In an article written by Jeremiah McWilliams in Tuesday's Atlanta Journal Constitution, Sara Senatore, an analyst with Sanford C. Bernstein, is quoted regarding the impact of rising corn prices. She said "eventually that's going to trickle into protein..." in a discussion about poor crop conditions and rising demand for corn.
The article also mentions the ability of major chains to dampen the impact of rapid price increases through use of future contracts. However, many of these long term contracts will be expiring in the months ahead.
There is some speculation regarding the expected reaction on the part of major chains. Will they be able to continue to win the futures game? Will they pass along the impact of rising prices to their customers through higher menu prices? Will they simply eat the higher prices they will pay for food?
Most likely, we will experience all three reactions. The industry leaders will continue to sign long term contracts with farmers and food producers. Menu prices will likely increase and companies may need to absorb the market price spikes on their second tier food items.
Companies with tight cost controls will enjoy a major advantage. They will benefit from clear reports which will help them manage the inflationary environment. By measuring the impact on their specific operations, higher protein and grain prices can be managed effectively.
You may find less customer resistance to higher menu prices as the chains react to the higher corn prices. If you successfully raise prices, retain customers and control your food cost, you will gain a huge edge over your competition.
Showing posts with label menumap. Show all posts
Showing posts with label menumap. Show all posts
Thursday, September 30, 2010
Sunday, June 06, 2010
Historic Costs vs. Future Costs
The role of a food cost controller is much different from the menu analyst. Cost control relies entirely on historic data to prepare reports which quantify results and alert management to possible problems or opportunities. On the other hand, the menu analyst needs to look to the future.
When a menu price revision takes place, the prices need to cover the future costs and provide a reasonable profit. Knowledge of commodity trends, economic forecasts, unique events in the coming year and other future oriented information is helpful. The costs used to arrive at theoretical menu item costs should use these expected prices.
The food cost controller studies purchase data to understand the previous period. Use of theoretical food cost data may help the controller discover a usage problem. Usage problems involve units rather than dollars. There is concern regarding missing steaks or shrimp or perhaps an entire case is gone. Purchase costs are important only when there is a big swing in price on one or more high volume items.
Using the same price data for both menu planning and food cost control is a mistake. The portion sizes for all key items should be 100% exact. It is the prices which need to vary. Many operators simply take an educated guess on overall inflation and raise menu prices across the board with the same % increase.
Ideally, the menu analyst benefits from the ongoing work of the food cost controller. Portion control tests, relative price volatility and other information the controller has at their fingertips is valuable to their counterpart. They should work together to discover how the current menu has performed.
In a highly collaborative organization, the cost control team could utilize information from the menu analysis team (e.g. future menu price revision strategy) to create better budgets.
When a menu price revision takes place, the prices need to cover the future costs and provide a reasonable profit. Knowledge of commodity trends, economic forecasts, unique events in the coming year and other future oriented information is helpful. The costs used to arrive at theoretical menu item costs should use these expected prices.
The food cost controller studies purchase data to understand the previous period. Use of theoretical food cost data may help the controller discover a usage problem. Usage problems involve units rather than dollars. There is concern regarding missing steaks or shrimp or perhaps an entire case is gone. Purchase costs are important only when there is a big swing in price on one or more high volume items.
Using the same price data for both menu planning and food cost control is a mistake. The portion sizes for all key items should be 100% exact. It is the prices which need to vary. Many operators simply take an educated guess on overall inflation and raise menu prices across the board with the same % increase.
Ideally, the menu analyst benefits from the ongoing work of the food cost controller. Portion control tests, relative price volatility and other information the controller has at their fingertips is valuable to their counterpart. They should work together to discover how the current menu has performed.
In a highly collaborative organization, the cost control team could utilize information from the menu analysis team (e.g. future menu price revision strategy) to create better budgets.
Thursday, April 01, 2010
Understanding Menu Categories
How many of your dinner guests order a starter? Let's use 50% as a guess. Same question for dessert. We'll use 25% of guests for our dessert guess. Do all of your dinner guests order an entree? Maybe you see 90% due to substituting a starter for the entree course. Do you offer side dishes? How many guests pay extra for a side? We'll use 25% as a guess.
Our customer profile looks something like this table:
Starters 50%
Entrees 90%
Sides 25%
Desserts 25%
We would expect this profile to run a higher food cost than a restaurant with similar prices and menu choices with the following profile:
Starters 25%
Entrees 90%
Sides 25%
Desserts 50%
Restaurants with relatively higher dessert sales tend to run lower ideal food cost percentages. Think of the elaborate pastry displays when you visit a hotel for Sunday Brunch. They want you thinking about dessert before you take your first bite.
Click on the banner above for information about our next Menu Analysis Webinar.
If you specialize in huge portion sizes and high volume, you may not wish to push dessert sales. You'll run a higher food cost %, lower check average and the increase in covers will make up the difference.
If your customer base is in a rush, you can offer a full meal option with smaller portions of all 3 courses for an attractive price. This is common in entertainment areas near theaters and stadiums. You'll effectively change the profile as follows:
Starters 100%
Entrees 100%
Desserts 100%
You could manage the choices for the 3 courses and create a full meal profit which is higher than the current average per cover.
Our customer profile looks something like this table:
Starters 50%
Entrees 90%
Sides 25%
Desserts 25%
We would expect this profile to run a higher food cost than a restaurant with similar prices and menu choices with the following profile:
Starters 25%
Entrees 90%
Sides 25%
Desserts 50%
Restaurants with relatively higher dessert sales tend to run lower ideal food cost percentages. Think of the elaborate pastry displays when you visit a hotel for Sunday Brunch. They want you thinking about dessert before you take your first bite.
Click on the banner above for information about our next Menu Analysis Webinar.
If you specialize in huge portion sizes and high volume, you may not wish to push dessert sales. You'll run a higher food cost %, lower check average and the increase in covers will make up the difference.
If your customer base is in a rush, you can offer a full meal option with smaller portions of all 3 courses for an attractive price. This is common in entertainment areas near theaters and stadiums. You'll effectively change the profile as follows:
Starters 100%
Entrees 100%
Desserts 100%
You could manage the choices for the 3 courses and create a full meal profit which is higher than the current average per cover.
Saturday, March 20, 2010
Accurate Food Costs Enable Menu Analysis
As many readers have noted over the years, we are working to put dollars in the bank. Frequent and consistent percentage analysis will help you identify consistency issues. Beyond percentage analysis, the ideal cost vs. actual cost report highlights specific ingredients ranked by dollars of variance. This analysis involves production and sales data, standard recipes and detailed purchase records.
If you are late to the theoretical cost movement, I urge you to start with the center of the plate ingredients. Get a handle on your high volume, perishable protein items first. Eventually, you will build a more comprehensive standard recipe file. When this day comes, I expect you will find most of the major variances will be center of the plate ingredients. My confidence comes from experience. Perishable, high volume protein items typically make up the major share of your controllable stock.
As you begin building your center of the plate recipe model, focus on entrees. Go ahead and carefully cost the portion for each protein item used in your entrees. If you have time, calculate the cost of your most popular accompaniments for these entrees. Include all complimentary items like rolls, butter, condiments, garnish, salads, etc. These complimentary items account for as much as $3 per dinner cover.
Click on the banner above for information about our next Menu Analysis Webinar.
Use the cost of the center of the plate ingredient along with your cost of complimentary items to find the gross margin for each entree. Simply subtract these costs from the selling price. This gross margin figure is the core of any useful menu analysis.
Menu analysis will take you beyond the food cost % report. You may currently use food cost % to trigger menu item price changes. Menu analysis techniques offer a different point of view. In the absence of menu price changes, purchasing results dominate your gross profit scorecard (as much as 80% of potential gross profit improvement vs. 20% due to tight portion control).
The portion cost data is much more useful when employed in menu analysis.
If you are late to the theoretical cost movement, I urge you to start with the center of the plate ingredients. Get a handle on your high volume, perishable protein items first. Eventually, you will build a more comprehensive standard recipe file. When this day comes, I expect you will find most of the major variances will be center of the plate ingredients. My confidence comes from experience. Perishable, high volume protein items typically make up the major share of your controllable stock.
As you begin building your center of the plate recipe model, focus on entrees. Go ahead and carefully cost the portion for each protein item used in your entrees. If you have time, calculate the cost of your most popular accompaniments for these entrees. Include all complimentary items like rolls, butter, condiments, garnish, salads, etc. These complimentary items account for as much as $3 per dinner cover.
Click on the banner above for information about our next Menu Analysis Webinar.
Use the cost of the center of the plate ingredient along with your cost of complimentary items to find the gross margin for each entree. Simply subtract these costs from the selling price. This gross margin figure is the core of any useful menu analysis.
Menu analysis will take you beyond the food cost % report. You may currently use food cost % to trigger menu item price changes. Menu analysis techniques offer a different point of view. In the absence of menu price changes, purchasing results dominate your gross profit scorecard (as much as 80% of potential gross profit improvement vs. 20% due to tight portion control).
The portion cost data is much more useful when employed in menu analysis.
Friday, February 12, 2010
Menu Price Trends
Histograms profile the number of data points for each class using a standard bar chart format. In constructing a menu map, I like to see the action in terms of popularity and dollars of sales produced. For this analysis, the data points per bin is the starting point. Knowing the number of menu items offered at each price point helps you later in the analysis.
The chart below shows the additional information in columns. Almost 3/4 of sales are produced by menu items priced between $23 and $40.
Should this restaurant eliminate the high priced items which are seldom ordered?
Menu psychology suggests the very high priced items help make the popular item's prices look attractive. Given the current economy, this philosophy may not work as well as in 2008 (source year for the test data). In fact, the operator is currently pushing pasta entrees during mid-week dinner periods.
I'd like to get my hands on the data from last year and make a comparison. In a side by side comparison, I'd expect a shift to lower priced menu items.
Here in the Mid-Atlantic, crab cake dinners are very popular. Although jumbo lump crab meat is pricey, diners expect to pay below $30 for two cakes with a salad and sides. The cakes with minimal filler are recommended in the local press and by word of mouth. This means a competitive dinner house serving Maryland jumbo lump meat needs to use about $10 of crab for the entree.
Last week, I had a conversation with a neighbor who loves to dine out. He and his wife ordered crab cakes at one of the most well known restaurants in the area. The two cake dinners sold for $28.95.
He said the cakes were loaded with bread crumbs. He was quite disappointed due to the treatment he received when he told the manager. He was offered an apology and a free appetizer card. This free card was good for a future meal. They lost a loyal patron and fan.
The chart below shows the additional information in columns. Almost 3/4 of sales are produced by menu items priced between $23 and $40.
Should this restaurant eliminate the high priced items which are seldom ordered?
Menu psychology suggests the very high priced items help make the popular item's prices look attractive. Given the current economy, this philosophy may not work as well as in 2008 (source year for the test data). In fact, the operator is currently pushing pasta entrees during mid-week dinner periods.
I'd like to get my hands on the data from last year and make a comparison. In a side by side comparison, I'd expect a shift to lower priced menu items.
Here in the Mid-Atlantic, crab cake dinners are very popular. Although jumbo lump crab meat is pricey, diners expect to pay below $30 for two cakes with a salad and sides. The cakes with minimal filler are recommended in the local press and by word of mouth. This means a competitive dinner house serving Maryland jumbo lump meat needs to use about $10 of crab for the entree.
Last week, I had a conversation with a neighbor who loves to dine out. He and his wife ordered crab cakes at one of the most well known restaurants in the area. The two cake dinners sold for $28.95.
He said the cakes were loaded with bread crumbs. He was quite disappointed due to the treatment he received when he told the manager. He was offered an apology and a free appetizer card. This free card was good for a future meal. They lost a loyal patron and fan.
Tuesday, February 09, 2010
Three Classic Menu Engineering Approaches
There are 3 classic menu engineering models taught in hotel/restaurant management courses. These models produce much different results when applied to a restaurant with a large number of entree choices.
Many people are familiar with the Star, Plowhorses, Puzzles, and Dogs approach which was developed by Kasavana and Smith. This model uses popularity as a function of gross contribution to split entrees into 4 quadrants. The popularity cutoff is 70% of the average number sold. If you sold 1,000 entrees and had 10 choices, any entree with over 70 sold is either a Star or a Plowhorse. The contribution test uses the mean. If the average contribution per plate is $12, items with higher profit would be labeled as a Star or a Puzzle (depending on popularity).
The second popular method was developed by Miller. He uses a similar popularity test but focuses on food cost % instead of gross margin. His Winners are popular menu items with a low food cost %.
Finally, Pavesic's menu engineering approach uses weighted statistics and looks at profitability as a function of food cost %. There is no 70% applied to his figures since the numbers are weighted by their overall impact on results.
I used the 3 methods to evaluate the menu at a seafood and steak dinner house with 41 entree choices. Comparing the ratings to my initial recommendations to the owner, I find myself most in sync with the Pavesic method. I tend to focus on profitability improvement through tighter food cost control. Someone employing the Pavesic method with reliable recipe cost data would come to many of the same conclusions I reached without running the statistics.
Miller rated a block of popular menu items as Winners when the Kasavana/Smith approach rating was Plowhorse and the Pavesic rating was Standard. Although I like the Miller approach for the current recession, entrees with lower gross margins may not rate a Winner class unless they achieve a low food cost % figure.
[My test data came from work I did in 2008 and the recession was mostly an autumn event in this seashore restaurant. The summer figures were in line with previous boom years and this season dominates the annual sales volume results.]
If I were advising the same operator today, the Miller approach would factor heavily in my recommendations. Since there is a ceiling on menu item prices imposed by the thrifty diners of 2010, restaurants need to rely more heavily on tight food cost control to achieve profits. I would expect to see fewer sales of high ticket menu items with high gross margins and high food cost % figures since the high selling prices which would support this profile have declined in popularity. Fewer diners are trying to impress with their choices. More diners are looking for a lower check at the end of the meal.
Many people are familiar with the Star, Plowhorses, Puzzles, and Dogs approach which was developed by Kasavana and Smith. This model uses popularity as a function of gross contribution to split entrees into 4 quadrants. The popularity cutoff is 70% of the average number sold. If you sold 1,000 entrees and had 10 choices, any entree with over 70 sold is either a Star or a Plowhorse. The contribution test uses the mean. If the average contribution per plate is $12, items with higher profit would be labeled as a Star or a Puzzle (depending on popularity).
The second popular method was developed by Miller. He uses a similar popularity test but focuses on food cost % instead of gross margin. His Winners are popular menu items with a low food cost %.
Finally, Pavesic's menu engineering approach uses weighted statistics and looks at profitability as a function of food cost %. There is no 70% applied to his figures since the numbers are weighted by their overall impact on results.
I used the 3 methods to evaluate the menu at a seafood and steak dinner house with 41 entree choices. Comparing the ratings to my initial recommendations to the owner, I find myself most in sync with the Pavesic method. I tend to focus on profitability improvement through tighter food cost control. Someone employing the Pavesic method with reliable recipe cost data would come to many of the same conclusions I reached without running the statistics.
Miller rated a block of popular menu items as Winners when the Kasavana/Smith approach rating was Plowhorse and the Pavesic rating was Standard. Although I like the Miller approach for the current recession, entrees with lower gross margins may not rate a Winner class unless they achieve a low food cost % figure.
[My test data came from work I did in 2008 and the recession was mostly an autumn event in this seashore restaurant. The summer figures were in line with previous boom years and this season dominates the annual sales volume results.]
If I were advising the same operator today, the Miller approach would factor heavily in my recommendations. Since there is a ceiling on menu item prices imposed by the thrifty diners of 2010, restaurants need to rely more heavily on tight food cost control to achieve profits. I would expect to see fewer sales of high ticket menu items with high gross margins and high food cost % figures since the high selling prices which would support this profile have declined in popularity. Fewer diners are trying to impress with their choices. More diners are looking for a lower check at the end of the meal.
Monday, December 28, 2009
Plowhorses or Deterrents?
Anyone who has used the popular Kasavana/Smith menu engineering model is familiar with the term "Plowhorses". A Plowhorse refers to an entree which is highly popular and has a relatively low contribution. My brother Paul is an Executive Chef at a major resort in California. We love to discuss menu engineering theory and we question the characterization of these under-performers as Plowhorses. Paul prefers to refer to the popular items with low profitability as deterrents.
Dr. Kasavana states: "While plowhorses do not help carry the restaurant's "burden of margin," they surely can be utilized to attract price sensitive buyers. These items present an opportunity to create significant price promotions." Later in the Plowhorse description, he offers a suggestion: "...try to shift demand to other, more profitable items through merchandising programs and menu positioning."
Clearly, the fastest way to higher profits would be to convert sales of these popular under-performers to Stars (highly profitable/high contribution items). Playing around with the unpopular Dogs (unpopular/low contribution) and Puzzles (unpopular/high contribution) won't have the same impact due to the relatively low number of orders sold.
My brother Paul argues these "Plowhorse" menu items deter customers from ordering a more profitable menu item. Often he finds servers promoting these menu choices when asked for help by the guest. He courageously eliminated the most popular menu item at the resort. Whether you call it a Plowhorse or a Deterrent, check averages and gross margins are way up.
We find lots of "price sensitive buyers" in the current environment. If you can't bring yourself to completely eliminate these deterrents, consider one other suggestion from the book: "Relocate plowhorse items to a lower menu profile position. Hiding these items may lead to the sale of higher contribution menu item selections." If I am interpreting this suggestion accurately, our aim is to demote these Plowhorses to Dog status.
Treatment of Dogs is straight forward in the book: "TAKE DOG ITEMS OFF THE MENU!"
If you are struggling with one or more highly popular menu items which simply do not carry their fair share of contribution, you need to take action now. You may feel the need to try to hide these items or combine them with more profitable options. Do you have the confidence to eliminate these items now? You may find more money in your bank account.
Dr. Kasavana states: "While plowhorses do not help carry the restaurant's "burden of margin," they surely can be utilized to attract price sensitive buyers. These items present an opportunity to create significant price promotions." Later in the Plowhorse description, he offers a suggestion: "...try to shift demand to other, more profitable items through merchandising programs and menu positioning."
Clearly, the fastest way to higher profits would be to convert sales of these popular under-performers to Stars (highly profitable/high contribution items). Playing around with the unpopular Dogs (unpopular/low contribution) and Puzzles (unpopular/high contribution) won't have the same impact due to the relatively low number of orders sold.
My brother Paul argues these "Plowhorse" menu items deter customers from ordering a more profitable menu item. Often he finds servers promoting these menu choices when asked for help by the guest. He courageously eliminated the most popular menu item at the resort. Whether you call it a Plowhorse or a Deterrent, check averages and gross margins are way up.
We find lots of "price sensitive buyers" in the current environment. If you can't bring yourself to completely eliminate these deterrents, consider one other suggestion from the book: "Relocate plowhorse items to a lower menu profile position. Hiding these items may lead to the sale of higher contribution menu item selections." If I am interpreting this suggestion accurately, our aim is to demote these Plowhorses to Dog status.
Treatment of Dogs is straight forward in the book: "TAKE DOG ITEMS OFF THE MENU!"
If you are struggling with one or more highly popular menu items which simply do not carry their fair share of contribution, you need to take action now. You may feel the need to try to hide these items or combine them with more profitable options. Do you have the confidence to eliminate these items now? You may find more money in your bank account.
Sunday, November 01, 2009
Menu Planning and Strategy
Our industry is experiencing a shift in the demand curve. Restaurant goers are downsizing from upscale to casual, casual to fast casual and fast casual to QSR and take-out. The regular patrons at many family owned restaurants are watching their checks and eliminating an appetizer or dessert course. If you have a lower priced entree on your menu, you may find the popularity on the increase.
Most of the menu analysis and menu engineering models were built during a time of solid annual growth for our industry. These models focus on high gross margin entrees loved by patrons. Blindly using these models to adjust menu prices may hurt your bottom line. These models are designed to eliminate low gross margin menu items if the popularity is low.
Rather than completely eliminating these dogs, you may want to repackage these items. Take them off your printed menu and try them as budget specials. You may find a winner or two.
The stars need to get your full attention. Are your guests still selecting the reliable cash cows? You may see the high gross margin items slipping in popularity. Chef Mario Batali (one of my favorite chefs) was quoted in a USA Today article: "There's less caviar, foie gras and truffles, but they're still there. They're just not on nine courses. They're on one course." This same article highlights other chefs who have decided to offer more price points for their patrons.
Expense accounts are being scrutinized at every major S&P 500 company. The current earnings season on Wall Street shows companies are slashing costs.
The wine lists are offering guests fewer trophy bottles as demand for the $200 plus bottle of wine has collapsed. Many restaurants religiously ordered their annual commitment from the same boutique vineyards without regard to consumption. Now, these wine cellars are loaded with these high cost bottles. Many have decided to end this practice and they are moving these bottles by the glass.
Are there ways to produce the same gross margins in this new era? Yes. You need more turns on busy nights. Offer early bird specials, table d'hote options, and popular add-ons for your popular menu items. Promote seasonal ingredients which typically offer lower cost of sales.
Customer knowledge (including dining out budgets) leads to effective menu planning efforts. Rather than completely revamping your current menu, you may find a few strategic revisions will help you meet your targets.
Most of the menu analysis and menu engineering models were built during a time of solid annual growth for our industry. These models focus on high gross margin entrees loved by patrons. Blindly using these models to adjust menu prices may hurt your bottom line. These models are designed to eliminate low gross margin menu items if the popularity is low.
Rather than completely eliminating these dogs, you may want to repackage these items. Take them off your printed menu and try them as budget specials. You may find a winner or two.
The stars need to get your full attention. Are your guests still selecting the reliable cash cows? You may see the high gross margin items slipping in popularity. Chef Mario Batali (one of my favorite chefs) was quoted in a USA Today article: "There's less caviar, foie gras and truffles, but they're still there. They're just not on nine courses. They're on one course." This same article highlights other chefs who have decided to offer more price points for their patrons.
Expense accounts are being scrutinized at every major S&P 500 company. The current earnings season on Wall Street shows companies are slashing costs.
The wine lists are offering guests fewer trophy bottles as demand for the $200 plus bottle of wine has collapsed. Many restaurants religiously ordered their annual commitment from the same boutique vineyards without regard to consumption. Now, these wine cellars are loaded with these high cost bottles. Many have decided to end this practice and they are moving these bottles by the glass.
Are there ways to produce the same gross margins in this new era? Yes. You need more turns on busy nights. Offer early bird specials, table d'hote options, and popular add-ons for your popular menu items. Promote seasonal ingredients which typically offer lower cost of sales.
Customer knowledge (including dining out budgets) leads to effective menu planning efforts. Rather than completely revamping your current menu, you may find a few strategic revisions will help you meet your targets.
Monday, October 19, 2009
Packed Restaurants
I'm just back from a long road trip through coastal North Carolina and South Carolina. Since it was past the peak season, hotel rooms were dirt cheap and I never hit one traffic jam. All you can eat BBQ places were enjoying full parking lots. At lunch time, these spots offer whole hog BBQ with fried chicken and loads of sides and desserts for $7.50. Some throw the ice tea in and others charge ($1.79 for unlimited tea). This has a terrific impact on food cost results.
I know there are lots of people who want to debate gross profit vs. food cost percentage. With regard to the tea included issue, it doesn't matter what camp you are in since the impact is huge. At one place, I paid $10 and another $8 for basically the same style food and service. I'm guessing the $10 (includes tax but no tip) spot is on target for a 33% cost of sales since they charge for the tea. If the same costs were incurred by the operation with no charge for tea, their cost % would be over 40%.
Both parking lots were jammed.
Down in Myrtle Beach, the dinner buffets offer all you can eat seafood spreads for $19.99. The calorie count was pretty high at lunch and I skipped the dinner buffets. A couple of the owners let me in to observe the buffets. One had a raw bar with lots of shrimp, oysters, crab claws and clams. They also had just about every style shrimp entree and lots of dishes with fin fish and vegetables. Drinks were extra at the places I visited.
The number one issue in Myrtle Beach is the selections. It seems a competitive advantage is held by restaurants offering more selections. One marquis: "Over 170 selections..." Another: "We have 120 selections..." The people who spoke with me said the customers liked to try a little bit of everything and they all like dessert.
Several operations highlighted their bakery offerings. I didn't actually see a baker but there was a prominent bakery at one place. They offered take-out bread, rolls and desserts.
The place with 170 offerings in the off-season scared me a little. They had a light crowd due to the heavy rain and it was a Wednesday night. Still they presented the 170 menu items (some with dairy) in the huge buffet area. Some operators run the cream soup and bisque over several nights bringing the food from cold to hot and back several times.
If I was in the market for a big meal, I probably would have tried the place with the raw bar and a mere 100 menu items. Their lot was about 50% full.
Nobody offered an all you can eat breakfast buffet. I'm sure many of the hotels offer breakfast. The places I visited mostly opened at 5 PM.
I know there are lots of people who want to debate gross profit vs. food cost percentage. With regard to the tea included issue, it doesn't matter what camp you are in since the impact is huge. At one place, I paid $10 and another $8 for basically the same style food and service. I'm guessing the $10 (includes tax but no tip) spot is on target for a 33% cost of sales since they charge for the tea. If the same costs were incurred by the operation with no charge for tea, their cost % would be over 40%.
Both parking lots were jammed.
Down in Myrtle Beach, the dinner buffets offer all you can eat seafood spreads for $19.99. The calorie count was pretty high at lunch and I skipped the dinner buffets. A couple of the owners let me in to observe the buffets. One had a raw bar with lots of shrimp, oysters, crab claws and clams. They also had just about every style shrimp entree and lots of dishes with fin fish and vegetables. Drinks were extra at the places I visited.
The number one issue in Myrtle Beach is the selections. It seems a competitive advantage is held by restaurants offering more selections. One marquis: "Over 170 selections..." Another: "We have 120 selections..." The people who spoke with me said the customers liked to try a little bit of everything and they all like dessert.
Several operations highlighted their bakery offerings. I didn't actually see a baker but there was a prominent bakery at one place. They offered take-out bread, rolls and desserts.
The place with 170 offerings in the off-season scared me a little. They had a light crowd due to the heavy rain and it was a Wednesday night. Still they presented the 170 menu items (some with dairy) in the huge buffet area. Some operators run the cream soup and bisque over several nights bringing the food from cold to hot and back several times.
If I was in the market for a big meal, I probably would have tried the place with the raw bar and a mere 100 menu items. Their lot was about 50% full.
Nobody offered an all you can eat breakfast buffet. I'm sure many of the hotels offer breakfast. The places I visited mostly opened at 5 PM.
Thursday, November 20, 2008
Menu Engineering Basics
Dear Sir
I need To know the classification of items in menu engineering (like cash cow)
but I don't know the others. Please send me the others and the explanations.
Cost Controller (major 4 star hotel)
Thanks for the question!
The four quadrants of the traditional Boston Consulting Group's Growth-Share Matrix are Stars, Cash Cows, Question Marks and Dogs. Our industry's Menu Engineering categories are Stars, Plowhorses, Puzzles and Dogs. Pretty similar names but much different analysis. The menu engineering model is constructed from POS data and standard recipe costs.
Two pieces of information are required to construct the curve. For a given period of time, you need to know the sales count for each entree. In addition, you need to know each item's gross margin (selling price less the standard recipe cost).
I just happen to be in Michigan today. The menu engineering concept was developed at Michigan State University. Dr. Kasavana's model puts the highest weight on menu popularity. Popular menu items will be either Stars or Plowhorses (depending on their gross margin). Unpopular menu items will be either Puzzles or Dogs.
The graph approach to the menu engineering model is excellent for strategic planning exercises. The y-axis shows relative popularity and the x-axis relative profitability. The reason I prefer the graph method for decision support is because there are Plowhorses close to becoming Stars and Puzzles which are Dogs in disguise.
If you find a Plowhorse near the y-axis, a small increase in the selling price or a small decrease in the standard recipe cost could help create the next Star. On the other hand, a Puzzle far below the x-axis is unlikely to achieve popularity even if the selling price is slashed. Your customers are drawn to your restaurant by your Stars and Plowhorses. These items deserve your attention.
There is a tendency to focus on problems. Rather than trying to fix these unpopular items, you should work hard to make more profit with logical accompaniments to your Stars.
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.
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.
Thursday, May 22, 2008
Managing The Check Average
Is this a great time to push your average check higher?
For over a decade, the economy has been buoyed by cheap money and big equity gains. Now the consumer sees tight money markets and capital losses. Company T&E reports are being scrutinized. Tourists are staying closer to home. Regulars are showing up less frequently. Dining rooms have lots of mid-week tables available.
When your place is packed this weekend, do you push the expensive entrees? High check averages may attract the same scrutiny as the $75 gas fill ups. This may be the time for a complimentary cup of coffee or even a slice of pie.
These decisions are rough on the food cost percentage. A complimentary menu item on your busiest night is risky. Will the customer return next week? If the strategic move gets a repeat visit, you win. If they go to your competitor or eat at home next week, you missed some marginal profit with no immediate gain.
Playing well on the margin is more art than science. It helps to measure results. If you want to encourage a repeat peak visit, a complimentary coffee and dessert could be offered to guests who reserve a table for the following week. Policy could be changed to make this semi-permanent. There would be very little wrong if the process repeated itself week after week during this economic downturn.
Would you sacrifice a coffee and dessert sale to get a table filled next week?
Typically, the after dinner drink and dessert course is very profitable. This action will have a significant impact on your check average. You can control the cost of this promotional gambit. Restrict the complimentary items to coffee, tea, and low cost dessert options. Loyal guests are the target in this exercise.
For over a decade, the economy has been buoyed by cheap money and big equity gains. Now the consumer sees tight money markets and capital losses. Company T&E reports are being scrutinized. Tourists are staying closer to home. Regulars are showing up less frequently. Dining rooms have lots of mid-week tables available.
When your place is packed this weekend, do you push the expensive entrees? High check averages may attract the same scrutiny as the $75 gas fill ups. This may be the time for a complimentary cup of coffee or even a slice of pie.
These decisions are rough on the food cost percentage. A complimentary menu item on your busiest night is risky. Will the customer return next week? If the strategic move gets a repeat visit, you win. If they go to your competitor or eat at home next week, you missed some marginal profit with no immediate gain.
Playing well on the margin is more art than science. It helps to measure results. If you want to encourage a repeat peak visit, a complimentary coffee and dessert could be offered to guests who reserve a table for the following week. Policy could be changed to make this semi-permanent. There would be very little wrong if the process repeated itself week after week during this economic downturn.
Would you sacrifice a coffee and dessert sale to get a table filled next week?
Typically, the after dinner drink and dessert course is very profitable. This action will have a significant impact on your check average. You can control the cost of this promotional gambit. Restrict the complimentary items to coffee, tea, and low cost dessert options. Loyal guests are the target in this exercise.
Friday, April 18, 2008
Menu Specials Strategy
The economy continues to make consumers jittery. Discretionary income is in decline in many regions of the country. Restaurants featuring quick and cheap meals are holding their own while formal dinner houses see large drops in check averages and covers.
If a restaurant's sales dropped from $2.5 Million to $2 Million and average ingredients cost increased 15%, their gross profit will plunge - over 25%. Trying to make up the difference in labor is impossible.
As customers watch their check totals closely, it may be tough to sell profitable extras. If your menu concept relies heavily on specials, the answer could be a conspicuous value oriented option each meal period. By changing to menu selections which require lower cost ingredients, you would position yourself to eliminate the impact of higher commodity costs.
There are plenty of moves possible in every segment: Kobe tenderloin to Kobe sirloin; Shrimp Scampi to Linguine with Shrimp; Veal Marsala to Chicken Marsala; Omelets; Steak to Chicken Breast; Chilean Sea Bass to Flounder, etc.
You can close the gross profit gap with smaller portion sizes. Customer friendly, lower check averages result from smaller portion sizes and less costly ingredients. Menu selections should be offered a la carte and as a table d'hote option. The table d'hote choice could include profitable appetizer and dessert choices which can be added for a $5 to $10 bump in price over the a la carte entree price.
Put your free bread basket under a microscope. Lower check averages increase the cost impact of any fixed meal component. Try to keep the perceived value with less costly alternatives. Wheat prices are sky high. On a recent trip to New York, I paid $1.20 for a bagel. You could try baking your own flat breads or foccacia. Shop around for lower cost bread options and mix them into the basket. Every little bit helps.
If a restaurant's sales dropped from $2.5 Million to $2 Million and average ingredients cost increased 15%, their gross profit will plunge - over 25%. Trying to make up the difference in labor is impossible.
As customers watch their check totals closely, it may be tough to sell profitable extras. If your menu concept relies heavily on specials, the answer could be a conspicuous value oriented option each meal period. By changing to menu selections which require lower cost ingredients, you would position yourself to eliminate the impact of higher commodity costs.
There are plenty of moves possible in every segment: Kobe tenderloin to Kobe sirloin; Shrimp Scampi to Linguine with Shrimp; Veal Marsala to Chicken Marsala; Omelets; Steak to Chicken Breast; Chilean Sea Bass to Flounder, etc.
You can close the gross profit gap with smaller portion sizes. Customer friendly, lower check averages result from smaller portion sizes and less costly ingredients. Menu selections should be offered a la carte and as a table d'hote option. The table d'hote choice could include profitable appetizer and dessert choices which can be added for a $5 to $10 bump in price over the a la carte entree price.
Put your free bread basket under a microscope. Lower check averages increase the cost impact of any fixed meal component. Try to keep the perceived value with less costly alternatives. Wheat prices are sky high. On a recent trip to New York, I paid $1.20 for a bagel. You could try baking your own flat breads or foccacia. Shop around for lower cost bread options and mix them into the basket. Every little bit helps.
Monday, March 24, 2008
Leaner Menu Equals Lower Food Cost
Many restaurant operators endlessly search for new menu ideas. This strong focus creates bloated menus which are difficult to manage. Forecasting demand per entree item increases in difficulty as the number of protein choices increases. Rather than searching for new items, you may get better results with a review of current menu choices.
Unpopular menu items with relatively low gross profit potential should be eliminated. Some operators avoid removing an unpopular item because a valued guest always orders the item. Take the item off the menu and get even closer to your valued guest. Stock enough ingredients to produce their signature item on the days they enjoy dining out. You'll improve your overall menu performance and you'll get closer to your valued guest.
Another great tool for improving gross profit is wait staff recommendations. When a guest asks "What do you recommend? I've never been here before." the 2 most popular menu items should be promoted. Selling items preferred by your regulars to newcomers is a simple tool ignored in many restaurants.
Try to restrict the number of daily specials. Unless your specials are merely promotions of base menu items, try to limit specials to 3 per meal period. When I visit a new restaurant and the server goes on for several minutes trying to explain the merits of 6 or 7 specials, I get concerned. Are they trying to blowout yesterday's unpopular specials? Maybe they only prepared 4 items tonight and 3 are leftover.
By promoting popular items and eliminating unpopular items, you'll bank more dollars. New menu ideas will come and go over time. Use these trendy items for busy night specials. Always sell your top items to newcomers.
Unpopular menu items with relatively low gross profit potential should be eliminated. Some operators avoid removing an unpopular item because a valued guest always orders the item. Take the item off the menu and get even closer to your valued guest. Stock enough ingredients to produce their signature item on the days they enjoy dining out. You'll improve your overall menu performance and you'll get closer to your valued guest.
Another great tool for improving gross profit is wait staff recommendations. When a guest asks "What do you recommend? I've never been here before." the 2 most popular menu items should be promoted. Selling items preferred by your regulars to newcomers is a simple tool ignored in many restaurants.
Try to restrict the number of daily specials. Unless your specials are merely promotions of base menu items, try to limit specials to 3 per meal period. When I visit a new restaurant and the server goes on for several minutes trying to explain the merits of 6 or 7 specials, I get concerned. Are they trying to blowout yesterday's unpopular specials? Maybe they only prepared 4 items tonight and 3 are leftover.
By promoting popular items and eliminating unpopular items, you'll bank more dollars. New menu ideas will come and go over time. Use these trendy items for busy night specials. Always sell your top items to newcomers.
Wednesday, January 30, 2008
Coffee and Dessert Contest
Is your dining room traffic slower due to seasonal changes, economic conditions or local competition? Savvy operators should look for higher check averages. If there's no big push for seats, guests should be allowed to linger. A strong dessert menu with premium coffee is the hook. With a special thanks to Starbucks, Americans have become comfortable paying more for upscale coffee brews. Whether you feature the Starbucks brand or another recognized option, diners are more likely to pay a higher price for a well known coffee brand.
During the 90s, there was a trend toward larger dessert portions. A couple would order one of these over-sized plates to share (two spoons). In many operations, the dessert portion sizes became massive and priced too high for people like me - travelling businessmen. In Europe and Quebec, hotels and restaurants offer a table d'hote option. This option features a full meal with appetizer, entree, sides, dessert and coffee. The dessert portions are petite. When I lived in Quebec, most of the table chose the table d'hote option when it was offered.
Smaller portions and fresh fruit options could help convert health conscious customers into dessert lovers.
If your pre-dessert check average is $25 and 10% of guests order a dessert course at an average of $5, think of the profit involved in increasing the percentage to 50%. Your check average would increase from $25.50 to $27.50 (7.8% gain). Let's look at the big picture. A restaurant with sales of $3,000,000 could see an extra $235,000 in sales. Dessert and coffee sales have a highly favorable impact on your food cost percentage.
If you gave the wait person with the highest percentage of dessert course sales a trip to Europe, you'd still be a big winner. Hopefully, they'll return with some great dessert ideas.
During the 90s, there was a trend toward larger dessert portions. A couple would order one of these over-sized plates to share (two spoons). In many operations, the dessert portion sizes became massive and priced too high for people like me - travelling businessmen. In Europe and Quebec, hotels and restaurants offer a table d'hote option. This option features a full meal with appetizer, entree, sides, dessert and coffee. The dessert portions are petite. When I lived in Quebec, most of the table chose the table d'hote option when it was offered.
Smaller portions and fresh fruit options could help convert health conscious customers into dessert lovers.
If your pre-dessert check average is $25 and 10% of guests order a dessert course at an average of $5, think of the profit involved in increasing the percentage to 50%. Your check average would increase from $25.50 to $27.50 (7.8% gain). Let's look at the big picture. A restaurant with sales of $3,000,000 could see an extra $235,000 in sales. Dessert and coffee sales have a highly favorable impact on your food cost percentage.
If you gave the wait person with the highest percentage of dessert course sales a trip to Europe, you'd still be a big winner. Hopefully, they'll return with some great dessert ideas.
Friday, January 18, 2008
Offer Dessert Early in the Meal
Years ago, my brother Paul invited my wife Jackie and I to dinner at the American Bounty Restaurant. The restaurant is run by the students at The Culinary Institute of America. They have a great program where you take a student to dinner and Paul was our student guest. Although the entire dinner was exceptional, I still remember the dessert over a decade later. It was a delicious Berry Cobbler served fresh from the oven.
After our server greeted us he promoted this special dessert option. He said he needed to take the order NOW because the fresh baked cobbler required over 20 minutes in the oven. We ordered the cobbler and the locally produced wine he recommended. He rushed to the kitchen to put in our dessert order while we read the menu.
The entire meal was marvelous. After our entree dishes were cleared, the warm cobbler was served with ice cream. It was excellent and I told many friends about the meal.
Out of curiosity, I recently ran a Google search ("American Bounty" "Culinary Institute" cobbler dessert) to find out if they still offered dessert early in the meal. They still have this policy in place. A restaurant review of American Bounty mentioned the dessert order policy:
This policy is ideal for fine dining operations with long meal times. The guest orders a high profit item with plenty of add on potential immediately after being seated. We all ordered coffee later when the cobbler arrived. In addition, we tried a local dessert wine. The dessert course produced 25% of our total tab. Our check increased by 33% through the dessert course we decided on at the beginning of the meal.
After our server greeted us he promoted this special dessert option. He said he needed to take the order NOW because the fresh baked cobbler required over 20 minutes in the oven. We ordered the cobbler and the locally produced wine he recommended. He rushed to the kitchen to put in our dessert order while we read the menu.
The entire meal was marvelous. After our entree dishes were cleared, the warm cobbler was served with ice cream. It was excellent and I told many friends about the meal.
Out of curiosity, I recently ran a Google search ("American Bounty" "Culinary Institute" cobbler dessert) to find out if they still offered dessert early in the meal. They still have this policy in place. A restaurant review of American Bounty mentioned the dessert order policy:
"Rick's dessert was an apple cobbler with cinnamon ice cream they made him order with his entree because they bake it fresh right then."
This policy is ideal for fine dining operations with long meal times. The guest orders a high profit item with plenty of add on potential immediately after being seated. We all ordered coffee later when the cobbler arrived. In addition, we tried a local dessert wine. The dessert course produced 25% of our total tab. Our check increased by 33% through the dessert course we decided on at the beginning of the meal.
Friday, October 19, 2007
Chronic Waste
Do you feature lots of specials? If specials account for over one third of your volume, you probably experience a significant waste expense. Forecasting is much more complex with menus featuring market-based entree specials.
I find many menus focused on specials create chronic waste. The cost of each bad decision is not immediately recognized most of the time. These mistakes are frozen, rehashed, served on buffets and fed to employees. Some executives praise chefs and kitchen managers for their talent with using leftovers. There is nothing wrong with creatively using a modest amount of over-production. Chronic waste starts when the over-production becomes routine.
Once your operation starts producing too much product due to poor forecasts, you eventually begin to focus more on mistakes than successes. Wait staff are asked to recommend last night's poorly received 5th choice rehashed into tonight's number one choice. Freezer space is used to store items which will become an expense of some future period. At an extreme, I have witnessed companies spending capital resources on greater freezer capacity.
So how do you end this cycle of progressive and chronic waste? The simple way is to develop and feature a solid slate of popular entrees on your base menu. Use specials judiciously to highlight seasonal favorites (preferably using low cost seasonal ingredients).
It's OK to offer some variations on a theme but try to utilize fewer meat and seafood raw ingredients. Waste expands as the variety of protein ingredients increases in your walkin cooler. Operators with limited menus experience very little waste because they offer the same entrees and sandwiches day after day. Study this simplicity before revising your menu strategy.
I find many menus focused on specials create chronic waste. The cost of each bad decision is not immediately recognized most of the time. These mistakes are frozen, rehashed, served on buffets and fed to employees. Some executives praise chefs and kitchen managers for their talent with using leftovers. There is nothing wrong with creatively using a modest amount of over-production. Chronic waste starts when the over-production becomes routine.
Once your operation starts producing too much product due to poor forecasts, you eventually begin to focus more on mistakes than successes. Wait staff are asked to recommend last night's poorly received 5th choice rehashed into tonight's number one choice. Freezer space is used to store items which will become an expense of some future period. At an extreme, I have witnessed companies spending capital resources on greater freezer capacity.
So how do you end this cycle of progressive and chronic waste? The simple way is to develop and feature a solid slate of popular entrees on your base menu. Use specials judiciously to highlight seasonal favorites (preferably using low cost seasonal ingredients).
It's OK to offer some variations on a theme but try to utilize fewer meat and seafood raw ingredients. Waste expands as the variety of protein ingredients increases in your walkin cooler. Operators with limited menus experience very little waste because they offer the same entrees and sandwiches day after day. Study this simplicity before revising your menu strategy.
Wednesday, September 19, 2007
Hidden Profit Potential
One sure way to a lower food cost percentage is a strategic menu price hike. If you need to disguise this activity, find all the top sellers (by count) hidden in your product mix. Look for soft drinks, coffee and tea, side salads, add-ons, substitutes and extras. Check the all modifiers with high counts and little or zero sales.
Too often, operators give away the extra slice of cheese, two strips of bacon, sauteed mushrooms, lettuce leaves and tomato slices. You'll often see a burger menu category with these add-ons listed after the choices. A common charge is 25 or 50 cents. The two strips of bacon can easily cost 25 cents. These low profit items will hurt your food cost percentage.
Take a second look at your burger category. I see many menus with a basic burger for $8.95 and 5 to 6 options priced $1 higher. Sometimes, the menu will list a bleu cheese burger for an extra dollar. There are plenty of excellent quality bleu cheese options in the market. If your spending $5 a pound for the cheese and your portion size is 3 ounces, your add-on cost percentage is 94%. Charge an extra $1 and reduce the portion to 2.5 ounces and the same bleu cheese will run 39%.
Soft drinks, coffee and tea are high volume choices. An extra quarter or half dollar a drink will produce major revenue increases. Often, the menu does not have to be changed at all to increase the prices on these beverage items. Soft drinks can be priced to hit a 15% cost of sales (or lower).
Finally, I see many excellent side salads offered for a modest charge with a sandwich or burger. Often, the price is $1.95 or $2.95 (sometimes 99 cents!). If you charge $1.95 for a 6 ounce salad with dressing, your cost of sales could be over 50%. Cost out your salad mix and add the cost of your most popular dressing and garnish.
Would you offer a customer this choice as a substitute for fries? Some menus offer this substitute.
On the other hand, I once saw a menu with chips, potato salad or cole slaw included with the sandwiches and burgers. The waitress asked: "Fries?" and I said yes. My check had a $1.95 charge labelled Substitute Fries for Slaw. The fries were excellent and over 50% of the customers had taken the bait.
Too often, operators give away the extra slice of cheese, two strips of bacon, sauteed mushrooms, lettuce leaves and tomato slices. You'll often see a burger menu category with these add-ons listed after the choices. A common charge is 25 or 50 cents. The two strips of bacon can easily cost 25 cents. These low profit items will hurt your food cost percentage.
Take a second look at your burger category. I see many menus with a basic burger for $8.95 and 5 to 6 options priced $1 higher. Sometimes, the menu will list a bleu cheese burger for an extra dollar. There are plenty of excellent quality bleu cheese options in the market. If your spending $5 a pound for the cheese and your portion size is 3 ounces, your add-on cost percentage is 94%. Charge an extra $1 and reduce the portion to 2.5 ounces and the same bleu cheese will run 39%.
Soft drinks, coffee and tea are high volume choices. An extra quarter or half dollar a drink will produce major revenue increases. Often, the menu does not have to be changed at all to increase the prices on these beverage items. Soft drinks can be priced to hit a 15% cost of sales (or lower).
Finally, I see many excellent side salads offered for a modest charge with a sandwich or burger. Often, the price is $1.95 or $2.95 (sometimes 99 cents!). If you charge $1.95 for a 6 ounce salad with dressing, your cost of sales could be over 50%. Cost out your salad mix and add the cost of your most popular dressing and garnish.
Would you offer a customer this choice as a substitute for fries? Some menus offer this substitute.
On the other hand, I once saw a menu with chips, potato salad or cole slaw included with the sandwiches and burgers. The waitress asked: "Fries?" and I said yes. My check had a $1.95 charge labelled Substitute Fries for Slaw. The fries were excellent and over 50% of the customers had taken the bait.
Sunday, September 09, 2007
Phenomenal Sides
A quick way to attack food cost issues in almost any operation is through a simple menu upgrade. Rather than attacking entrees, take a hard look at your sides. A few mouth watering sides prepared with less costly ingredients will boost profits every time.
Buffet guests will consume fewer meat and seafood items if they can't resist a great side dish or salad. A la carte operations should charge for the extra special side dish whenever possible. If you offer guests a full meal with their entree choice, offer the top side dish as an upgrade option.
Whenever the guests ask for help ordering from the wait staff, the side should be mentioned along with the entree choices. Perhaps, the dish requires a last minute preparation. Bringing this to the guest's attention can increase orders. Special optional toppings can be used to make an impression.
I believe Durgin Park does a phenomenal job of highlighting mouth watering sides, soups and desserts. Whenever I dine at this historic Boston landmark, everyone in the party raves over the traditional accompaniments. The Corn Bread, Baked Beans, Indian Pudding and Clam Chowder are frequently ordered. Newcomers don't have to guess "what's good?" at Durgin Park. The management offers their recipes for all of these favorites on their website. Whether you enjoy the line upstairs, communal tables, waitresses with an attitude or not, the Yankee favorites are top notch.
The best of the breed barbecue shacks get this concept. Brunswick Stew, hush puppies, slaw, beans, sauces and tea need to be first rate. These dishes will bring customers back and help keep your food cost percentage in line. When we drove to Atlanta last year, my family went 50 miles out of the way to try a BBQ shack recommended by a friend. We still talk about the sides.
Doug's Fish Fry in Upstate New York features fresh fish fried to perfection with three main sides: fries, onion rings and cole slaw. All three are tremendous. This is another place we drive out of our way for whenever we're near the Finger Lakes.
My favorite steak houses all have phenomenal sides. We go for the rillettes on baguette at Les Halles in New York. Sometimes the sauce is the draw. Michael Jordan's Steak House was out of Bearnaise sauce on one trip. We waited until a new batch was made.
America's favorite ethnic restaurants all get it. The Italian style greens in Carmine's New York (huge platter) or Tony Luke's in Philadelphia (optional filling for sandwiches) make the trip worth while. Here in Fairfax, Anita's Bean Dip made with Hatch Valley Chili Verde is a winner. Moby Dick's Kabobs hooks you with the flat bread and yogurt sauce. Char Siu Bao (buns stuffed with barbecue pork filling) are a must when we go for dim sum. Cha Gio (Vietnamese spring rolls) make our visits memorable at our favorite pho shop.
Don't crowd your menu with too many of these fantastic side ideas. You want a few carefully selected winners. Position the items on your menu so they can't be missed and don't keep secrets. The baked beans at Durgin Park are listed as an appetizer. You can get them separately or with your meal.
Buffet guests will consume fewer meat and seafood items if they can't resist a great side dish or salad. A la carte operations should charge for the extra special side dish whenever possible. If you offer guests a full meal with their entree choice, offer the top side dish as an upgrade option.
Whenever the guests ask for help ordering from the wait staff, the side should be mentioned along with the entree choices. Perhaps, the dish requires a last minute preparation. Bringing this to the guest's attention can increase orders. Special optional toppings can be used to make an impression.
I believe Durgin Park does a phenomenal job of highlighting mouth watering sides, soups and desserts. Whenever I dine at this historic Boston landmark, everyone in the party raves over the traditional accompaniments. The Corn Bread, Baked Beans, Indian Pudding and Clam Chowder are frequently ordered. Newcomers don't have to guess "what's good?" at Durgin Park. The management offers their recipes for all of these favorites on their website. Whether you enjoy the line upstairs, communal tables, waitresses with an attitude or not, the Yankee favorites are top notch.
The best of the breed barbecue shacks get this concept. Brunswick Stew, hush puppies, slaw, beans, sauces and tea need to be first rate. These dishes will bring customers back and help keep your food cost percentage in line. When we drove to Atlanta last year, my family went 50 miles out of the way to try a BBQ shack recommended by a friend. We still talk about the sides.
Doug's Fish Fry in Upstate New York features fresh fish fried to perfection with three main sides: fries, onion rings and cole slaw. All three are tremendous. This is another place we drive out of our way for whenever we're near the Finger Lakes.
My favorite steak houses all have phenomenal sides. We go for the rillettes on baguette at Les Halles in New York. Sometimes the sauce is the draw. Michael Jordan's Steak House was out of Bearnaise sauce on one trip. We waited until a new batch was made.
America's favorite ethnic restaurants all get it. The Italian style greens in Carmine's New York (huge platter) or Tony Luke's in Philadelphia (optional filling for sandwiches) make the trip worth while. Here in Fairfax, Anita's Bean Dip made with Hatch Valley Chili Verde is a winner. Moby Dick's Kabobs hooks you with the flat bread and yogurt sauce. Char Siu Bao (buns stuffed with barbecue pork filling) are a must when we go for dim sum. Cha Gio (Vietnamese spring rolls) make our visits memorable at our favorite pho shop.
Don't crowd your menu with too many of these fantastic side ideas. You want a few carefully selected winners. Position the items on your menu so they can't be missed and don't keep secrets. The baked beans at Durgin Park are listed as an appetizer. You can get them separately or with your meal.
Monday, July 30, 2007
Reader Question Regarding Menu Prices
Subject: How to off-set food cost ?
Joe,
I have been interested in your recent comments on inventory levels affecting food cost. After a company would get their purchases and orders in line and start to control their waste at a unit level, at what point would you consider raising the sales prices of their entrees to help compensate for the increase in supply costs? How would you raise prices? Gradual or once a year? Do you have any suggestions?
Thanks,
Chuck
Chuck Pagnotto
Director of Research & Development
Escape Enterprises
Chuck,
I would raise the prices prudently and let your customers know why the increase is needed. The recent run up in oil prices and subsequent move to greater use of ethanol is driving food costs up (8% in last 6 months). Treat this as a "one time" action necessitated by the rapid rise in costs.
It's always good to watch every competitor closely. Just a few months ago, the casual American grill group was in a price war.
As to the normal calendar, I like to increase beverage prices before the summer season and food prices before the year end Christmas season (annually).
Thanks for the question!
Joe
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