The Profitable Butcher - Part 3

With the recent rapid increase in meat prices, operators are discussing the merits of smaller portions.  If they serve an 8 ounce steak, they may be considering a 7.5 ounce portion.  For operations with large portions, the change may be from 16 ounces to 15 ounces.

A change from 8 to 7.5 ounces is a 6.25% reduction.  Everyone is familiar with the coffee cans at the local market.  It is rare to find a one pound can.  Actual weights are often less than one pound.  Sometimes, the size of the can stays the same but the net weight changes.

Would your customers notice their serving is only 93.75% as big as last time?

They may not notice a small change in the serving and they may not care.  If you notice the plates coming from the dining room have uneaten meat or fish, your current portion size may be too large.  Consider a slight drop in size.  The profit potential is significant.

Take a look at the big picture.  If you use 800 pounds per week at $6 per pound, a drop from 8 to 7.5 ounces will save $300 (around $15,000 per year).

This strategy should not be combined with an immediate and significant price increase.  Raising the price and decreasing the portion size doubles the risk of your customers objecting to your strategy. 

[For my loyal readers, the bakery I wrote about when flour prices went through the roof is now under new management.  They made the changes too obvious.

The size of the loaves decreased by 20% for the same price which was perceptible.  They eventually raised the cost per loaf by 15%.  Traffic suffered and they never regained their gross margin.]

The Profitable Butcher - Part 2

Tracking butcher yields is essential if you decide to trim your meat and fish rather than buying portion cuts.  Too often, managers treat the process with a lackadaisical attitude.

"We use the trim in ravioli.  They're free."  "This week's meat was fatty."  "Our butcher doesn't slice the steaks evenly."  "We only pay $6 per pound and the portion control cuts would cost $7."  "Nothing is wasted.  We make all of our stocks from scratch."

The common theme is a lack of clarity.  You can't afford to butcher meat in your operation if you do not closely track the process.  Butcher yields can fluctuate widely.  The differences in yields need to be monitored closely.

I know an operator who carefully tracks each batch.  The starting weight and number of pieces of meat are recorded.  The log contains the cost per pound paid to the meat supplier.  After trimming the meat and slicing the steaks, the butcher records the number of steaks, usable trim and waste.  All costs flow from the starting weight and cost per pound.

This person has a well documented 3-ring binder with each butcher batch sorted by date.  I went through the history and found the overall yield was very close to the restaurant's standard.  More importantly, the yield from batch to batch varied by plus or minus 5%.  This is a 10% spread.

Most operators do not keep these records.  The time to record the batch is minimal and the gain in information is tremendous.  Understanding your standard yield is key to tracking usage and gross profit.

Essential Food Cost Control - All You Can Eat Operations

Dear Sir,

I have recently joined as trainee accountant and been assigned to conduct an audit of a catering project. However, I am clueless on how to arrive at a food cost. Below are the three targets I was provided and while I was looking over internet I found your blogs to be helpful. Can you please provide me any formula or a table that can be of help?

Check cost per man day and whether it has been under control as foreseen in the costing.

Check the menu and cost whether it complies according to the contractual stipulations.

Fix budget for cost centers and follow up in the subsequent months whether the expenditures are under control or not.

Thanks in advance sir.

Regards,
R

The key to success for your operation is in a complete understanding of the cycle menu. Certain weeks will run higher food costs. You will find certain days of the week run high and other days much lower. Once you get a feel for your menu and the patron preferences, your cost data will help you track the actual results vs. the plan.

Cost center analysis is best accomplished through head counts by meal period. Track the number of patrons for each meal period and for each dining area.

A cost per man day is a composite number which depends on the total cost of all food consumed. Slicing and dicing the total cost requires tracking patron attendance and food production. You'll get on top of the formula quickly by tracking details of the patron attendance and the traditional food cost formula:

FOOD COST = BEGINNING INVENTORY + PURCHASES - ENDING INVENTORY

Count data should be gathered by day in the cycle, meal period, dining room and any special event details. Really, there is no specific pattern to follow. Your contract will have details which will guide your selection.

Quantity Food Production Skills

Hi Mr Dunbar,
How are you. Sorry to barge in like this but as a new entrant I need your help. I was a kitchen manager in an a-la-carte restaurant with my staff cooking for small tables.

I recently got a new job as production manager for banquets at [a major sports venue]. The issue here is that there is a sudden transition from line cooking to volume/bulk cooking. My Director of Operations asked me today if I can to make a changeover from line cooking to volume cooking. I am supposed to instruct and lead the cooks in what they do.

No more a la carte but 4 buffets serving 125 to 150 people who come to see the [sports events]. What do you think the issue is? I suddenly can’t cook bulk as a demi-chef since I don't have the experience. Are there any books which cater to this situation? How do you transition from a la carte cooking to bulk cooking, when you have the theory but no knowledge of volume cooking? Any help will be really appreciated.

Chef

Buffet food production in a sports arena requires accurate forecasts. The teams may go on the road and leave you with a walk-in cooler loaded with leftovers. On the other hand, you don't want to stock out on game day.

Unlike an a la carte menu, a buffet deals with a set layout. You know what to produce but you don't know exactly what will be most popular. Once you get some data, the puzzle will be easier to solve.

I prefer a matrix for tracking buffet results. The rows are the buffet components and the columns track the activity. The first column is my forecast and I try to relate the PRODUCTION forecast to the service line. For example, if an item is served in a pan I would forecast the number of pans. The next column SERVED is the number of pans consumed by guests. I finish the simple table with a WASTE column.

You may be able to use some of the food in a future event but be careful. Recently, I was sickened by a meal I had at a football game. The service style was buffet and the food was not uniformly hot. Bringing the temperature of full pans down below the danger zone for bacteria, reheating days later and sending the pan back on a serving line is risky business.

Imagine you are serving 100 people. Take the buffet layout and take each menu item separately. Guess how many ounces each patron will consume. Don't use 12 ounces or 8 ounces as you would in an a la carte operation. Try 3 or 4 ounces for popular items. Use a lower figure for less popular items. This is your forecast base.