3 levers to optimize your material costs in the face of inflation

Faced with inflation, how can you regain margin points without increasing prices, which could have a direct impact on your store's traffic?

Brice Konda

Brice Konda


May 2022

3 levers for optimising food costs in the catering industry
In this article :


Delays in deliveries, unavailable references, constant changes in the cost of raw materials, the pressure on supplies requires unprecedented reactivity! Stock management has become extremely complex. Only the best structured players are able to control their food costs with these constant changes. So what can be done?

Brice Konda, co-founder of Inpulse, the platform that is revolutionising stock management and supplier orders thanks to artificial intelligence, shares his advice for optimising your food costs. The objective: to regain margin points without increasing prices, which could have a direct impact on your store's traffic.

#1 - Focus on menu engineering

Volatility is such that some restaurateurs change prices once or twice a week on dozens of references. In addition to the need to change prices quickly to replace missing or expensive references, it is necessary to continue to control material ratios and quickly identify where margins are being lost.

In the short term, it is about being agile while maintaining control of your profitability through what is known as "menu engineering". Making informed choices to revise or adjust recipes, determining the most profitable and popular dishes to promote or substitute for others.

In thelong term, for restaurant chains, it is a question of preparing for centralised purchasing negotiations, which may prove to be complicated. We are in a particular context where the prices negotiated by the centrals are no longer respected. The quality and simplified access to the network's purchasing data can make the difference in the next exchanges with suppliers.

#2 - Anticipating disruptions and avoiding losses: relying on data, not intuition, in times of economic contraction

Placing the right supplier orders is far from easy and yet many players continue to do it by intuition. We have developed Inpulse to meet three challenges: to forecast future sales as accurately as possible, to order just what is needed, and to access all the performance indicators in real time (necessary in the field and at headquarters to control food costs). The key word? Precision.

By automating the material value chain, costly mistakes can be avoided. To order the right quantity, you have to take into account all the parameters: forecasts, recipes, stock levels, shelf life and conditions of each supplier. This is our core business: using artificial intelligence to accurately forecast future sales and combining all these factors to ensure efficient just-in-time supply.

Today, some catering professionals, who have sufficient storage capacity, use Inpulse by adding additional quantities to the tool's recommendations in order to manage a buffer stock of raw materials that they consider to be at risk. This allows them to continue to anticipate shortages and limit losses by reaching an optimal stock level given the current situation.


#3 - Measure performance in real time to react immediately

The centralisation of data is essential to allow decision-makers to focus on analysis and to effectively manage the performance of their network.

There are two key performance indicators that should be monitored regularly to quickly identify margin losses: food cost and its evolution, and the analysis of the differences between actual and theoretical consumption.

In order to effectively monitor food costs, regular inventory feedback should be implemented. We recommend that a partial inventory be taken every week on particularly expensive products to identify over-consumption of raw materials. These inventory reports, coupled with real-time stock movements, allow for a detailed analysis of losses, a visualization of discrepancies and the detection of anomalies directly at the source.

Then, with the teams, define the standards to be respected and encourage the operational staff in the field to be more rigorous in reporting losses. You will then be able to reduce these anomalies which have a strong impact on the margin day after day. Is it an overdose? Are they unreported losses? Access to the history of all sales and stock data allows you to compare, over time, the evolution of losses and to suggest improvements.

Let's take the example of not respecting technical sheets. When a cook has been hired for a long time, you can count on his or her experience, but when you are growing, you have to quickly get the teams on board and be able to rectify the situation in the first few weeks. Especially when salmon can increase by 22% in one month, the loss of profit from a 3g consumption difference per sushi represents 261 euros over a thousand trays... Over an entire network, you can quickly see the impact on the cost of materials!

If inflation becomes structural, as some experts fear, this is the time to prepare for future challenges with data.

During the last webinar I hosted with channel founders, we talked about these issues of overconsumption and their impact on the margin, here is an excerpt below. For see the full replay, it's here.

Inpulse helps restaurant chains, theme corners, bakeries and dark kitchens optimize their material costs. Our clients Inpulse's solutions can help them gain up to 5 points of margin after a few months of use. Ask for a meeting with an expert to find out what Inpulse can do for you.

To go further

More than 2,000 restaurants and points of sale use Inpulse every day