Food Cost Formula: Agustus 2008

Sabtu, 30 Agustus 2008

Menu Driven Specials

When menu specials compliment the base menu offerings, there is an opportunity to significantly drop the level of waste and spoilage. The reasons are many for this phenomenon. Cycle menus are always developed with the future in mind. The second choices are often based on the previous day's primary choice.

The ability to utilize the same protein items used every day in your base menu in specials is a great advantage. Your wait staff may promote menu offerings which help minimize waste. Small forecasting errors won't create spoilage since the base menu uses the same ingredients. You'll focus your purchases on fewer protein items. Its possible to save on these key items as the purchase volume increases.

Contrast this style of menu specials with the policy of presenting new and innovative menu items on your specials board. This strategy implies a wider range of protein items. I have observed operations where the chef offered 5 to 7 completely different specials each night. Imagine trying to forecast and manage usage on 35 different protein items (in addition to all items required by your base menu) when the number of covers is uncertain. In addition, you need to forecast your guest's preference each evening to utilize all the expensive center of the plate items.

Not every operation has the ability to make this transition. If you use a cycle menu as a base, your offerings need to change each day to allow long term guests to enjoy a diverse selection. As mentioned previously, talented cycle menu writers take great interest in eliminating waste through careful menu design. I recommend following this style of menu design whenever you need to provide more protein options than called by your base menu.

Selasa, 19 Agustus 2008

Food Cost Control Tour Guide

I'd like to welcome newcomers to the blog. The posts are normally in chronolgical order. This tour guide is organized by subject area.

Senin, 18 Agustus 2008

Eliminate Chronic Waste

Years back, one of my clients had a policy of brewing coffee fresh every 20 minutes. This simple policy caused an extremely high level of waste in off peak hours. They offered patrons a choice of house brew, hazelnut flavored, and vanilla flavored (regular roast and decaf for all three).

Each afternoon, the coffee sales would slow and the routine began. The staff would habitually dump 6 nearly full pots of coffee down the drain 3 times an hour.

On more than one occasion, I have noticed operators do not adjust production to meet demand. I have seen break rooms at conference centers stocked with the same levels of donuts, bagels, danish and other pastries each day. I asked to see the conference room guest counts and the levels varied from as few as 40 to as high as 300. Most of the day old pastries made it to the staff dining room.

If you observe enough operations over many years, certain patterns emerge. You'll find management strictly controls center of the plate portions in most restaurants. On the flip side, you'll find tremendous waste in condiments, light cream, coffee, fresh baked products, portion packets, etc.

This past weekend, I went out for breakfast at a local spot. My waitress delivered my hot cup of coffee with 6 half & half portion packs. I looked around and noticed I was not singled out for this treatment. You could see many guests loading 3 to 5 of the creamers in their bags.

One of my clients baked rolls fresh all day long. At the restaurants, patrons were served a generous basket of rolls. It was common for patrons to request more rolls and they were always given a second basket. On take-out orders, some locations stuffed a bag with as much as a dozen rolls with each order.

These are all examples of chronic portion control issues which often do not hit the management radar scope. Companies with a passion for precision portion control on meat and seafood items frequently drop the ball on many other high volume items. Eliminating chronic waste and over-portioning will help lower your food cost. Start looking around for obvious issues. Take a second look at your policies.

By matching coffee production to guest counts, managing the number of creamers, rolls, baked goods, etc. and purchasing the proper container size for your needs, you can eliminate most chronic waste.

Senin, 11 Agustus 2008

Food Cost and Break Even Point

In speaking with many local operators (completely unscientific sample), the consensus estimate is a 12% drop in revenue (year over year). This is tough to swallow with the current trends in food cost percentages. Since the cost of many commodities have risen, the impact of the revenue decline has hurt more than usual. We haven't seen the typical drop in ingredient costs which occur in many recessions.

These higher food costs have caused the break even point to grow rapidly. Many operators have seen a shift from 5 to 10% profit to a loss. What can restaurant managers do to lower their break even point in this challenging environment?

This is a time to promote people with line authority and shed corporate staff. A lower fixed overhead expense is the fastest way to lower the break even point. If you currently work in a corporate staff position, try to get closer to the customer. Abandon your desk post and go into the field. Find ways to improve the efficiency at your locations.

I worked for 3 corporations on either the internal audit staff or as the operations auditor. My travel time averaged over 70% for a 10 year period. In each office, there was a staff room and you were considered under-utilized if the Vice President saw you in the room for over 1 week. My final travel intensive job required close to 90% out-of-town work. When it was time to come in from the field, my boss handed me my paychecks and gave me the week off.

The return for my on site work was enormous. I knew the key operations staff and many of the department heads on all of our key projects. We worked together to solve many issues which simply can't be handled by clever report analysis and endless meetings. You'll find messy walkins, open back doors near closing, unopened boxes of seafood and meat in the garbage, employees with substance problems, invisible over-achievers, well-disguised under-achievers and you'll see many other critical issues first hand.

The break even point will go down as you become a variable cost instead of a fixed expense. You'll be part of the gross margin improvement. Lets say your salary is $1,500 per week and you can visit 2 locations per week. If the sales at each location is $50,000, the combined sales figure is $100,000. If you can make a 1.5% impact, you have covered your expenses at the operation level and completely eliminated your cost at the office.

Perhaps you can have a 3% impact. You will probably be promoted back to the headquarters to make sure the people are not in the staff room for more than one week.

Sabtu, 30 Agustus 2008

Menu Driven Specials

Selasa, 19 Agustus 2008

Food Cost Control Tour Guide

Analysis

Banquets

Control

Cost-Volume-Profit

Education Inworld

Efficiency

Financial

Forecasts

Formula

Ideal Usage

Inventory

Markets

Menu Analysis

Planning

Portion Control

Purchasing

Quantitative Techniques

Receiving

Recipe Costing

Strategy

Teamwork

Technology

Wine Control

Senin, 18 Agustus 2008

Eliminate Chronic Waste

Senin, 11 Agustus 2008

Food Cost and Break Even Point