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Saturday, August 30, 2008

Menu Driven Specials

When menu specials compliment the base menu offerings, there is an opportunity to significantly drop the level of waste and spoilage. The reasons are many for this phenomenon. Cycle menus are always developed with the future in mind. The second choices are often based on the previous day's primary choice.

The ability to utilize the same protein items used every day in your base menu in specials is a great advantage. Your wait staff may promote menu offerings which help minimize waste. Small forecasting errors won't create spoilage since the base menu uses the same ingredients. You'll focus your purchases on fewer protein items. Its possible to save on these key items as the purchase volume increases.

Contrast this style of menu specials with the policy of presenting new and innovative menu items on your specials board. This strategy implies a wider range of protein items. I have observed operations where the chef offered 5 to 7 completely different specials each night. Imagine trying to forecast and manage usage on 35 different protein items (in addition to all items required by your base menu) when the number of covers is uncertain. In addition, you need to forecast your guest's preference each evening to utilize all the expensive center of the plate items.

Not every operation has the ability to make this transition. If you use a cycle menu as a base, your offerings need to change each day to allow long term guests to enjoy a diverse selection. As mentioned previously, talented cycle menu writers take great interest in eliminating waste through careful menu design. I recommend following this style of menu design whenever you need to provide more protein options than called by your base menu.

Tuesday, August 19, 2008

Food Cost Control Tour Guide

I'd like to welcome newcomers to the blog. The posts are normally in chronolgical order. This tour guide is organized by subject area.


Month End Surprises
Volatile Food Cost Results
Cost Per Serving Vs Servable Pound
100 Cost Percentage
One Dollar Of Food Cost
What Should Our Food Cost Be


Make Room For Special Events
Profitable Special Events
Great Night For Buffet
We Dont Know Our Costs
Profitable Breakfast Buffets
Profile 2 Short Buffet Lines
Buffets And Pos Investment
Buffet Style Events


Effective Food Cost Control
Benefits Of Proper Accounting
Preventing Food Cost Surprises


Changing Your Break Even Point
Do You Know Your Break Even Point
Slow Periods
Seasonal Forecasts
Volume Hides Mistakes
High Degree Of Operating Leverage
Seasonal Operations Profit Analysis_01

Education Inworld

JWU Inworld
Second Life Restaurant
Second Look At Second Life
Hospitality Education In Second Life


Best Of Times
Restaurant Prime Cost Savings
Cold Winter Month
Jit Vs Too Many Deliveries


Hidden Cash
Elusive Cash Flow
Cash Is King


Forecasting 309 Covers Equal Portions
Forecasting 502 Complex Operations
Forecasting 401 Day Profiles
Forecasting 501
Forecasting 101
Enigmatic Prime Rib


Impact Of Coupons On Food Cost
Food Cost Beyond Basic
Food Cost Basics
Food Cost Control Alphabetic Approach
Food Cost Percentage Decomposed

Ideal Usage

Ideal Usage Tricks And Techniques
Ideal Usage Calculation Major Hurdles
Ideal Cost Of Sales Decomposed


Food Inventory Levels
Signs Of Theft
Food Storage Rules
Leave Labor Out Of Inventory
Why Should You Count Key Items Daily
Perpetual Inventory Stratified Random
Inventory Control Decomposed
Legacy Food Cost
Constructive Exaggeration
Profile 1 Messy Walkin Cooler
Requisitions And Transfers Kiss


Prime vs. Choice
Market Conditions And Bid History

Menu Analysis

Managing Check Average
Menu Specials Strategy
Leaner Menu Equals Lower Food Cost
Coffee And Dessert Contest
Offer Dessert Early In Meal
What Would You Like To Drink
Chronic Waste
Focal Point
Hidden Profit Potential
Phenomenal Sides
More On Take Out And Delivery Issue
Estimating Opportunity In Take Out
Slow Cooked Bbq Requires Careful
Constructing Value Menu
Value Added Meals
Selective Menu Revision
Avoid Slashing Your Menu Prices
Entree Pricing Dollars Vs Percentages
Menu Analysis Decomposed
Utilizing Specials
Dont Destroy Your Stars
Market Price Menu Items


Planning For Unexpected
Planning For Competitive Threats
Passion For Long Term Planning

Portion Control

Major Chain Adopts Smaller Portion
Food Cost And Portion Size
Smaller Portions Or Higher Prices
Safe Portion Control Solutions
More Portion Options
Dealing With Portion Problem
Timely Portion Control
Portion Cut Decision
Yield Analysis
Visual Portion Control


Producer Price Index-Farm Products Way Up
Food Cost Under Uncertainty
Eggs Up 150% In 7 Years
Playing Market
Time For Burgers And Fries
Challenging Time For Pizzerias
Food Prices Are Way Up
Prime Market Follow Up
Prime Market Deal
Number One Cause Revisited
Number One Cause Of High Food Cost
Food Purchasing Decomposed
Purchasing Dollar Vs Food Cost
How Close Should You Get To Your

Quantitative Techniques

Keep It Simple Regression
Slow Day Vs Busy Day
Cost Benefit Analysis
Productivity And Dining Room Turns
Some Things Just Dont Work Well
Common Sense Vs Analytical Techniques
Faster Turns Can Help
Profitable Lines


Do We Count Employee Purchases
Art And Science Of Receiving
Traveling Accounts Payable Clerk
Who Is Fred Hardy

Recipe Costing

Explosive Recipe Models
Recipes And Cost Accounting
Basic Recipe Costing
Navigating Through Recipe Jungle
Recipes Are Wrong
Standard Recipe Costing 101


Time To Listen To Your Guests
Be Pillar Of Community
Restaurants Attracting Stimulus Dollars
Lagniappe Builds Loyalty
Old Fashioned Hospitality
Market Segmentation Service Style
Disbelief And Denial
Lost Opportunity
Pretend You Own Place
Strategic Food Cost Issues
Reuse Paper Clips
Market Segmentation Strategic Focus
Beyond Inertia
Market Segmentation Best Practices
Cultural Evolution
Stay Focused


Flexible Team
Pooling Tips Team Building
Chemistry Of Bid Team
All Star Team
Human Side Of Food Cost Control


Food Service Technolgy

Wine Control

Wine Inventory Turnover
Wine Cellar Investments
Basic Wine Cost Control

Monday, August 18, 2008

Eliminate Chronic Waste

Years back, one of my clients had a policy of brewing coffee fresh every 20 minutes. This simple policy caused an extremely high level of waste in off peak hours. They offered patrons a choice of house brew, hazelnut flavored, and vanilla flavored (regular roast and decaf for all three).

Each afternoon, the coffee sales would slow and the routine began. The staff would habitually dump 6 nearly full pots of coffee down the drain 3 times an hour.

On more than one occasion, I have noticed operators do not adjust production to meet demand. I have seen break rooms at conference centers stocked with the same levels of donuts, bagels, danish and other pastries each day. I asked to see the conference room guest counts and the levels varied from as few as 40 to as high as 300. Most of the day old pastries made it to the staff dining room.

If you observe enough operations over many years, certain patterns emerge. You'll find management strictly controls center of the plate portions in most restaurants. On the flip side, you'll find tremendous waste in condiments, light cream, coffee, fresh baked products, portion packets, etc.

This past weekend, I went out for breakfast at a local spot. My waitress delivered my hot cup of coffee with 6 half & half portion packs. I looked around and noticed I was not singled out for this treatment. You could see many guests loading 3 to 5 of the creamers in their bags.

One of my clients baked rolls fresh all day long. At the restaurants, patrons were served a generous basket of rolls. It was common for patrons to request more rolls and they were always given a second basket. On take-out orders, some locations stuffed a bag with as much as a dozen rolls with each order.

These are all examples of chronic portion control issues which often do not hit the management radar scope. Companies with a passion for precision portion control on meat and seafood items frequently drop the ball on many other high volume items. Eliminating chronic waste and over-portioning will help lower your food cost. Start looking around for obvious issues. Take a second look at your policies.

By matching coffee production to guest counts, managing the number of creamers, rolls, baked goods, etc. and purchasing the proper container size for your needs, you can eliminate most chronic waste.

Monday, August 11, 2008

Food Cost and Break Even Point

In speaking with many local operators (completely unscientific sample), the consensus estimate is a 12% drop in revenue (year over year). This is tough to swallow with the current trends in food cost percentages. Since the cost of many commodities have risen, the impact of the revenue decline has hurt more than usual. We haven't seen the typical drop in ingredient costs which occur in many recessions.

These higher food costs have caused the break even point to grow rapidly. Many operators have seen a shift from 5 to 10% profit to a loss. What can restaurant managers do to lower their break even point in this challenging environment?

This is a time to promote people with line authority and shed corporate staff. A lower fixed overhead expense is the fastest way to lower the break even point. If you currently work in a corporate staff position, try to get closer to the customer. Abandon your desk post and go into the field. Find ways to improve the efficiency at your locations.

I worked for 3 corporations on either the internal audit staff or as the operations auditor. My travel time averaged over 70% for a 10 year period. In each office, there was a staff room and you were considered under-utilized if the Vice President saw you in the room for over 1 week. My final travel intensive job required close to 90% out-of-town work. When it was time to come in from the field, my boss handed me my paychecks and gave me the week off.

The return for my on site work was enormous. I knew the key operations staff and many of the department heads on all of our key projects. We worked together to solve many issues which simply can't be handled by clever report analysis and endless meetings. You'll find messy walkins, open back doors near closing, unopened boxes of seafood and meat in the garbage, employees with substance problems, invisible over-achievers, well-disguised under-achievers and you'll see many other critical issues first hand.

The break even point will go down as you become a variable cost instead of a fixed expense. You'll be part of the gross margin improvement. Lets say your salary is $1,500 per week and you can visit 2 locations per week. If the sales at each location is $50,000, the combined sales figure is $100,000. If you can make a 1.5% impact, you have covered your expenses at the operation level and completely eliminated your cost at the office.

Perhaps you can have a 3% impact. You will probably be promoted back to the headquarters to make sure the people are not in the staff room for more than one week.

Restaurant Data Pros

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