Taking the "Gut Feel"
Out of the Food Cost Equation
The sound of those words is enough to send a chill up the spines of
the most intrepid chefs. Blood pressures are raised by it. Bonuses
are forfeited because of it. Careers hinge on it. It is undoubtedly
one of the most sensitive topics in the industry.
I propose that
more often than not, the source of the stress isn't the food costs
themselves, but the never-ending disparity between managers and
chefs regarding what the magical "ideal" or "theoretical" food cost
should be. Depending on which side of the serving line they are on,
each member of the management team uses their own "gut feel" to
attack or defend the monthly food cost number, a feeling that is
influenced by industry averages, experience or bonus desperation.
can get in the way of facts. By monitoring food costs based upon
some arbitrary number instead of investing the time to calculate the
true ideal food cost, management can be guilty of criticizing a
kitchen staff's performance when the costs are in line or, worse, be
lulled into food cost complacency when the costs are running two to
three percentage points off the mark. The best gauge of a
restaurant's food cost is an internally developed standard based
upon an analysis of inventory, recipes, sales mix and price
Simply put, an
ideal food cost is the number that will end up in the monthly food
cost bucket if everything goes as planned. It is the aggregate cost
of all ingredients that should have been used, based upon your
recipe costs and sales mix. There is nothing arbitrary about it.
"The trick is
identifying all of the menu items and condiments that go out to your
customers, nailing down each item's recipe ingredients, calculating
the cost of preparing each recipe based on current inventory prices
and ensuring that you have a system in place for tracking the menu
sales mix. Depending on the size and complexity of your menu, that
can be about as much fun as a visit from the health inspector."
your back office computer can take the bulk of the pencil pushing
out of costing your menu. There are currently numerous software
programs on the market that have streamlined the arduous task of
menu costing, replacing the tedious manual recipe cost sheets with
"electronic" cost sheets that can update your recipes "on the fly"
for changes in ingredients, portion sizes, inventory costs, or menu
prices. And best of all, the programs are designed to be "manager
friendly", so you don't have to be an engineer to operate one.
Yes, you still
have to dig through the invoice pile to find the current cost of
pineapple tidbits and get your chef to commit to the number of
parsley springs on the blue plate special, but the beauty of these
programs is that once the inventory and recipes have been entered,
you have a database that is packed full of valuable information on
inventory usage, purchase trends and menu item profitability that
would take many labor hours to accumulate manually.
So stop making
excuses. If you want to replace the monthly food cost
rationalization game with food cost accountability, then get serious
about getting a handle on your food costs. The bonus you save may be
TO VIEW THE RESTAURANT RESOURCE GROUP'S
RECIPE, INVENTORY & MENU PROFITABILITY WORKBOOK.
This Excel Workbook is designed to easily cost
each menu item in your restaurant, maintain dynamic links to
each ingredient used, and accept inputs from your POS system
with the number of each menu item sold. Not only can your
restaurant's overall Ideal Food Cost be automatically derived
from this workbook, but so can the Ideal Food Cost of each
Menu Category (e.g. Appetizers, Entrees, Desserts).
|Chuck Gohn is
President of Restaurant Associates NW (www.ranw.com).
Chuck specializes in restaurant accounting systems and cost
controls. He can be reached via email at