What tip, strategy or tool do you feel is vital to properly controlling food costs in your restaurant?
This was the question RestaurantNews.com asked readers. Following is what they had to say. Please feel free to add your comments below.
In my experiences, food cost is best controlled in the following ways:
1. Strict adherence to recipe standards through the use of tools such as digital scales and measurement cups, spoons, etc.,
2. Proper food rotation practices, including the use of “day dots” etc.,
3. The religious use of spatulas to scrape pans, bags, etc.,.
The thing I do most in the resturant that I manage is to make sure my cook staff is putting out the correct and the best food they can! Most food cost is destroyed by reorders and food being thrown out, from cooks not reading checks correctly! The proper training of cooks and regular monitering of your cooks waste is the key! I can proudly say my food cost is a 25.8%! But I’m working on getting it lower!
Menu planning — which will result in accurate order, storage rooms under lock and key, authorized personel to “pull” food items to be used, accurate portion contol, minimal waste, etc., are just a few contributors toward running a good food cost.
Inventory every day (make sure that you have inventory lists that you use every day and that product is in the same location every day) to make sure you order properly and prep properly and thus avoid waste. Shop for prices, despite service, every once in a while a competitor may have far better prices.
To control food costs:
Every item on your menu should have a recipe.
Recipes should be costed out at least three times a year, on products that consist of the bulk of your menu.
All kitchen staff should record all food waste, for whatever reason and tell management . (this all goes with proper training).
Inventory control is a vital factor. Weekly inventories of all food should be taken and a monthly inventory, costed out to determine food cost must be calculated.
It is very easy to create inventory extensions in Excel and I have been using it for 7 years. Updating prices is easy and laboring on the claculator is kept ot a minimum.
At least once a year, menu should be reevaluated to determine its profitablity.
Every line employee should be properly trained to produce the product correctly.
When receiving product, no matter how time consuming, each item should be checked against the invoice before signing.
Every fresh product should be checked for quality and shelf life.
Management should be trained in kitchen to observe if product is being produced correctly to the recipe.
Waitstaff should be trained to observe any differences in the product. Over portioning hurts the restaurant and customers. The next time they visit your establishment they will be disappointed and won’t return, thinking they are not getting the value for their money that they received the last time they visited.
Ownership being on premises as much as possible and keeping constant contact with all aspects of operation, even on a minimal basis.
If by “controlling” you mean “quantifying”, I imagine there are quite a few programs on the market that can help out in this particular task. I do recommend however, that owners/managers learn the use of spreadsheets (Lotus, Excel) as their flexibility allows for very interesting possibilities.
The thing I feel has the most influence on controlling food cost in my restaurant is training of the managers and crew. Properly recording waste, tracking employee meals, and product rotation are all often overlooked in the process of initial training of employees. Security is another important factor. People taking out the trash are never supervised!!! How easy it is to throw a case of meat under the trash and stick it in your vehicle while you’re outside. Staying on top of these things will make a definate impact on food costs. Communication is another impact. Do all employees know what goals you are shooting for? I have started doing daily inventories on my problem items, and I am zooming in on where the problems are starting.
Educate employees on what each product costs, put it in terms of things that they can compare to such as a case of lettuce costs as much as a tank of gas. Also, less visible stock. In other words, the less they see the less they tend to use. Also keep only the amount of product on hand that will be used. My directer of operations calls this the toothpaste tube theory. The end of the tube seems to last almost as long as the rest of the tube.
My answer to the first question would have to be proper training of all of your employees starting at the bottom all the way up to your other managers. If they are properly trained on portioning and waste control it will make your job alot easier to control your food costs. Another thing that is also important is proper ordering. Only order what you are going to use until the next delivery date. Otherwise you have money sitting on a shelf that could go bad before you are going to use it.
I would try not to over stock any product. Work with what you have for the week or even day. Try to use fresh products that are always within your budget. Distributors/Salespersonel that you deal with weekly should know what your looking for and may even relay to you if there are any special deals. Try to calculate the cost of the entree/desert etc. that will be served. If there is not enough profit to be made and you still want to serve it, try to make up the cost with something else being served.
Controlling food cost is easiest when you have well trained employees who know how much to cook and when. This cuts down on waste. Also having a manager who is responsible for doing all the ordering and who is aware of the prices and cost increases is a must.
Most importantly, knowledge is key! If team members know what they have to control, then you are more likely to have control of it. Just let employees in on what needs to be done! I find the more they feel like part of the team, the more willing they are to help out. That is if you have the right people, and getting them is a whole other subject.
I think if you inventory your high dollar food items on a daily basis, and you have a registar system you can compare your ideal usage to, then you can determine if you have a usage problem. Also, if you are cooking too much food durning a slow period, you might serve poor product, resulting in customer not satified, and/or you might have to throw out the product. You have to manage your food usage smartly.
Food Cost has always been my strongest area of concern and by making it such, it has also been my knight in shining armor sort of speak. I have become very successful by concentrating my time in my restaurants into controlling every aspect of Food Cost. There are so many areas to watch in the restaurant (i.e.-Labor controls, Op supply, etc..) that you sometimes feel where do I start? Food Cost in most of our cases is the top baby on that P&L, so why not start there? I have always controlled Food Cost by staying focused on the issues, and using all the necessary tools in my power to prevent those issues from becoming problems.
The number one way to Fix your Food Cost in your restaurant is AWARENESS. Are you in the office all day or night, looking at those Q.C.R (Quality Cost Report) reports, trying to understand why or what is wrong with your Food Cost, asking yourself questions like, “What am I doing wrong?” and “How can I be losing so much food?”? Well one reason is just that: “GET OUT OF THE OFFICE”
Every time I have seen someone successful in Food Cost they were always on the floor finding their problems. They were addressing any and all issues, from proper procedures in the Grill Area to Waste controls. Keeping everything Locked up in Storage and Walk-Ins so that theft was kept to a minimal. Getting your management team together and showing them on the floor what you see, teaching them to be aware of the same issues you see. Is your employee meal policy properly accounted for, or are your employees gobbling up the profits every chance they get. Have the policies in place, train the employees to your expectations then give them ownership and pride in the idea that they are helping you to control a big cost in the store. Believe me it works.
Have a manager’s meeting weekly if the Food Cost is that Bad. Discuss the top 3 to 5 items of oppurtunity in your restaurant. Do a weekly inventory consistently then take an hour or 2 to pull those Food Cost Reports. If your Food Cost starts getting better, then keep doing what your doing, maintain that awareness and presence on the Floor. Let everyone know your there to support any and all ideas. There is no “I” in the word Team. You can’t expect to do it all yourself.
Oh, and when you hit that Goal your boss has set for you challenge him on it. Tell him your going for lower. Then when that Bonus starts to flow in just thank yourself for being a bit more aware on the floor, because in the long run it always pays off.
Some Food for thought things to look at also:
A. Accurate Inventories, maybe use 2 people to double check.
B. Price problems, is your computer maintained with the current prices.
C. UOM- Units of measurement, Are your recipes and UOM’s correct.
D. EOM- End of Month, Again 2 people cheking for accuracy.
E. Who checks in your truck? Are they trustable, not neccessarily an Assistant Manager because I have met a few that took the product as it was off loaded.
F. Action Plan’s- Have a goal every week after you do that inventory, of the top 3 to 5 problem items in your restaurant. Challenge everyone to find the problem.
G. Reward your people for a job well done. Give out some bonus money. In most of our high volume restaurants fixing food cost by .50% on $100,000 in sales is $500 additional profit to the bottom line. Spend 50 dollars on your folks. See if they go to 1% next time, for a goal?
One vital strategy I’ve used is a combination of two items actually. First, proper food procedures need to be in place. Consistant taking of food inventories, proper ordering and rotation, prep procedures with build-to charts and preperation controls are some of the tools I use on a regular basis.
Secondly, I bring the staff in on the process and explain to them the importance of proper food costs, and how it affects them. Being in the pizza industry for almost 10 years, I’ve had quite a bit of success in controlling food costs. I’ll explain to the staff, for example, how wasting 1 ounce of cheese on each pizza translates into major lost $. If at 16 cents/ounce X 100 pizzas = $16.00 a day X 365 days = $5840 per year. And show them that it would mean, for a full time employee working 40 hours per week, that it cost 6 employees a 50 cent per hour raise. They seem to pay much more attention to detail when you show them how it affects them, and they become more involved with the operation on a personal level.
“Hey, we do everything right. I don’t understand why we have a food cost problem!”
Yeah, okay. Everyone is trained properly, you are an operation animal, you are all over it! When we’re open for business nobody is better than you!
– What about those deliveries? Are you getting everything you paid for? Are you checking it in with a fine tooth comb? Are you absolutely sure nothing is missing? You say you don’t have time? You trust your purveyor? Chances are, if you have a problem with food cost and nothing else is obvious, this is the place to look. Most of us really are too busy to check in orders properly. It’s time consuming, it’s tedious and the driver is acting like you are holding him up. Take the time! If you are not doing this, you are losing a fortune! Remember, every invoice has a credit in it. You just have to find it!
– What about after closing? Do you allow your employees to bring in book bags? Any kind of bags? Do you allow your employees to leave without YOU opening the door for them? Do you let your people bring leftover food home with them? Did you know this encourages waste? Don’t allow bags (if you do, have a periodic bag check, it’s legal). Let your people know that nobody opens the door after closing except the manager/supervisor.
If you have a food cost problem and nothing during the operation seems to be obvious, than either product never came in the back door or it’s leaving the front door without being paid for. Sometimes we are just too trusting. Believe me, I learned the hard way.
I have two tips to offer that some people already know. To contol theft keep low stock levels in your coolers and stockrooms. Employees feel if you are going to run out of a product, they are less inclined to take it. The second is get your employees involved more in the operation from watching waste levels to watching for theives.
It is very simply to have employee awarness of what your actual and your theoritical is for the month in question. Break it down into actual $ cost for each item as well as an example. For instance: we used x number of gallons of salad dressing and that was enough for x number of extra salads. Another way is to say we wasted x number of dollars this month and that is comparable to driving what ever delivery truck up to the dumpster and throwing away the food and writing a check for it. If your employees know how much you are using they can see why it is important to be careful.
Depending on whether you use a method of forecasting on a weekly, monthly, and yearly, so that you can plan out your usage and prepare for the business levels. I also use a tracking sheet for daily loss, compared with daily costs.
I believe the most effective way to control food cost is instilling a sense of ownership among the staff. Most importantly among the kitchen staff. I have found they are very effective when you include them in loop. This means keeping them aware of the current food cost, areas where we need to improve and what our goals are for the next period.
The second most important thing to control food cost is ordering efficiently. Nothing will drive up food cost like having too much inventory on hand.
I feel the most valuable tool for saving on food costs is making all employees understand why you have to stick to correct portioning. The response I get from an employee is, “I’m just trying to make the sandwich look good.” They use ingredients for 2 portions. My response is, “Try to eat the sandwich you just made.” Too many ingredients, it falls apart. You see the results going into the garbage.
Still the hard part is getting everyone to follow. Maybe if you consistently showed the employee the waste. I’m still working at this constant challenge. Sometimes its just cutting corners effecting the product, which should not take place.
I would have to say that I am able to keep food cost down by:
A. Making sure that my employees (FOH and BOH) are properly and thoroughly trained. FOH employees can kill dairy cost by bringing out too much sour cream (or any) for food items or, milk or creamers for coffee. BOH employees in my restaurant do not let any food item leave the kitchen without a check.
B. Putting in place an incentive program for the kitchen. We have contests for the kitchen as well as sales contests for the waitstaff. I do trade-outs with other local merchants such as movie theaters, other restaurants, etc.,. When our food cost reaches the goal I have set, each cook reaches into a grab bag of vouchers for the prizes obtained through the trade-outs. This keeps them motivated and gets them actively involved in trying to make my operation more profitable.
The best way to control food cost, in my opinion, is by a combination of close supervision of employees and taking advantage of the software that is available.
In controlling food cost of course all the obvious is important–waste, portioninng, recipe spec., cook and prep training, etc.,. One thing that a lot of managers overlook is the front of the house computer training and menu knowledge. Lack of training on the computer results in incorrect orders too many times. Add ons or special instructions, including meat temps, are rang incorrectly resulting in “recooks” and food waste. Most computer systems are set up so that it is easier to void than it is to comp or promo an item and, therefore, a manager voids and loses food cost. More intense training of ringing food with varied special orders and better knowledge of the menu would prevent a a lot of recooks . . . orders on the fly . . . and therefore, food waste would decrease. Recooks can result in dissatisfied guest and the percentage of guest retention is thereby decreased.