With today’s supply chain challenges, rising fuel cost, food cost inflation and increased labor rates,
controlling food cost is critical to maintain a profit.
While there are many avenues to consider when identifying your food cost and ways to reduce it, here
are my top 5 to consider.
1. Know your markets
There are many influences that drive market conditions ultimately affecting food cost fluctuations.
Establishing a good relationship with your food service distributor can help you anticipate potential cost
increases due to conditions such as demand, fuel costs, weather, and intermarket dependencies. For
example, if there were a drought in the Midwest that affected corn crops, there would be a price
increase on corn (whole and kernel). However, that same increase also affects our ranchers and what
they are paying to feed their cattle. When you are aware of these volatilities that can strain your wallet,
you can game plan with your distributor for alternatives. A frozen beef patty with equal performance to
that of a fresh patty would carry a more stable cost than fresh ground beef. In this scenario you would
preserve your cost of goods and still deliver a consistent product to your customers.
2. Portion Control
Today's food manufacturing facilities are becoming more sophisticated each day. In addition, given the
current labor shortage, finding reliable and experienced help is a challenge. Consider what a knife stroke
costs you in the back of the kitchen when it comes to your proteins. A slight miss to the right could easily
add an ounce to your steak. Based on a $12/pound product, a one ounce error would increase costs by
$.75 per portion. To avoid this type of waste, you may want to consider getting a fresh portion cut steak.
While a pre-portioned product comes with a higher price point initially, it may save money after
considering potential waste (trimmings and errors) and labor costs. Additionally, a portion cut product
allows for consistency in not only plate coverage, but also cook times.
3. Waste Management
There are several ways to view waste. It could be loss due to trim (beef or produce). For this you could
look at sourcing pre-portioned products to eliminate any yield loss. However, the biggest culprit to waste
is perishability. The quickest way to address this is by evaluating your menu and removing items that
require a single unique ingredient. If there isn't adequate sell-through, you will be throwing away spoiled
or outdated products. You could replace these menu items with others that cross utilize some of the
same ingredients to increase usage.
4. Inventory Control
It is critical to have the appropriate par levels set up for each item. Too much inventory caused by over
ordering ties up a lot of cash on the shelves, increases the risk of spoilage, and invites theft. The proper
par levels ensure freshness of product as well as consistent availability, both of which drive customer
satisfaction.
5. Sell Price
Many times in the field, I would hear a restaurant operator proudly say they have not increased their
prices in 3 years. With today’s inflation, price increases are a necessary evil, a requirement to remain in
the black. There are several ways that make adjusting your sell price a bit more nimble.
One, when deciding what style of menu to use, consider spending your money on attractive menu covers
with simplistic inserts that you can inexpensively reprint when you need to change price.
Two, use “MP” (Market price) for highly volatile menu items.
Lastly, my favorite is to embrace the “LTO” . This is a great way to take advantage of items in season with
best value and maximize your profits with their sell price.
With that said, please remember you can’t save yourself into prosperity. It is time to think of new ways
to earn additional revenue.
Let my team @ Peckwater Brands show you how. We empower kitchen owners to run successful delivery
only franchises from their existing kitchens. You could be only one click away from extra orders and
increased profits.
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