prepared items (3-4 days)
- Sauces (4-7 days)

Bottom Shelf: Produce (organized by shelf life)
- Short life front (1-2 days)
- Longer life back (3-5 days)

Key Principles:

• New items have harder access (back/bottom)
• Old items have easy access (front/top)
• Can't accidentally grab new instead of old
• Visual confirmation of dates easy

Step 4: Daily Rotation

Morning Prep Routine:

1. Check all dated items

   • Walk through all storage
   • Note items approaching expiration
   • Pull to front if buried

2. Rotate during prep

   • Use oldest items first
   • Move newer items forward
   • Consolidate partial containers
   • Clean and organize

3. Plan specials around older inventory

   • Items 1-2 days from expiration
   • Feature in daily special
   • Discount if necessary
   • Donate if safe but unsellable

Shift Change Procedure:

• Brief incoming team on aged items
• Note what needs using soon
• Add to prep list if needed
• Update 86 list if running out

Step 5: Staff Training

Initial Training (1 hour):

• Why FIFO matters (safety and cost)
• How system works (date, store, use)
• Hands-on practice
• Questions and scenarios

Training Checklist:

• ✓ Understand FIFO concept
• ✓ Know dating system (colors or format)
• ✓ Can properly label items
• ✓ Demonstrate proper storage
• ✓ Identify oldest items correctly
• ✓ Know what to do with near-expiration items

Ongoing Reinforcement:

• Include in orientation for all new hires
• Quarterly refreshers
• Spot audits with feedback
• Celebrate good FIFO practices
• Address violations immediately

FIFO by Category

Proteins (Most Critical)

Shelf Life (Refrigerated):

• Fresh fish: 1-2 days
• Shellfish: 1-2 days
• Chicken: 2-3 days
• Ground meats: 2-3 days
• Whole cuts beef/pork: 3-5 days

FIFO Best Practices:

• Date immediately upon receiving
• Store in single layers when possible
• Separate by type and date
• Check dates every shift
• Use near-expiration in specials
• Never serve expired protein

Example System:

Monday delivery: Chicken dated 1/20 (use by 1/23)
Wednesday delivery: Chicken dated 1/22 (use by 1/25)

Prep list Thursday 1/23:
1. Use all remaining 1/20 chicken (last day)
2. Begin using 1/22 chicken if needed
3. Note 1/22 chicken must be used by 1/25

Produce

Shelf Life Varies Widely:

• Herbs: 3-7 days
• Leafy greens: 3-7 days
• Berries: 2-5 days
• Tomatoes: 3-7 days
• Root vegetables: 2-4 weeks
• Citrus: 1-2 weeks

FIFO Challenges:

• Visual ripeness matters
• Some ripen after delivery
• Ethylene gas affects others
• Individual inspection needed

Best Practices:

• Date cases/boxes upon receiving
• Daily visual inspection
• Separate ethylene producers (apples, bananas)
• Use ripe items immediately
• Don't wait for perfect ripeness

Example:

Tomatoes received 1/20:
Day 1 (1/20): Hard, underripe
Day 2 (1/21): Ripening
Day 3 (1/22): Perfect
Day 4 (1/23): Still good
Day 5 (1/24): Getting soft
Day 6 (1/25): Must use today (soup, sauce)
Day 7 (1/26): Compost

FIFO requires using 1/20 tomatoes on 1/25 even if 1/22 tomatoes are more perfect
Or plan: Use 1/20 on day 3-4, use 1/22 on day 5-6

Dairy and Eggs

Shelf Life:

• Milk: 5-7 days after opening
• Cheese (hard): 2-4 weeks
• Cheese (soft): 1 week
• Eggs: 3-5 weeks
• Butter: 1-3 months
• Cream: 5-7 days after opening

FIFO Approach:

• Check expiration dates (pre-printed)
• Date when opened
• FEFO makes sense here
• Small containers rotate faster

Dry Goods

Shelf Life:

• Flour, sugar: 6-12 months
• Rice, pasta: 1-2 years
• Canned goods: 1-5 years
• Spices: 6-12 months (potency loss)

FIFO Importance:

• Less critical than perishables
• Quality degrades over time
• Pests attracted to old products
• Storage space optimization

Simplified Approach:

• Date when received
• Store new behind old
• Rotate every month
• Check annually for very old items

Prepared Items (In-House Prep)

Maximum Storage Times:

• Cooked proteins: 3-4 days
• Cut vegetables: 1-2 days
• Prepared sauces: 4-7 days (varies)
• Soups and stocks: 3-5 days

Dating System:

Prep date + Expected life = Use by date

Example:
Marinated chicken
Prep date: 1/20
Expected life: 3 days
Use by: 1/23

Label: "Marinated Chicken - Prep 1/20 - Use by 1/23"

Best Practices:

• Label prep date AND use-by date
• Store in clear containers
• Single layer storage
• Daily review of all prep
• Use in specials before expiration

Advanced FIFO Systems

Color-Coding by Week

Four-Color System:

Week 1: Blue labels
Week 2: Yellow labels
Week 3: Red labels
Week 4: Green labels
Week 5: Back to blue (new month)

Example January:
1/1-1/7: Blue
1/8-1/14: Yellow
1/15-1/21: Red
1/22-1/28: Green
1/29-2/4: Blue (new cycle)

Benefits:

• Quick visual identification
• No reading required
• Obvious what's oldest
• Works across language barriers
• Easy to audit

Limitations:

• Doesn't show exact date
• Need written date too for specific items
• 4-color system limits to weekly precision

FIFO Compliance Audit Checklist

Weekly Audit (15 minutes):

Walk-in Cooler:
☐ All items dated
☐ Oldest items in front/accessible
☐ Newest items in back/harder access
☐ No expired items present
☐ Dates legible and accurate

Freezer:
☐ All items dated
☐ Organized by category and date
☐ No items > 3 months (check freezer burn)
☐ Proper wrapping/containers

Dry Storage:
☐ Items dated on receipt
☐ Rotation visible
☐ No expired items
☐ No pest evidence

Prep Area:
☐ All prep dated with use-by
☐ Oldest prep used first
☐ Nothing past use-by date
☐ Clean and organized

Score: ___/20 items
Target: 18+ (90%+)

Technology-Enabled FIFO

Barcode Systems:

• Scan on receiving
• Auto-date in system
• Scan on use (depletes oldest first)
• Alert for near-expiration
• Cost: $2,000-5,000 setup

RFID Tags:

• Automated tracking
• No scanning required
• Real-time location
• Very expensive
• Not practical for most restaurants

Inventory Software:

• Digital date tracking
• Expiration alerts
• Automatic FIFO in recipe depletion
• Usage reports
• Cost: $50-400/month

Recommended: Start manual, upgrade to software if/when beneficial

Compare inventory software options

Common FIFO Mistakes and Solutions

Mistake #1: Not Dating Items

The Problem:
Items not dated upon receiving, impossible to know what's oldest.

The Impact:

• Pure guesswork on rotation
• Expired items not identified
• Increased spoilage
• Food safety risks

The Solution:

• Make dating non-negotiable
• Provide easy tools (dots, tape, markers)
• Include in receiving checklist
• Audit and enforce
• Refuse to put away undated items

Mistake #2: Dating But Not Rotating

The Problem:
Items are dated but new items placed in front anyway.

Why It Happens:

• Easier/faster to put in front
• Don't want to move existing items
• Storage not designed for FIFO
• Lack of training or care

The Solution:

• Reorganize storage for FIFO
• Train on importance
• Spot checks and feedback
• Make it easier to do right than wrong
• Celebrate good FIFO practices

Mistake #3: Ignoring Dates During Prep

The Problem:
Kitchen staff grabs whatever is convenient, not checking dates.

Why It Happens:

• Busy/rushed during prep or service
• Don't understand importance
• Newest items more accessible
• No accountability

The Solution:

• Storage organization (oldest most accessible)
• Visual systems (color coding)
• Prep lists specify which batch to use
• Expeditor/chef enforces
• Regular reminders

Mistake #4: Inconsistent Systems

The Problem:
Different staff use different dating formats or methods.

Example:

Person A: 1/20/25
Person B: 01-20
Person C: Jan 20
Person D: Monday (blue dot)
Person E: Nothing

Result: Chaos

The Solution:

• Standardize one system
• Document in training materials
• Post instructions at receiving
• Provide only that system's supplies
• Retrain when violated

Mistake #5: No Plan for Near-Expiration Items

The Problem:
Items approaching expiration not identified or dealt with proactively.

The Impact:

• Discover expiration day-of
• Too late to use properly
• Must waste
• Lost money

The Solution:

• Daily walk-through of storage
• Flag items 1-2 days from expiration
• Plan specials around them
• Discount if appropriate
• Donate if safe but unsellable
• Only waste as absolute last resort

FIFO and Food Safety Regulations

Health Department Requirements

Standard FIFO Requirements:

• Date marking of all TCS foods*
• Use-by dates on prepared foods
• Proper storage order
• Rotation procedures documented

*TCS = Time/Temperature Control for Safety (meat, dairy, cooked foods)

Typical Regulations:

Prepared food date marking:
- Must include preparation date
- Must include use-by date
- Maximum 7 days refrigerated (some jurisdictions)
- Discard after use-by date

Storage order:
- Ready-to-eat foods on top
- Raw meats on bottom
- Separate and covered
- FIFO within each category

HACCP Integration

FIFO as Critical Control Point:

Hazard: Serving spoiled/expired food causing illness

Critical Limit: Use by date not exceeded

Monitoring: Daily checks of all dated items

Corrective Action: Discard expired items, investigate why not used

Verification: Weekly audit of FIFO compliance

Documentation: Date labels, audit checklists, disposal logs

Liability Protection

Why Documentation Matters:

• Prove food safety systems in place
• Defense in case of illness claim
• Insurance requirements
• Regulatory compliance
• Due diligence demonstration

What to Document:

• Receiving logs with dates
• Temperature logs
• Disposal records
• Training records
• Audit results
• Corrective actions taken

Measuring FIFO Success

Key Metrics

1. Spoilage Rate:

Spoilage Rate = (Value of Spoiled Food ÷ Food Purchases) × 100

Target: <2% with good FIFO
Average without FIFO: 6-10%

2. Expired Items Found:

During weekly audit:
Count items past use-by date
Target: 0-2 items per audit
Red flag: >5 items

3. FIFO Compliance Percentage:

During audit:
Items properly dated and rotated ÷ Total items checked × 100

Target: >90%
Acceptable: 80-90%
Needs work: <80%

4. Near-Expiration Items Saved:

Track items 1-2 days from expiration used in specials vs. wasted

Example:
10 items near expiration
8 used in specials successfully
2 wasted (expired)
Save rate: 80%

Target: >75% save rate

Before and After Analysis

Case Study Metrics:

Restaurant: 120-seat casual dining
Timeline: 6 months

BEFORE Proper FIFO:
- Spoilage rate: 8.2%
- Spoilage cost: $3,280/month
- Health violations: 2 (dating and rotation)
- Customer complaints: 5 (food quality/freshness)
- Staff frustration: High (disorganized)

AFTER Proper FIFO:
- Spoilage rate: 2.4%
- Spoilage cost: $960/month
- Health violations: 0
- Customer complaints: 0 (related to freshness)
- Staff satisfaction: Improved

Monthly savings: $2,320
Annual savings: $27,840
Implementation cost: $500 (labels, training, organization)
ROI: 5,468% first year

Plus intangible benefits:
- Better food quality
- Safer operations
- Happier customers
- More efficient kitchen

Calculate your spoilage savings

FIFO Training Program

Week 1: Introduction

Day 1: Why FIFO Matters (30 min)

• Food safety basics
• Financial impact of spoilage
• Quality and consistency
• Regulatory requirements
• Q&A

Day 2: How Our System Works (45 min)

• Dating method (dots/labels)
• Storage organization tour
• Receiving procedure
• Hands-on practice
• Quiz

Week 2: Practice and Coaching

Daily:

• Supervised receiving
• Guided storage
• Feedback on dating
• Correction of errors
• Positive reinforcement

Week 3: Independence and Audit

Day 1-5: Independent Operation

• Staff performs FIFO independently
• Manager observes
• Minimal intervention
• Track compliance

Day 6: Audit and Review

• Formal FIFO audit
• Review results with team
• Identify areas for improvement
• Celebrate successes

Ongoing: Monthly Refreshers

Standing Agenda Item:

• Review spoilage numbers
• Share FIFO successes
• Address any compliance issues
• Recognize good practices
• Continuous improvement

Quick Start Guide

Day 1: Assessment

Morning:

• Walk through all storage areas
• Photograph current state
• Count undated items
• Estimate spoilage

Afternoon:

• Choose dating system
• Order supplies
• Create receiving checklist
• Plan storage reorganization

Day 2-3: Setup

Tasks:

• Reorganize walk-in for FIFO
• Reorganize freezer
• Reorganize dry storage
• Label zones
• Create flow

Day 4: Staff Training

Morning:

• Train all staff (2 hours)
• Explain system
• Hands-on practice
• Q&A

Afternoon:

• Date all current inventory
• Rotate to FIFO order
• Document before state

Day 5-7: Launch Week

Daily:

• Use new system
• Extra supervision
• Answer questions
• Make adjustments
• Document progress

Week 2+: Optimization

Weekly:

• Audit compliance
• Measure spoilage
• Get feedback
• Refine system
• Celebrate wins

Conclusion

FIFO is not optional for professional restaurant operations. It's a fundamental requirement for food safety, quality, profitability, and regulatory compliance. While it requires initial effort to implement, proper FIFO systems become second nature and deliver substantial returns.

Key takeaways:

1. Date everything immediately - Make it non-negotiable
2. Store new behind old - Organize for easy FIFO
3. Use oldest first - Check dates, no exceptions
4. Train and enforce - Make it part of culture
5. Measure and improve - Track metrics, adjust system

Most restaurants implementing proper FIFO reduce spoilage by 40-60%, saving $15,000-$30,000 annually for mid-sized operations. Beyond financial benefits, FIFO ensures safer food, better quality, and more consistent operations.

Start implementing FIFO this week using this guide. The initial investment in supplies, training, and organization pays for itself in weeks, and the benefits compound over time.

Additional Resources

• Reduce food costs guide - Comprehensive cost reduction strategies
• Waste tracking guide - Measure and minimize all waste
• Food cost calculator - Calculate your spoilage cost
• Inventory count sheets - Free templates
• Toast inventory management - Technology solution
• WISK inventory system - AI-powered tracking

Implement FIFO today and protect your food quality, customers, and profitability.