Food Cost Control for Restaurants

Step Five: Manage the profit margin for menu items that utilize key items as ingredients. This process is relatively easy, but requires some initial time investment, as well as a bit of ongoing effort. To analyze the profit margin and menu item food cost, recipe cards should be created for each menu item. Based upon the results of the recipe cards, operators should determine if the profit margin and food cost are acceptable according to an operation’s standards. If menu items that utilize your key items have a disadvantageous pricing structure, an operation will always struggle with achieving a desired food cost. It is highly recommended that an operator execute menu engineering for menu items that utilize key items, although simply using and updating recipe cards to keep tabs on shifting profit margins will also have a positive effect. Operators should be certain that recipe cards utilize the edible portion cost of particular items, rather than the “as purchased” cost. Not to beat a dead cow, but operators that serve Prime Rib need to be very careful and vigilant during this step.

Step Six: Complete an ideal usage for your key items. By comparing actual key item usage against ideal usage, operators can identify operational issues effecting key items. Operators can easily determine ideal key item usage by multiplying menu item sales counts located on a product mix report by the standardized key item portion for that specific menu item. This process should be repeated for all menu items that utilize the key item and the sum of these represents the ideal usage for the key item. Comparing this ideal usage with the actual usage that can be determined utilizing purchasing data and inventory extensions will reveal the usage variance for key items. Ideally, the usage variance should be zero. While this is often an impossible goal for all but value-added, convenience items, operators should examine all key item variances that are above established tolerance levels and create a strategy to reduce the variance.

Step Seven: Attack the usage variances! Once the ideal usage comparison previously described has been completed, an operator should begin attacking the identified variances above the tolerance threshold. I have included a few of the common problem areas when trying to attack key item usage variances. First, check current yields against the established acceptable standards. These variances can be due to improper training and production procedures, as well as a change in the key item specifications. For example, flank steak that is cooked off and pre-portioned will have a decreasing yield as the fat content in the flank steak is increased due to improper purchasing or distributor error. Second, operators should increase the awareness of key item variances within the operation. It is not enough to see the variance on paper, but rather habits in the field need to be tweaked and adjusted if this variance is to be corrected. Raising awareness should include staff training on what the proper recipe specs are and how to execute portion control. Raising awareness and communicating concerns often goes a long way to help reduce variances. Third, make sure that there are portion control systems in place to control portioning and that all necessary supplies are in place. It does no good to tell a cook to put 1/2 cup of cheese on a pizza if he does not have a 1/2 cup, or if he refuses to use it. Fourth, execute sensitive inventories. 

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(0) Comments • Permalink • 09 19 2008

• Joe Dunbar
• Reprinted with permission by Food Cost Solutions
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