Food Cost Control for Restaurants

The subject of restaurant cost control contains volumes of work relating to the food service cost control trifecta: food, labor and alcohol costs. While there are invaluable cost control systems and theories presented in these works, operators often find it difficult to implement such procedures, as they need to balance their time between running the daily operation and managing cost control systems and procedures—of course, these two things are certainly not mutually exclusive. Key Item Management, however, is a relatively simple method of effectively managing food cost without a tremendous time investment. While it is not recommended that an operator limit their food cost control efforts to only Key Item Management, it is probably the best place to begin and also the most important food cost control system to stay current with. Presented here are the basics of Key Item Analysis and Key Item Management.

Step One: Identify your key items. The best way to achieve this is by requesting a descending purchase recap from your distributor(s). This report will rank all purchases during a specified time period in descending order based upon the total dollar amount spent for each item. It is recommend that operators focus on no more than the top ten items identified on this report for the purposes of a Key Item Analysis during the first attempt at this process. Focusing on only the top ten items makes the task manageable, while still having a significant impact on food cost. Think of this methodology as the food cost 80/20 rule.

Step Two: Examine Key Item purchasing specifications. While product specifications are an inherent part of the process described in step three, they are also so critical that they deserve specific analysis and attention. When examining key items, operators need to question the factors that have influenced the current purchasing specifications. Manufacturer and brand, quality specifications, trade and federal grades, fat content, unit size, case size, production region, receiving condition and many more specifications all have cost implications on a given product. In general, the more lenient the specifications are for a particular product, the cheaper the landed cost will be for an operation. However, the less strict an operator is with specifications, the less consistent the product will also be. Therefore, the benefits of reducing a key item cost in this manner need to be weighed against the potential effect on product quality and consistency. That being said, an operator should examine all available specifications for a key item and determine which are important for the intended use. Once these specifications are determined, operators will be more effective in managing key item product costs, as described in the next paragraph. Often times, operators will realize that certain specifications have been assumed by the distributor. 

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(0) Comments • Permalink • 09 19 2008

• Joe Dunbar
• Reprinted with permission by Food Cost Solutions
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