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.
Saturday, August 30, 2008
Monday, August 18, 2008
Eliminate Chronic Waste
Years back, one of my clients had a policy of brewing coffee fresh every 20 minutes. This simple policy caused an extremely high level of waste in off peak hours. They offered patrons a choice of house brew, hazelnut flavored, and vanilla flavored (regular roast and decaf for all three).
Each afternoon, the coffee sales would slow and the routine began. The staff would habitually dump 6 nearly full pots of coffee down the drain 3 times an hour.
On more than one occasion, I have noticed operators do not adjust production to meet demand. I have seen break rooms at conference centers stocked with the same levels of donuts, bagels, danish and other pastries each day. I asked to see the conference room guest counts and the levels varied from as few as 40 to as high as 300. Most of the day old pastries made it to the staff dining room.
If you observe enough operations over many years, certain patterns emerge. You'll find management strictly controls center of the plate portions in most restaurants. On the flip side, you'll find tremendous waste in condiments, light cream, coffee, fresh baked products, portion packets, etc.
This past weekend, I went out for breakfast at a local spot. My waitress delivered my hot cup of coffee with 6 half & half portion packs. I looked around and noticed I was not singled out for this treatment. You could see many guests loading 3 to 5 of the creamers in their bags.
One of my clients baked rolls fresh all day long. At the restaurants, patrons were served a generous basket of rolls. It was common for patrons to request more rolls and they were always given a second basket. On take-out orders, some locations stuffed a bag with as much as a dozen rolls with each order.
These are all examples of chronic portion control issues which often do not hit the management radar scope. Companies with a passion for precision portion control on meat and seafood items frequently drop the ball on many other high volume items. Eliminating chronic waste and over-portioning will help lower your food cost. Start looking around for obvious issues. Take a second look at your policies.
By matching coffee production to guest counts, managing the number of creamers, rolls, baked goods, etc. and purchasing the proper container size for your needs, you can eliminate most chronic waste.
Each afternoon, the coffee sales would slow and the routine began. The staff would habitually dump 6 nearly full pots of coffee down the drain 3 times an hour.
On more than one occasion, I have noticed operators do not adjust production to meet demand. I have seen break rooms at conference centers stocked with the same levels of donuts, bagels, danish and other pastries each day. I asked to see the conference room guest counts and the levels varied from as few as 40 to as high as 300. Most of the day old pastries made it to the staff dining room.
If you observe enough operations over many years, certain patterns emerge. You'll find management strictly controls center of the plate portions in most restaurants. On the flip side, you'll find tremendous waste in condiments, light cream, coffee, fresh baked products, portion packets, etc.
This past weekend, I went out for breakfast at a local spot. My waitress delivered my hot cup of coffee with 6 half & half portion packs. I looked around and noticed I was not singled out for this treatment. You could see many guests loading 3 to 5 of the creamers in their bags.
One of my clients baked rolls fresh all day long. At the restaurants, patrons were served a generous basket of rolls. It was common for patrons to request more rolls and they were always given a second basket. On take-out orders, some locations stuffed a bag with as much as a dozen rolls with each order.
These are all examples of chronic portion control issues which often do not hit the management radar scope. Companies with a passion for precision portion control on meat and seafood items frequently drop the ball on many other high volume items. Eliminating chronic waste and over-portioning will help lower your food cost. Start looking around for obvious issues. Take a second look at your policies.
By matching coffee production to guest counts, managing the number of creamers, rolls, baked goods, etc. and purchasing the proper container size for your needs, you can eliminate most chronic waste.
Monday, August 11, 2008
Food Cost and Break Even Point
In speaking with many local operators (completely unscientific sample), the consensus estimate is a 12% drop in revenue (year over year). This is tough to swallow with the current trends in food cost percentages. Since the cost of many commodities have risen, the impact of the revenue decline has hurt more than usual. We haven't seen the typical drop in ingredient costs which occur in many recessions.
These higher food costs have caused the break even point to grow rapidly. Many operators have seen a shift from 5 to 10% profit to a loss. What can restaurant managers do to lower their break even point in this challenging environment?
This is a time to promote people with line authority and shed corporate staff. A lower fixed overhead expense is the fastest way to lower the break even point. If you currently work in a corporate staff position, try to get closer to the customer. Abandon your desk post and go into the field. Find ways to improve the efficiency at your locations.
I worked for 3 corporations on either the internal audit staff or as the operations auditor. My travel time averaged over 70% for a 10 year period. In each office, there was a staff room and you were considered under-utilized if the Vice President saw you in the room for over 1 week. My final travel intensive job required close to 90% out-of-town work. When it was time to come in from the field, my boss handed me my paychecks and gave me the week off.
The return for my on site work was enormous. I knew the key operations staff and many of the department heads on all of our key projects. We worked together to solve many issues which simply can't be handled by clever report analysis and endless meetings. You'll find messy walkins, open back doors near closing, unopened boxes of seafood and meat in the garbage, employees with substance problems, invisible over-achievers, well-disguised under-achievers and you'll see many other critical issues first hand.
The break even point will go down as you become a variable cost instead of a fixed expense. You'll be part of the gross margin improvement. Lets say your salary is $1,500 per week and you can visit 2 locations per week. If the sales at each location is $50,000, the combined sales figure is $100,000. If you can make a 1.5% impact, you have covered your expenses at the operation level and completely eliminated your cost at the office.
Perhaps you can have a 3% impact. You will probably be promoted back to the headquarters to make sure the people are not in the staff room for more than one week.
These higher food costs have caused the break even point to grow rapidly. Many operators have seen a shift from 5 to 10% profit to a loss. What can restaurant managers do to lower their break even point in this challenging environment?
This is a time to promote people with line authority and shed corporate staff. A lower fixed overhead expense is the fastest way to lower the break even point. If you currently work in a corporate staff position, try to get closer to the customer. Abandon your desk post and go into the field. Find ways to improve the efficiency at your locations.
I worked for 3 corporations on either the internal audit staff or as the operations auditor. My travel time averaged over 70% for a 10 year period. In each office, there was a staff room and you were considered under-utilized if the Vice President saw you in the room for over 1 week. My final travel intensive job required close to 90% out-of-town work. When it was time to come in from the field, my boss handed me my paychecks and gave me the week off.
The return for my on site work was enormous. I knew the key operations staff and many of the department heads on all of our key projects. We worked together to solve many issues which simply can't be handled by clever report analysis and endless meetings. You'll find messy walkins, open back doors near closing, unopened boxes of seafood and meat in the garbage, employees with substance problems, invisible over-achievers, well-disguised under-achievers and you'll see many other critical issues first hand.
The break even point will go down as you become a variable cost instead of a fixed expense. You'll be part of the gross margin improvement. Lets say your salary is $1,500 per week and you can visit 2 locations per week. If the sales at each location is $50,000, the combined sales figure is $100,000. If you can make a 1.5% impact, you have covered your expenses at the operation level and completely eliminated your cost at the office.
Perhaps you can have a 3% impact. You will probably be promoted back to the headquarters to make sure the people are not in the staff room for more than one week.
Saturday, July 19, 2008
A Time To Listen To Your Guests
Whenever the economy turns down and discretionary income declines, the advantage shifts from hot new concepts to established names. The recent strike in Hollywood left many new programs without writers. These shows were just starting to build an audience. The strike put plenty of these shows out of the lineup when the strike ended too late. Previous winners survived.
Our industry is similar and the current downturn certainly hurts the hot start ups with huge recent cash outlays. Established restaurants, hotels, resorts and caterers have had years to help cover their start up investments.
Well established operators need to listen to their guests. Competition is fierce in many markets. This is an opportunity to regain lost market share. Broaden your base by listening to your loyal guests. If you know everyone by name, be sure to ask friends about lost regulars. Try to find out why you lost their loyalty.
I can remember several favorite spots I abandoned over time. Typically, I'm most sensitive to a drop in food quality or service. Some of my friends get tired of a concept due to menu stagnation. This would not be high on my personal list. I like to visit specialty restaurants with highly consistent quality.
I always encourage clients to eliminate dog menu items. However, I admit I stopped dining at a pizzeria in the New York metro area when then removed my favorite pie. This pizza was at the bottom of the printed menu and suffered from name confusion.
They decided to call a thin crust pizza with artichokes, salt cured olives, anchovies, fresh tomatoes, a dusting of cheese, thyme and olive oil - The Sicilian. We loved the pie and were disappointed when they dropped it. I'm sure they had many complaints from patrons expecting a thick crust square pizza with light tomato sauce and an avalanche of shredded mozzarella. When I told the manager he should try to revive the pie using a new name, he blew me off.
I'd go back in a New York minute if they offered this pizza again. They'll never know why I left. I am a silent complainer. Too many fantastic options are available. Many of your steady guests don't complain to management at all. They vote with their feet and go elsewhere.
The unusual nature of general ledger accounting is the inadequacy of the reports for identifying a disastrous week. Imagine your chef quits unexpectedly and you fly solo for a few weeks without a pro at the helm. The sales will not show the impact. Your books will reflect a lower management cost and a slightly higher profit.
In the dining room, patrons expecting the high quality they received in the past will leave disappointed. They may wait too long to receive a mediocre meal. A frustrated waiter informs regulars of the chef's departure. You have a major problem which will take a month or two to show up in the books. Over many years, the repeat of these bad weeks takes its toll.
People who demonstrate pure loyalty to a restaurant know the operation well. They know in advance when key staff members are on vacation. These guests know the nights of the week when their favorite wait staff member is not on duty. They know when to have a drink at the bar before sitting down in the dining room.
Now is a great time to greet and listen to your regulars when they come to your place. Find out what they order and if there is anything which could be done to improve their experience. Focus on consistently pleasing these loyal patrons.
Our industry is similar and the current downturn certainly hurts the hot start ups with huge recent cash outlays. Established restaurants, hotels, resorts and caterers have had years to help cover their start up investments.
Well established operators need to listen to their guests. Competition is fierce in many markets. This is an opportunity to regain lost market share. Broaden your base by listening to your loyal guests. If you know everyone by name, be sure to ask friends about lost regulars. Try to find out why you lost their loyalty.
I can remember several favorite spots I abandoned over time. Typically, I'm most sensitive to a drop in food quality or service. Some of my friends get tired of a concept due to menu stagnation. This would not be high on my personal list. I like to visit specialty restaurants with highly consistent quality.
I always encourage clients to eliminate dog menu items. However, I admit I stopped dining at a pizzeria in the New York metro area when then removed my favorite pie. This pizza was at the bottom of the printed menu and suffered from name confusion.
They decided to call a thin crust pizza with artichokes, salt cured olives, anchovies, fresh tomatoes, a dusting of cheese, thyme and olive oil - The Sicilian. We loved the pie and were disappointed when they dropped it. I'm sure they had many complaints from patrons expecting a thick crust square pizza with light tomato sauce and an avalanche of shredded mozzarella. When I told the manager he should try to revive the pie using a new name, he blew me off.
I'd go back in a New York minute if they offered this pizza again. They'll never know why I left. I am a silent complainer. Too many fantastic options are available. Many of your steady guests don't complain to management at all. They vote with their feet and go elsewhere.
The unusual nature of general ledger accounting is the inadequacy of the reports for identifying a disastrous week. Imagine your chef quits unexpectedly and you fly solo for a few weeks without a pro at the helm. The sales will not show the impact. Your books will reflect a lower management cost and a slightly higher profit.
In the dining room, patrons expecting the high quality they received in the past will leave disappointed. They may wait too long to receive a mediocre meal. A frustrated waiter informs regulars of the chef's departure. You have a major problem which will take a month or two to show up in the books. Over many years, the repeat of these bad weeks takes its toll.
People who demonstrate pure loyalty to a restaurant know the operation well. They know in advance when key staff members are on vacation. These guests know the nights of the week when their favorite wait staff member is not on duty. They know when to have a drink at the bar before sitting down in the dining room.
Now is a great time to greet and listen to your regulars when they come to your place. Find out what they order and if there is anything which could be done to improve their experience. Focus on consistently pleasing these loyal patrons.
Saturday, June 28, 2008
Be A Pillar Of The Community
As you fight through the current economic downturn, try to find simple ways to improve profits. Recent articles suggest the higher cost of living has resulted in diners who tip less and buy fewer extras (double whammy for servers). When your recently seated guests turn down bottled water or another beverage, ask them if they'd like a nice pitcher of ice water.
If you see someone more than twice a week, offer complimentary dessert. Its cheaper than a coupon war.
As a frequent traveler, I often dine alone in off season tourist locations. Since I build inventory control databases, I see these locales at their lowest traffic levels. You get a first hand view of the baseline business. The patrons are very much friends and are treated like royalty. Its not unusual to see a guest jump behind the bar and stand in when the owner takes a restroom break. In return, these friends are often offered a complimentary drink or asked to sample a new menu item.
People in these towns frequent each other's restaurants and there is a strong community feel. The cooperation is viral. When you return to the same towns years later, you will find the core network still in place. Turnover in the other spots is tremendous.
You see this type of cooperation in urban neighborhoods. There are blocks in New York's Greenwich Village or Upper West Side with this spirit. Similar treatment of loyal patrons and other restaurateurs in the neighborhood is evident.
As the folks on Wall Street abandon companies left and right due to missed earnings estimates, now is a great time for independents to focus on their loyal guests. Whether you are a single unit operator or run a growing chain, try to become a part of your community.
There are many major chains who get it. You see their names as sponsors of many charitable events.
These are times when payback comes for Little League sponsorships, your pizza served to the kids on the local swim team, and sending food to the Special Olympics. Encourage your loyal patrons to spread the word to their friends. Let everyone know you want the community to florish.
If you see someone more than twice a week, offer complimentary dessert. Its cheaper than a coupon war.
As a frequent traveler, I often dine alone in off season tourist locations. Since I build inventory control databases, I see these locales at their lowest traffic levels. You get a first hand view of the baseline business. The patrons are very much friends and are treated like royalty. Its not unusual to see a guest jump behind the bar and stand in when the owner takes a restroom break. In return, these friends are often offered a complimentary drink or asked to sample a new menu item.
People in these towns frequent each other's restaurants and there is a strong community feel. The cooperation is viral. When you return to the same towns years later, you will find the core network still in place. Turnover in the other spots is tremendous.
You see this type of cooperation in urban neighborhoods. There are blocks in New York's Greenwich Village or Upper West Side with this spirit. Similar treatment of loyal patrons and other restaurateurs in the neighborhood is evident.
As the folks on Wall Street abandon companies left and right due to missed earnings estimates, now is a great time for independents to focus on their loyal guests. Whether you are a single unit operator or run a growing chain, try to become a part of your community.
There are many major chains who get it. You see their names as sponsors of many charitable events.
These are times when payback comes for Little League sponsorships, your pizza served to the kids on the local swim team, and sending food to the Special Olympics. Encourage your loyal patrons to spread the word to their friends. Let everyone know you want the community to florish.
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