Food Cost Control Framework Part 1

The essential table required to begin a professional food cost control system is the item list.  This table needs to have the same information you see on the order guides from any national distributor, storage information and vendor information.  In addition, I add several columns to help classify the manner items are purchased including frequency, bid (buy from lowest bidder) and impact.  Impact data can be simplified into the classic A B C model.

The A items are high volume and high cost per pound or volume, the B items are either high volume or cost but not both, and the C items are low volume and cost.  You will see a higher return on your invested time spent controlling A items.

A typical food item would have the fields below for each record:

Name:  BEEF TENDERLOIN PSMO CHC 12-5#UP

Category:  MEAT
Purchase Unit: CASE
Pack/Size:  12/5#UP
Catch Weight: YES
Weight/Case (AVG): 72.0
Cost/Pound: $8.00
Storage Method: REFRIGERATED
Inventory Location:  WALKIN COOLER 1
Frequency: 7
Primary Supplier:  Premium Meat Company
Bid: NO
Alternate Suppliers:
Impact:  A

This records tells us we have a high impact meat item which is ordered by the case and invoiced based on catch weight.  We use a single supplier and we order weekly.  Based on our contract, we now pay $8 per pound.  The tenderloin is stored in the main walkin cooler.

These essential fields help us with the food cost control in several ways.  Beef tenderloin is a high volume item for this restaurant and the $8/pound is a relatively high cost.

This data is sufficient for general information.  We would want to add fields to help out the staff working on ordering the meat.  Demand forecast data is preferable to a par stock level for your A items.  If you expected to serve 2,000 covers and on average 25% of patrons choose beef tenderloin, you need 500 portions of filet mignon for the week ahead.  Depending on the size of the steaks, this case will yield either 72 steaks or 60 steaks.  Our data shows 60% of patrons will choose the smaller steak (72/case) and 40% will choose the larger steak (60/case).  We'll need 3 1/3 cases for the larger steaks and 4 1/6 cases for the smaller steaks.  Since we can't order fractions of a case without a split penalty, we would order 8 cases.

Seasonal operators should not rely on par stock averages to purchase any A items or high volume B items in their inventory.  Accurate forecasts are essential.  Fortunately, the counts in your busy season will be higher and more reliable.

We will develop a data table to recap the information required to analyze A items in the next article - Food Cost Control Framework - Part 2.

10 Ways to Reduce Your Food Cost

I'd like to thank Ron and RoseAnne from ReedExpo for inviting me to speak at the International Restaurant Show in New York City this week. The show was well attended and there was excellent energy. This show is without question THE New York City restaurant show.

We had a great group attend the presentation "10 Ways to Reduce Your Food Cost Without Jeopardizing the Guest Experience" and I want to thank all the attendees.

In the New York tradition, the 10 slides are presented in reverse order, #10, #9, #8, #7, #6, #5, #4, #3, #2, and the Number 1 way to reduce your food cost:

Purchasing and Food Cost Results

Hi Joe,

Your site is the best thing I've ever found on food cost.

I have a question and was hoping you could help me clarify something:

Is my food cost percentage affected by high purchase amounts? I understand that my Food Cost will be high as the value of my inventory will be high, but in terms of % versus sales does it really affect it?

Let's say theoretically, I do over purchase, but none of what is purchased spoils and I don't waste anything except for my usual amount of waste in production. Essentially my food cost should stay near to where it usually is correct?

Thanks,

Steve
Operations Manager

Yes. Just don't make it a habit. Chronic over ordering will certainly impact your food cost results in a highly unfavorable manner.

Your food cost always equals net purchases. The percentage simply relates the net purchases to your sales volume. In fact, most operators do over purchase food. Their #1 concern is running out of stock. Most ordering models have a safety factor built into the formula.

Problems often show up in an indirect way. I have seen employees served crab cakes and roast filet mignon for lunch. Freezers packed with protein items originally purchased fresh and stored in the refrigerator show a high ending inventory total. "Blowout specials" are used to "burn off" perishable items lowering sales and increasing the food cost percentage.

Like any industry, we suffer from a lack of flexibility anytime our ending inventory is inflated. Simply stated, your chef won't be able to take advantage of future opportunities if he becomes concerned with proper use of the current stock. In fact, this focus can really produce catastrophic results when you start to look at rehashing protein items.

I will offer an extreme example. This example happens to be a true, real-life story. A chef gets a call from a seafood salesman in Alaska. The salesman knows the chef enjoys working with fresh caught Alaskan salmon and halibut. The deal involves an order of 25# of fish with free air shipment.

On the delivery day, the UPS driver was sick and his replacement went to the restaurant at the wrong hour (they are a dinner house). The fish made the complete route tour before landing back in the UPS warehouse.

The chef had a person try to locate the driver on his route most of the afternoon. This employee drove over 30 miles in Friday rush hour traffic. Eventually, he went to the warehouse and waited for the fish. At 6 PM, he got his hands on the box and the chef had the salmon at 7 PM. Of course, he was compensated for his time and gas used.

The wait staff began pushing the salmon special later in the dinner shift since the fish needed to be prepped and the manager needed to add this special to the POS system. The special was not included on the original printed specials page. It was immediately added to the chalkboard. Menu pages were reprinted.

They sold 75% of the fish over the weekend despite the problems. By Monday, the remaining salmon was frozen. Did the chef get a good deal?

To his credit, he did not offer a "blowout special" on the slow Monday. Alaskan salmon changes dramatically in taste and texture once you freeze and thaw the fish. The frozen product was eventually used in a fish soup.

The story illustrates some of the issues you need to consider. A small amount over purchased in your low point of the week will be consumed in a special during the busy times. However, a large buy for the busy days will not be consumed on a slow night. When the salmon was eventually used in the soup, there were plenty of local fish species available for a fraction of the price paid for the air shipment.

As you increase the number of protein options on your menu, the likelihood of waste and spoilage does increase. Your assumptions may not jive with reality once the number of protein options hits 10. If you serve a diverse menu, you expect to live with a manageable level of spoilage and waste. When this level becomes too high, the food cost percentage will suffer.

Question on Food Cost Basics

Joe,

My name is Steve and I am starting a new job as a Sous Chef but haven't learned anything about food costs or labor costs and I am afraid to not be able to be a team player on this important situation, that I am final realizing that its part of my job. Can you please teach me how to do all of this or point me in the right direction. I have read your basics on food cost but still I am having trouble understanding it all. Thank you for your time.

Sincerely
Steve

The goal of food purchasing is to place the food in inventory as close to actual production as possible. People who are pros know delivery dates and times, par stock levels, minimum drops, shelf life, and most important, the forecast for the order period.

The food cost formula is really a report card on how well you forecasted for the orders. Most food service companies have several backup suppliers they can use if they experience sales far beyond the forecast. Typically, these last minute purchases are made at cash and carry stores with much higher prices.

The heart of the food cost formula is purchases. You simply divide net purchases by sales. If you forecast your sales carefully, you will make better purchase decisions.

As a learning tool, you may want to take a look at 4 or 5 weeks of invoices to see past purchases. You can discuss spoilage and waste with the chef. Ordering is most important before busy periods. You need to have adequate supply without creating excessive waste. If you keep score, you will rapidly improve.

Optimal Order Size Question

When creating a build to for food orders, what is the exact formula
used? I know it's units used divided by how many days and something to
do with how many deliveries a week.

James

Thanks for the question, James.

Use of the formula described depends on the shelf life of the product. For example, fresh picked raspberries have a rapid spoilage rate when compared to frozen raspberries. The average daily usage/number of deliveries per week model works well for high volume items with a shelf life of 7 days or more.

A twist on this method you may find interesting is to multiply your expected sales (in dollars) by the average consumption per dollar of sales. If you used 1 case for every $1,000 in sales and your sales forecast is for $20,000, you would require 20 cases. Simply check to see what the in stock level is and order the net amount. In our example, we would order 18 cases if we had 2 cases on hand.

Should we order extra in case our sales forecast is off? I think the answer depends on your number of deliveries per week, the day of the order, and your ability to adjust to actual sales volume.

If you are placing a Thursday order for a Friday delivery to handle a busy weekend and you can't get the next delivery until Monday, you would want to provide for a small cushion. On the other hand, a Monday order to replenish your inventory should not be inflated with a safety factor. Your suppliers are most likely in your area all week for any adjustments.

To utilize this method, ask your distributor for a quarterly tracking report. Next you should run a sales recap for the same quarter on your POS system. Divide the number of cases on the tracking report by the total food sales for the quarter. The result is the average usage in terms of sales.

Should You Cherry Pick Spot Prices?

The quotes come in via fax and the internet. You load them into your recipe costing/inventory software. Next, you feed a shopping list to the program and you print the suggested orders. After some minor changes, you send the orders out to as many as 10 vendors. Is this a smart way to buy?

Yesterday, my client and I were on a conference call with a sales rep from Gordon Food Service in Michigan. Our objective is to eliminate waste in the restaurants. I have always recommended weekly inventories but the salesman's advice was twice a week. He wanted us to feed the online ordering system with the inventory counts on Monday and Thursday. Rather than going through the storage areas with a shopping list and jotting down order quantities for under-stocked items, he encouraged my client to take a full inventory.

If you have never been good at inventory control, the journey to tight control absolutely requires a tremendous change in the normal routine.

You may be unwilling to take twice a week inventories for the entire restaurant. Consider phasing in inventories by category starting with protein. In addition, carefully monitor all waste due to spoilage. If you have a sophisticated database loaded with over 100 count values per year, your entire purchasing history and details of your waste, par values will stare you in the face (with seasonal variations).

More importantly, we want to eliminate waste. Ordering too much of a perishable item with a high cost per pound and a major change in taste and texture profile when frozen has to be avoided. As you begin to order the appropriate quantities, your supplier can work with you on the proper pack/size for each item in the non-perishable goods section. They can help you find labor saving alternatives.

I believe it is highly advisable to stay aware of market trends. Whether I would go the cherry picking route in today's marketplace is the question. It's typically a mistake.

As far back as 1981, Tom Noble from Denver (eventually sold his business to Sysco) sent his rep out to our construction site in Parachute Creek. We setup a ordering guide for our comprehensive 4-week cycle menu. Scott, our Noble rep, went through the stockrooms, walk-ins and outside freezer. He designed a storage sequence for each room. We bought almost everything from this company. Our contract allowed us quarterly audit access and we had a Denver office. Once in a great while we would complain about meat yields. Overall, we enjoyed a very low cost per man per day and waste was non-existent.

Until you work with a competent supplier armed with an excellent database, it's tough to see the way to single source. Go ahead and take the plunge. The potential is huge.

How Much Do We Need To Charge?

I received an email from a company with a large buyer of their tamales. The buyer pays $1.50 and they want to price the tamales to have a 30% cost of sales. Currently, they charge less than $3.00 for the tamales.

At $3.00, the cost of sales is 50%. If they could sell the $1.50 tamales for $5.00, they would hit their target. This is a 67% increase in selling price.

The tamale manufacturer could re-engineer the tamale at a $1.20 price point. If the seller raised the price to $3.60, they would be close to the target 30%. Do you think the customers would stand for 20% decrease in portion size and a 20% price increase?

The tamale manufacturer could offer a volume incentive. If the buyer hits a volume target, they could offer a discount. This discount could be paid monthly or quarterly. They could continue selling the tamales at $3.00. If the manufacturer produces the smaller portion for $1.20, they would have a 40% cost of sales.

Let's use a 20 cents incentive as an example. The buyer would achieve a 33% cost of sales if they hit the volume target ($1.20 minus $0.20).

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.


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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.

Flexible Pars

For anyone who is considering the time investment for a comprehensive menu pricing/recipe costing tool (about 120 hours), I believe the payoff potential justifies the investment.

Think of the growing data warehouse on your POS server. You can put this data to use. By tracking trends on covers and guest order profiles, you can accurately predict production requirements. Go beyond simple portion analysis. The recipe model will estimate raw ingredient requirements. The better programs (for example, Food-Trak) will allow you to focus on menu driven raw ingredients.

Once you have a working recipe costing model in place, feed the model POS data. Try to upload a full year with daily files. The software will allow you to create order guides based on prior guest preference, average ingredient usage and a sales estimate. Catered events may be loaded into menu plans to complete the picture.

Rounding out the picture, you can feed the ingredient database par stock information for all shelf stable items. The result is a highly flexible ordering tool. This model will track par levels and adjust order guide quantities to reflect current sales estimates.

Flexible pars could help you eliminate over ordering of perishable items. Depending on your current spoilage and waste levels, your savings will average between 3 and 8% of purchases.

Food Cost Techniques - Orders

The number one component in your weekly or monthly food cost percentage calculation is food purchases. This figure is modified by the net inventory change before you divide by sales. Many operators tell me they don't count inventory any more. I always ask them how they order food.

In every case, food service operators go to their storage locations when determining the order requirements. This activity is an inventory count. Although there may not be a formal report or a careful valuation, the person who checked the stock room, walkin cooler or freezer performed a count. In most cases, these counts are discarded once the food order has been completed.

Do you organize your food orders by category (e.g. produce, meat, seafood, dairy, etc.), by vendor, or by storage area (e.g. freezer, cooler, dry storage, etc.)? Do you have a day of the week organization? Perhaps you order produce twice a week on Monday and Thursday. You might replenish groceries once a week for high volume items and monthly for other items. Maybe you have become aware of a special on a shelf stable item. On the other hand, prices for some high volume items may be sky high this week.

If you phone in your orders, you may be on the phone with someone trying to blowout an over stocked item. Do you change your order on the spot to "take advantage" of this limited time offer? If you answer yes, how do you determine the impact on other items you need to order? The person on the other end of the phone line has taken over your order process.

Most operators have a decent price awareness. Some are acutely aware of any market shifts in their top volume items. These same operators may have a vague idea what the market conditions are on their low volume items. Who has the time to track all this activity? Time is money.

Every operation spends a significant amount of time each week ordering, receiving and storing food items. Much of the information used in these decisions is discarded once the order has been submitted. Spot counts, market prices, last minute deals, emergency orders, short shipments, poor quality rejections, and every day customer preference shifts are processed and the impact is seen in your invoices.

Do you have a feedback mechanism built into your control system to highlight ordering issues? If you don't have any feedback other than the goods arrived, you are missing another opportunity to improve your ordering process.

Five simple recommendations:
1. Develop order guides to fit your personal environment. Document the counts, par levels, and other notes. The notes should have details on weather conditions, seasonal peaks, etc.
2. Clearly mark your orders with any changes made during the phone call with the supplier. Use a different color ink to highlight these changes.
3. Organize the price quotes faxed each week on bid comparison sheets.
4. Document all specification issues and ask for credits when the delivery does not match your request.
5. Summarize this activity each week and use the information to improve the process.

Once you order food, the economic impact of the order is reflected in your food cost percentage. It is impossible for something you never ordered to spoil, be improperly portioned, stolen, or over produced. Spend less time in the long run by investing in organizing your ordering process today.

Producer Price Index - Farm Products Way Up

The Bureau of Labor Statistics has excellent inflation data on their website. The Commodities data includes index data for Farm Products. The index began to take a second big move up in December and May 2008 reversed the move down in April. With the Mississippi River flood plains under water, food prices will most likely remain high this summer.

Food Cost Under Uncertainty

With the current flooding in Iowa, America's major grain crops will likely have a lower yield in 2008. There are many factors in determining your food cost percentage. Commodity markets play a major roll in your cost of goods sold. Let's take a look at last week's market activity. The information below is provided by Foodservice.Com where you will find excellent market price data. Corn Oil has more than doubled in price since last year.

Eggs Up 150% in 7 Years

Today's Washington Post Food Section has an article "It's Waste Not, Want Less for Some Chefs" with comments from local chefs. Gillian Clark, at Colorado Kitchen, told Tom Sietsema her cost for a case of eggs has gone from $13 to $32.50 in 7 years.


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Playing The Market

Do you try to time the market for your top center of the plate items?

Tolerance for using frozen protein items may be the key to your response. I have seen operators with huge outdoor freezers receive a truckload of meat shipped directly from Chicago. Prior to placing the order, they studied the Urner Barry Yellow Sheets and pulled the trigger at a favorable time.

This article is written for the other type of market play. Operators may receive calls from their meat and seafood suppliers in up markets asking if they want to lock in a high price before it goes higher. Some take the bait and lock a bad price for their busiest season. No freezer needed in this scenario. You simply agree to pay a high price for your key ingredients during your busiest period of the year.

Commodity markets climb when demand outstrips supply. Those who follow the futures markets look at long term trends like herd size and seasonal weather predictions. Recent gains in corn prices have made items sensitive to grain prices quite high.

These markets are typically difficult to trade for new entrants. Unless you have excellent information and see a major market anomaly, I would not recommend placing a futures hedge bet.

Let's look at some of the trends in the grains markets. I'm using information from Daily Futures including these charts:

Corn


Soybeans


Wheat


Both Corn and Soybeans are up strongly since October and the Wheat curve is parabolic. Will the markets for these grains redouble? Probably not. With the summer grilling season coming soon, it may not be a terrible time to stock your freezers. Certain beef items and grades are still a deal. Upward price pressure is still evident.


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Time For Burgers and Fries

Current market data for February 22, 2008 shows a better environment for restaurants with menus dominated by burgers and fries. Using a pub sized portion for the burger (8 ounces) and the french fries (8 ounces), these operators have picked up 3 cents since last year.

The price of soybean shortening has doubled. This unfavorable trend is offset by stable prices for frozen potatoes and ketchup and a decline in the ground beef price.



Market Data from Foodservice.com (www.foodservice.com) - An Online Community for Foodservice Operators was used in creating the chart.

Operators looking for greener grass in the other vegetable oil markets won't find much relief. Canola oil and corn oil are both way up since February 2007. I'm using Wenzel Menu Maker's oil-to-fries ratio of 8 pounds oil per 100 pounds of potatoes. The Wenzel model uses fresh potatoes. With today's innovative oil solutions, some operators may have an additional edge.


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Challenging Time For Pizzerias

With more people utilizing take-out dining options, pizza delivery is growing strongly in my neighborhood. Today is Friday and I expect plenty of delivery cars on the streets near my home tonight. The pizza segment has a long tradition of take-out and delivery service.

I worked in a pizzeria during my college years and we served lots of pizzas to go each night. The delivery option was not available for our customers. With a growing number of pizza lovers requesting delivery, the current economy offers pizza chains plenty of challenges:

Gas prices are up due to a weak dollar and soaring demand for foreign oil;
Mozzarella cheese prices have seen dramatic increases;
Domestic vegetable oil prices have risen and imported olive oil is up;
Canned tomato products have experienced modest increases and flour is trending higher.

Taking a closer look at the mozzarella cheese market, we have seen major shifts in the price curve (see chart below):



Market Data from Foodservice.com (www.foodservice.com) - An Online Community for Foodservice Operators was used in creating the chart.

Early January market prices from 2007 to 2008 have increased 62.5%. The trading range in recent months, between $2.00 and $2.50 per pound, is well above 2006 levels.

Pizzas use anywhere from 6 to 12 ounces of mozzarella cheese per pie. Many operators pay 75 cents more per pie for this key ingredient. If the target food cost percentage was 25%, they'd have to raise prices $3.00 to maintain margins. With plenty of delivery and take-out options competing for market share, a $3 increase may be a tough sell.

I'd recommend more profitable add-on sales to improve results. Soft drinks, garlic knots (a New York favorite), salads, chicken wings, and other non-dairy options could help the bottom line.


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Food Prices Are Way Up!

In today's SmartBrief, there's an article about wholesale price increases for food quoting the National Restaurant Association data. The prices for food at the wholesale level have risen 7.3% since this time last year.

Although the article focuses on a sole proprietor who has found it difficult to raise menu prices, they mention the efforts of publically traded Panera Bread. It's too bad they didn't interview a pizzeria owner or a Mexican concept. The current market statistics available to subscribers at Foodservice.COM show Mozzarella Cheese has increased 49% in market price since last year.


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Prime Market Follow Up

In my recent post Prime Market Deal , the moves in the market prices for prime beef tenderloin were highlighted. We now have a new update.

The recent market update available at Foodservice.COM shows the market anomaly of the week ended 2/1/2008 reversed course in the following week. A 10.8% gain in the price for prime beef tenderloin wiped out most of the short term opportunity. It is possible to now place the 2/1/2008 market opportunity in better perspective.

Prime beef tenderloin market priced below $11 per pound is a bargain when put in the context of recent market activity. As I compose this post, oil prices are falling close to the $90 level. Since the grains market is linked to oil now due to the increased ethanol production, further volatility is likely.

It appears these short term weaknesses in prime beef prices represent a clear buying opportunity. Now is a good time to check your delivered price per pound and put it in relationship with the market.


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Prime Market Deal

Market prices for prime beef tenderloin has plummeted from last year's $14 plus levels to below $11 a pound. These are market prices so you won't see anything close to $10 on your invoices. It's possible for savvy high end operators to find a sweet spot. Normally, a Beef Tenderloin yields 6 nice steaks from a 6 pound piece. This is a huge drop in the cost per portion (almost 25%).

If a typical operation serves 1,000 steaks a week from the tenderloin, the savings is $3,500. Major dollars. Two factors seem to be in play. Oil has declined from the $100 per barrel level and the supply/demand mix has changed. Fewer people are buying prime filet in relation to the supply. I see this as logical. During the period of rising prices, many operators shifted from prime to choice. The market statistics on the excellent industry portal Foodservice.com for the week of February 1, 2008 support this observation.

The change in average price per pound for choice is down only 4.4% from last year's figure. This is a minor drop which can be accounted for in the modest recent energy cost improvement. In sharp contrast, the average price for prime is way down - over 24%.

How much would you pay for a wonderful prime Filet Mignon steak? For fantasy purposes, let's pretend our restaurant is right next to a major beef producer and we can get market prices. We'd need a selling price of $35 to offer the meat with some rolls and butter at a 33% food cost percentage. Back a year ago, we would need to offer the same steak for over $45 to obtain the 33% result. Many operations have increased their selling prices over the year. If they are charging the $45 plate charge, a 25% food cost percentage is possible.

Back to reality, most operators live far from the huge beef producers and pay a fair markup. The food cost percentages are far above my fantasy example. Regardless, if you locked in for the quarter with your supplier last week, you may have pulled the trigger at a great prime market time. Let's stay tuned to see if it was a good deal.


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Number One Cause of High Food Cost

When your accountant or office manager hands you the monthly income statement, where do your eyes go first? Probably, you look at net income and then head back up top to see sales and food cost. If labor cost is a problem, you'll make that line a priority. When the net income is below budget, serious analysis begins.

I'd like to see a lot more analysis of super net income months. My bias comes from the high percentage of disappointments which follow an unbelievable profit in the previous month.

You can really dig deep into the numbers behind your weekly or monthly food cost calculations. A typical restaurant stocks over 800 food items and spends more on food than any other income statement item. Each of these ingredients has a unique mix of shelf life, popularity, storage requirements, preparation requirements, portion size, market conditions and delivery days. Savvy operators need to reorder these food items frequently due to food's perishable nature.

Improper ordering is the number one cause of high food cost. If you don't believe me, look at your accounting records. You'll find your worst food cost percentages are in slow months which follow an especially busy month. The lack of sales volume brings the problem into the light of day. Ordering problems get "solved" during busy periods since storage capacity is strained as patron counts soar.

It's important to recognize the coming reality as you move from a peak season to the off-peak period ahead. Order less food. You'll be forced to use more of your stocked items. Run some specials to clear frozen items. Produce and sell some soups with the overstocked produce. Above all you should not shift the cost of over ordering in the peak month to the next month. If your ending inventory is more than your expected consumption for the next two weeks (off season), you should ask the accountants to setup a reserve for waste and spoilage.

Look ahead when ordering food and your cost fluctuations will decrease.