#313 - Quick Fixes for Rising Food Costs
Supply costs keep going up, and up, and up...
One reason of the main reasons is Asia's rising affluence and demand for 'western' dairy and grain products. Drought in many parts of the world has not helped either. But the reasons don't help reduce the squeeze on your margins.
Which of these Action Steps could you use in the next 10 days?
Cost balancing. New low-cost items may be needed on the menu to counteract increases in high-cost items. If veal prices have gone up, a better sales script could persuade customers to add a side order of (low cost) greens or salad. Create a popular dish from dried beans (eg nachos) to balance the cost of expensive seafood. You get the idea...
Menu Price changes. They may be needed, but done with care and backed up with plenty of information for the staff who will handle customer questions. Some items are more sensitive to price changes than others - do you know which they are? If a price increase is unlikely to reduce volume, make the change now. See 7 Menu Pricing Tricks. Eliminate Menu 'dogs' and 'saboteurs'. Dogs are those low-profit items that don't sell much but are kept on to add variety or extra lines on the menu. Saboteurs are the high volume items that steal sales from the rest of the menu because they are underpriced. Eg chicken schnitzels may be hugely popular, but if wrongly priced they will destroy your sales of steak, seafood and other chicken dishes. Boost dessert helpers. Let's face it, many great desserts are basically sugar, air and water. Lighter desserts are in, and there are high-quality flavour bases for mousses, panacotta and gelatos that need very little skill or labour to make. Dessert food costs of 15% can help balance steak items costing 38%. See Action Plan to Boost Dessert Sales.
Double-check portions. Do you really sell the correct 24 portions from that fancy Torte, or was one eaten by staff, one cut too small and the last two were dry and unsaleable? If it cost $24 and you sell it for $5 per portion, that's 20% food cost and $96 profit on the whole item. If you lost 4 serves, food cost is now up to 24% and the profit is only $76. Etc etc etc.Smarter, more efficient equipment. From simple items like a 'tomato witch' to dice them perfectly, electronic scales, dishwashers that use less water and chemicals, exhaust fans that adjust their speed as needed, combi-ovens that reduce shrinkage of cooked meats, big stick blenders to make soups & stocks by the bucket and Recipe Software to give you the truth about menu items. Help suppliers cut their costs. Check order sizes, delivery times, product specifications - a good vendor should help you work on these and pass on the savings. I was recently told of a club that cut the cost of fruit and vegetables 8% by having them delivered after lunch instead of in the morning. More tips on in How to Gain a Better Deal from Suppliers. Challenge some old myths. Who says 30%, 33% or any other figure is the 'correct' cost percentage? There are only 100c in a sales dollar, pound or euro, and they have to cover everything. If your wages and rent are high, something else has to give. The manager who gets the best pay can create great flavours, fast service and a happy team with food costs well below 30%. Challenge your team: can 25% food costs be the new normal?
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