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Balancing your menu to acheive food cost

post #1 of 10
Thread Starter 
I just need some feedback . My situation is frustrating because the fact i have a lot of things effecting my food cost as it is. I work in hotel and we have a fine dinning dinner service. We also provide a free breakfast to our guest. Employees get 40% off. I figure breakfast is atleast 10 to 15% of my cost .

What i'm trying to do is accomplish a 32% or better. So my question is how do I balance it.
Which i know the dinner menu has to make this extra money to make up for the loss from breakfast.

Ive been running a 34% but my food cost has jumped to 48% this month . WTF

Looked at are menu items and most of the dishes we have run about 32% and some in 23% and lower - is this the problem?Do I need to revisit my recipes and menu items and sell at a 25% to 28% or better to achieve this?

I would like some input from other chefs that could steer me in a better direction. These food cost have to come down. I appreciate it Chefs thank you
post #2 of 10

You need to look at other areas besides your menu to see where your increase came from. If I were in your shoes I would check the following:

 

1. Is the inventory accurate and correct? Your FC is only as accurate as your count and make sure your prices are updated to the latest price paid. If it is an incorrect count on the inventory, make sure you find it and correct it on the next cycle. Which will be low, but will average itself out to the food cost you are trying to achieve. 

 

2. Has your free breakfast guest count increased? If you served more FREE breakfast this past month than prior months than that will have a dramatic impact on your FC.

 

3. Have you had a lot of "Re-Fires"? If your line cooks are constantly making the higher end dinner items wrong and not up standards and have to make them again that will increase your FC. This is a form of waste just like over ordering and over portioning. IT MUST BE MONITORED.

 

4. Have you seen any evidence of theft? Is there any new dishwashers, prep cooks, line cooks, servers, anyone that might be taking food out of the establishment. In my experience, theft is the main reason for such a sharp increase in FC.

 

5. When was the last time you checked the prices on your order guide? Not just your perishables, The big truck vendors know that we as chefs keep track of the latest meat, produce, and dairy prices. Therefore they love to increase the price of the dry and paper goods without us knowing. I dropped a big truck vendor doing that to me. They were always in line with the perishable items. but I noticed the plastic wrap, of all items kept going up and up and up. I asked my rep WTF? and he couldn't give me a reason for the increase. SO I dropped them and I refuse to do business with them.

 

Remember that Sales, Theft, and Waste are the only things that affect FC.

post #3 of 10
Quote:
Originally Posted by GSUchef View Post
 

 

4. Have you seen any evidence of theft? Is there any new dishwashers, prep cooks, line cooks, servers, anyone that might be taking food out of the establishment. In my experience, theft is the main reason for such a sharp increase in FC.

+1. I'd bet to get the food cost to jump so drastically it has to be theft. 

post #4 of 10
Thread Starter 
Thanks for the comments.

Last months breakfast did increase higher. We had several wine dinners which most of the guest stayed in the hotel and had breakfast. A full hotel everyweek so thats 50 to 60 guest eating breakfast everyday.
But is that what really causing it?

I think there is a bigger issue like theft.
I just recently fired my sous chef for being wasteful and ordering shit we dont need.
Which could explain last months high food cost if he was stealing that's it right there.

As for refires im on the line with the cooks everynight now since I have no sous chef .
So no refires , no comp food items ,

So hopefully this month my foodcost will return to it's 34% or better
post #5 of 10

If you are providing food for breakfast, to correctly calculate a food cost percentage, your gross sales MUST reflect the price of the breakfasts, even if it is nothing more than a paper transfer.

 

You indicate 50-60 breakfasts every day, that amounts to $250 to $600 unreported daily sales, depending on the value of the breakfast offerings.

 

As an example, say a typical day is:

  • 50 breakfasts @ $8.00 value, $400.00 comped, food cost is, um 25% or $100/day
  • 100 dinners @ $25.00, paid ($2,500.00),food cost is, um say, 35% or $875/day

 

On the surface, your FC% is $975/$2500 = 0.39 or 39%, while taking into account the comped $400 breakfasts, it is actually $975/$2900 = 0.336 or 33.6%, almost a 20% difference in food cost percentage!

 

Increase the comped breakfasts to 60 @$10 ($150 FC) and you get $1025/$2500 = 0.41 or 41%, close to the change you've experienced.

 

Plug your actual numbers in before making any rash changes.

Chef,
Specialties: MasterCook/RecipeFox; Culinary logistics; Personal Chef; Small restaurant owner; Caterer
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Chef,
Specialties: MasterCook/RecipeFox; Culinary logistics; Personal Chef; Small restaurant owner; Caterer
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post #6 of 10
We get a credit from accounting at the end of each month for staff meal, lobby cookies and coffee and anything else that is a freebie so it does not interfere with actual numbers, this is possibly something that could probably be coded instead of cost of food maybe it gets coded to a sales and promotions or some other area so it's not even involved in actual food cost, sales or inventory.
post #7 of 10

The greatest tools for identifying food cost problems include:

Weekly inventories instead of monthly

Weekly ideal cost calculations

Properly segmented inventory

 

Weekly inventories instead of monthly inventories help you isolate potential cost issues to a particular week. If you are only counting monthly, you may be allowing a problem to persist for weeks before identifying it, possibly costing thousands of dollars in increased costs. Weekly inventories sound daunting, but the extra labor dollars needed are more than made up by lowered food costs. In restaurants, switching from monthly to weekly inventories shaves 4-6% points off the food cost, on average, in my experience. There are many "shortcuts" that can drastically cut the time necessary for counting inventory, such as having cooks prep every station to an exact count every Sunday before the inventory is taken, or taking a standard costs for your spices or FOH condiment station.

 

Are you calculating Ideal Costs? If you aren't, you can only guess at what your problem is. If you do calculate ideal costs, you will be able to pinpoint or rule out theft and waste as the source of your problem.

 

Calculating ideal costs is the practice of multiplying your sales by item counts by the recipes costs of each of the items you sell. This only requires a simple spreadsheet that you input up to date recipe costs into, then have FOH staff or managers input the weekly sales by item counts. Then, you multiply the number of each item sold by its recipe cost to calculate how much the food that you sold should have cost to sell. If you don't know what your food should have cost to sell, you can't know if there truly is a food cost problem or if you simply have a change in your sales mix. Some times, higher food costs can mean more profit if it is caused by selling an increased number of high cost, high profit items. When you are focused only on your actual food cost without comparing it to your ideal food cost, you can get too hung up on a percentage and make decisions that can adversely affect your profit in the quest for a lower percentage. If you are comparing the two and there is no discrepancy, but the actual costs are high, you know it was caused by a change in the sales mix. If there is a big discrepancy, and the actual costs are lower, you likely have a calculation error. If there is a big discrepancy, and the actual costs are higher, you may have waste, theft, calculation errors, or unrecorded sales. You'll still have some work to do running it down, but at least you won't be chasing your tail if its all just due to a change in your sales mix.

 

Missing sales are easy to identify by looking at ticket averages. If customer counts are steady, but ticket averages down, you likely have some FOH employee theft, such as employees voiding tickets or items from tickets, collecting the same dollars then pocketing the difference. Most point of sale systems have a void report. If servers have the ability to void without manager approval, there is likely some of that going on.

 

Calculation errors can be spotted by having the inventory proofread by someone other than the person who put it together. I suggest training hourly employees, shift managers and other staff to count inventory. The chef is responsible for making purchase cost adjustments (monthly) and proofreading the counts. You will be more likely to identify errors if you are looking at the inventory with fresh eyes, and not after you've just spent 4 hours counting and typing the count into a spreadsheet.

 

One of the most effective techniques for pinpointing cost problems is properly segmenting your inventory. Most chefs make the mistake of segmenting the inventory into storage area sections. This causes many items to be listed more than once and makes the sheet, much, much longer than it needs to be, which greatly increases the opportunity for errors inputting, pricing and calculating.

 

A food inventory should be segmented into food type sections. My spreadsheets use the food categories: meat, poultry, seafood, dairy, produce, bakery, grocery, kitchen alcohol and soft beverages. You could also segment your inventory into the same warehouse groups your food purveyor uses to segment your invoices. I prefer the first method because it makes the inventory easier to reference when counting products and writing recipes. The second method saves some time when you are calculating purchases by category though.

 

When you segment your inventory by food type, you eliminate all the extra instances of the same inventory item appearing on your count sheet which means less time updating item prices from your invoices, and lessening your opportunity to forget to update all the occurrences of the same item in separate areas. If you also track your purchases by the same food types, you can then have a cost of goods for each separate segment of your inventory. This makes it very easy to pinpoint the source of a cost issue by comparing week to week fluctuations in the cost of a particular food type.

 

To use this type of organization on your inventory spreadsheet, you have to name your inventory items in a way that when they are alphabetized, items that are stored together appear together on your spreadsheet. For example, two different beef items might be named, "beef, ground patties 4/1" and "beef, ground bulk". When the sheet is alphabetized, its easy to locate these items on the sheet. From there, you organize your shelves to match your sheet instead of making the classic mistake of organizing your sheet to match your shelves. Either way, its easier to count, but the first way, you gain a lot of other advantages.

 

Your inventory counting method can also greatly increase/reduce the occurrence of counting errors. Inventory should always be a two-man project. One person (the writer) should be focused only on recording numbers and checking the count unit to make sure the other person is counting the right size. The other person (the counter) is 100% focused on the shelf, painting the walls with his eyes and counting everything on the wall from top to bottom, left to right. They should not be counting based on what appears next on the sheet, but by what appears next on the shelf. This ensures nothing is missed because the counter's eyes never leave the wall. To keep inventory a short process, use more than one team of counters to speed things up. Each week, rotate the teams between storage areas. This eliminates the opportunity for those employees to cover up theft by manipulating counts.

 

There's a little more to it than what is above, but that covers the "gist" of it.

Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

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Brandon O'Dell

 

Friend That Cooks Home Chef Service

www.friendthatcooks.com

O'Dell Restaurant Consulting

www.bodellconsulting.com

 

Reply
post #8 of 10

Having gone from the fine dining world into institutional foodservice where we often look at the pennies, waste is a factor that needs to be constantly monitored.  It may not have the largest impact but you'd be surprised at how much monitoring waste can save, or cost, you a few percentage points.  If you have a butcher department are they watching how they trim the products and are they capturing usable meat, to be used in ground beef, stew meat, etc. from trim that includes good meat such as the chain from a tenderloin?  Is your garde manger watching the trim on lettuces and vegetables?  What about peeling potatoes-do they use a peeler or a paring knife that usually takes off too much flesh?  Are you capturing onion ends and celery leaves to use in stock (I am not suggesting the stock pot becomes a garbage bin like in some restaurants I've worked at, but there is good trim, produced daily that can go into the pot).  If you serve Prime Rib or other "cut-to-order" meats at service is your best person on it, and using a scale to double check themselves regularly?  All these things, individually, may not make a huge difference but together they can start to add up.  Too the point where my company has instituted a policy where all pre customer food waste goes into special bins and the manager occasionally goes through it, with the staff and points out what could have been usable product.  Believe me, it makes a huge impact when this stuff starts getting pointed out.  Not only do we save on food cost, but it can affect the amount of garbage you need hauled, which, in turn, can possibly save money also.

post #9 of 10

Has anyone used any of the software programs by Chef-Tec for inventory, recipe and costing.

Thank you,

post #10 of 10

I've used chef-tec at a couple of locations.

You have to build a database to get full use out of it, but it is handy for recipe and menu costing, scaling, inventory.

It is expensive, and support is limited unless you keep renewing the support, and upgrading the software (more expense).

If a company is buying it, I could find use for it.

I wouldn't spend my own money on it though.

I can do what it does with excel, though it would require a little more set up work.

Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad.
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Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad.
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