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Friday, May 05, 2006

Legacy Food Cost

Have you checked your freezers lately? What's in our collective freezer space? Many people create short term profits by freezing mistakes.

Imagine paying for an air shipment from Hawaii for a large purchase of freshly caught fish. Next, the fish hit the menu on advertised specials. Despite big crowds, you have sold only half of the shipment and the fish may spoil. What happens to the rest of the fish? Actually, I found them with an owner I was helping during an unannounced inventory. They were frozen solid. The profit was frozen too for another month.

Outside behind the same restaurant was a much larger freezer. It was loaded with 20 other mistakes. Freezer burned crab legs, ground beef in a box marked tenderloin, a variety of other "fresh" fish and some year-old lamb racks all scattered throughout the big box.

The unusable food in the outside freezer was valued at $10,000. This legacy food cost was pushed into the future at a seasonal resort restaurant. The chef's strategy was effective in spreading mediocre results over a long period of time.

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