Top 8 Ways to Lower Food Cost

Food cost for most vendors and restaurants is the single biggest expense their business has. Labor cost has been steadily climbing and comes close to matching food cost. These two components, if not controlled, will absolutely bankrupt a vendor even with high sales and great marketing. Every person touching any process of food production from receiving to delivery to your guests must understand food cost basics. Training spent in this area is almost as important as training spent on guest interactions.

Here are eight areas your training must include to have the best, most consistent food produced for your guests, at the most affordable cost to your business.

1. Portion control - You must understand the portions you are giving your customers, what they expect for the price you are charging and HOW MUCH IT COSTS YOU to plate the food. Any portions you use must be measured as much as possible without slowing down your productivity. Wendy’s, for example, uses measuring cups for cheese used on salads and McDonald’s uses a special salt shaker to dispense the correct amount of salt on their French fries. There are pumps that dispense liquids in parts of an ounce that are adjustable for various products. If you must depend on sight to maintain speed of service, use visual examples as a point of reference and have a scale nearby just to occasionally double check yourself.
2. Plate or recipe cost - Now what you charge is as much supply and demand as it is the taste and quality of the food. Have a standard ingredient list and portion per plate or item. As with above, visual training aids go a long way. Add the cost of each ingredient and divide that by what you charge. This leaves your cost as a percent for that plate. You have to know what each individual item on your menu costs you in food. This information helps you balance your costs by paring a high food cost item with a low food cost item giving your guests a better perceived value and lower your overall food cost.
3. Waste records- You simply cannot control your food cost if you don't know what is being thrown in the trash. Use clear trash bags in your kitchen or commissary if you are not the only one doing prep. This way you can see what is going out the back door. You also must account for mistakes, returns and dropped foods. A waste budget is a must. Tracking and accountability for your prep teams and yourself if you work alone. Remember to account for the yield of a product, meaning the useable portion of an individual product. Take tomatoes for example, you purchase a 25-pound case for $20.00. You will not get 25 pounds of usable tomatoes. Even they are perfect you will not use the core and perhaps not even the top and bottom slices that are mostly skin. Most likely you will have 23 to 24 pounds you can use. Turning the 80 cents per pound into 87 cents. Now imagine trying to figure out how your food cost is higher than your recipes and sales mix say it should be when you have not taken into account the adjusted priced based on the case or item yield.
4. Accurate Sales Mix- This comes from your POS system. A sales mix will tell you how many of each product you sell. A restaurant POS will also tell you how much your food cost should be if every products cost is correctly programmed in and every detail modifiable for your staff. For example, if you ring a hot dog can you add mustard? If you have a plate containing meat, starch and vegetable can your staff via the POS communicate a substitute to the kitchen? Every morsel of food must be tracked in some manner. Every possible substitution, add on and take off must have a way to be tracked. If not, you will never achieve your goal food cost.  If your POS system is not capable of recording each individual item you sell, GET ONE. The investment in one and its proper programming. Proper use will pay for itself in no time.
5. Reality Based Par Stock- A Par Stock is simply a list of each ingredient and how many it takes to hit a certain sales level. For example, if your sales mix shows you sold 300 pounds of ribs divide this into your sales. Let's say $27000. That leaves 90. What that means is for every $90 in sales you are selling 1 pound of ribs on average. This makes ordering much simpler. If you have enough historical data (and you should) you can project your next week or month’s sales. Once you factor in local events and your marketing efforts that could impact sales, you make a judgment call on your projected sales. Let’s say you project $30,000 for the coming week. That means based on our figures above you would need 333 pounds of ribs. ($30,000 divided by $90) Now look at your inventory to see what you have in stock. If you have 25 pounds in stock you would need 308 pounds to cover the sales you project. You would order the closest amount of cases that exceeds that number. Do that for every product you have on inventory even the seasonings. This will also help you notice a food cost problem before you actually take a physical inventory. One restaurant I know about consistently used 800 packets of ketchup between orders. One week it became apparent they would need a second case before the next order. The manager quickly ran a sales report and determined no increase in sales or sales mix change would account for the excessive use in packets. After a slight investigation he found an employee was passing out handfuls when a guest asked for ketchup, rather than following training and asking, “will two be enough?”
6. Have a sales projection based on reality- This number requires the most thought and must be based on real sales otherwise you will have too much or too little food. You can build in buffers for coupons, sales, advertising or anything else you think will impact sales. Likewise think about negatives to sales such as weather, seasonal changes, events that pull people away from your restaurant location or anything else that impacts you.
7. Shop vendors, order and receive- Look for deals without compromising quality. Order what your build to requires, remembering to take away anything on hand. Make sure you or a trusted employee checks in the order to make sure you get everything on the invoice. Spot check cases for quality, weight and delivery temperature. If you get lots of produce look at every single case and dig down to the bottom. Refuse anything that does not meet your standards and if possible require the supplier to return with acceptable products or risk losing your business.
8. Train and coach your entire staff- This is an ongoing effort in controlling food cost. Include your serving staff as well, they can impact your food cost and overall profitability. Teach your kitchen portion control, HACCP procedures and of course, waste control and how to track it. Bonus your kitchen staff on food cost and waste budget. Teach your wait staff suggestive selling and what to add to certain meals to balance the guest experience as well as improve overall food cost. Bonus your wait staff on desert or any other add on you have on your menu that helps to lower your food cost.

Work every day at these tips and watch your costs steadily come down.
 
 
 

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