How to fight inflation?
The prices of raw materials have skyrocketed, strongly affecting the hospitality business. To protect margins, it is necessary to review the value chain. How can we optimise resources and reduce costs in restaurants, bars, and hotels?
Menu engineering and food waste reduction
Reducing the quality of the product offered to customers in order to pay lower prices will not fix the situation, neither in the short term nor in the long term. It will also lead to dissatisfaction and a possible loss of clients. Thus, something that can be done is to continue to offer quality food by choosing seasonal products and, above all, by opting for those that are most in demand. But, how can we know this? Well, by studying the menu and applying the menu engineering technique. And what is this technique specifically about?
The main objective of menu engineering is to optimise the performance of a catering business’s menu. Once applied, it will tell which dishes are more or less profitable based on the results of the study of two variables: the margin left by each dish, and its popularity among customers. To do this, the menu must be studied by ranges and over a given period (a month, a quarter or a year). However, before starting, we must have data such as:
– Popularity of each dish
– Number of sales of each dish
– Raw material cost of each dish
– Cost of production of each dish
– Retail price of each dish
– Gross operating margin
To calculate the margin, the cost of each dish (raw material + production) must be subtracted from the selling price.
How to apply menu engineering in your business? Once you have obtained the data, what you have to do is to create a weighting of all the dishes. To do this, you have to give each dish a score according to its gross profit and another according to its popularity. For example, the dish that sells and is ordered the most will have the highest score, and the dish that is ordered the least will have the lowest. The same is done for profitability, and this is applied to the total number of dishes on the menu.
Once we have established the dishes by their profitability and popularity, we will divide them into 4 main groups:
– The star dishes, which are highly profitable and popular, are the ones to be promoted.
– Plow horses dishes, very popular but not very profitable. An attempt should be made to increase margins, perhaps by raising the price a little.
– Puzzles are very profitable, but are not the most popular. Ideally, they should be given a special place on the menu to promote them.
– Dog dishes are neither profitable nor the most sought-after. So, it would be advisable to remove them from the menu.
Against food waste, the “doggy bag“
Reducing food waste will also be a factor in balancing the operating account. Sustainability and the zero waste objective is a trend that is taking hold in society, and one which catering businesses must adapt to. Nowadays, more and more restaurants are joining this initiative by incorporating, for example, the option of the “doggy bag”. This element means taking leftover food home, and despite being previously frowned upon, has now become the norm, and has meant much less food waste in restaurants and savings for customers on their meals.
In addition, there are several other applications that contribute to this zero waste objective by providing a leftover food service for much lower prices, thus providing an outlet for so much wasted food.
