Food Service Technology

Dear Joe Dunbar,
Thank you very much, for updating the latest tech & happenings in Hospitality world.

Regards,
Abraham

You are welcome Abraham. I am currently taking a look at a very improved product in the $1,000 range. Stay tuned for my review.

Food Cost Formula Question

Hello. I just read an article you wrote concerning food cost. I follow the same formula except for one change, I account for discounts. Should I not do this? Could it sway my food or beverage cost to a less accurate percentage? I would really appreciate your insight to this matter. Thank you

Lori
G.M.

Thanks for the question Lori. I prefer to run two calculations - with and without discounts - each period. Consistency is key.

If you run the numbers with and without discounts, you'll achieve several objectives: 1. You can gauge the impact of discounts on results. 2. I'm not sure the sales figure would have been possible if a discount wasn't offered but the fantasy number for sales (i.e. discounts included in sales and treated as a marketing expense) is always popular with the people trying to achieve a food cost close to ideal. 3. A sense of reality is available for folks trying to pay the bills. Netting discounts from your sales shows the true food cost.

If you would not have made the sales target without the discount, I would definitely focus on net sales. Use the second statistic for the production people. They have no control over sales discounts and follow standard portion sizes. They should know how close they came to the standard and they should also be made aware of the impact of discounts.

Flexible Pars

For anyone who is considering the time investment for a comprehensive menu pricing/recipe costing tool (about 120 hours), I believe the payoff potential justifies the investment.

Think of the growing data warehouse on your POS server. You can put this data to use. By tracking trends on covers and guest order profiles, you can accurately predict production requirements. Go beyond simple portion analysis. The recipe model will estimate raw ingredient requirements. The better programs (for example, Food-Trak) will allow you to focus on menu driven raw ingredients.

Once you have a working recipe costing model in place, feed the model POS data. Try to upload a full year with daily files. The software will allow you to create order guides based on prior guest preference, average ingredient usage and a sales estimate. Catered events may be loaded into menu plans to complete the picture.

Rounding out the picture, you can feed the ingredient database par stock information for all shelf stable items. The result is a highly flexible ordering tool. This model will track par levels and adjust order guide quantities to reflect current sales estimates.

Flexible pars could help you eliminate over ordering of perishable items. Depending on your current spoilage and waste levels, your savings will average between 3 and 8% of purchases.