In case of a strong price increase on an ingredient, if we put aside the sourcing and the negotiation with your suppliers, the menu engineering is the strategy to adopt for short term effects.
With the rising cost of raw materials, restaurants are faced with a major challenge: how to adjust their menu to maintain their margins while still offering quality dishes to their customers? Putting aside sourcing, negotiating with suppliers and increasing a la carte prices, the strategy to adopt for short-term effects is "menu engineering". Here are several ways to make "menu engineering" a weapon in the face of fluctuating raw material prices:
If the cost of raw materials for one of your dishes has risen sharply, you must first identify the ingredient responsible for the increase. Then, you can consider reducing the amount of that ingredient, but be sure to be generous with the portions. At the same time, you can potentially increase the portions of other ingredients that are more cost effective. For example, if your dish consisted of a 250g steak with mashed potatoes and grilled vegetables, you could reduce the size of the steak to 200g and slightly increase the amount of mashed potatoes and vegetables, while still keeping the presentation attractive and generous for the customer.
You can also reduce all the portions of your recipe, which would allow you to lower the price and maintain a lower material cost. This would make your product more accessible to a wider customer base, while preserving your profit margin and using your ingredients more efficiently.
Many restaurant operators negotiate with their suppliers for alternative products to reduce costs. These alternatives can be just as tasty as the standard product, or even better. For example, you could replace parmesan cheese with a less expensive alternative such as grana padano, or use dried herbs instead of fresh ones to reduce costs without compromising the taste of your recipe. By looking for cheaper alternatives, you can maintain the quality of your dish while preserving your profit margins.
By inventing new recipes with products for which you have negotiated a good purchase price with your suppliers, you can replace certain recipes and ensure your profitability.
"Thanks to Inpulse, we have managed to maintain our material cost and reduce the effects of inflation. This is largely due to the management of our menu with a real vision of costs. Before we had a general food cost, today we have a food cost per brand and per restaurant. We can make specific decisions to target actions." Matthieu Monzat, Revenue Director Street Bangkok
This recipe is particularly advantageous in terms of food cost, as it can be protein-free or composed of one or more seasonal products that are generally less expensive to purchase. You can promote it at special events or by offering regular promotions.
To set the price of your dishes, you can use the multiplier method and the Omnes principle. According to this principle, the price of your most expensive dish should not be more than 2 times the price of your least expensive dish. For example, if your opening dish is a pasta bolognese dish at 10 €, the price of your most expensive dish should not exceed 20 € (2 × 10 €).
By following this method, you could offer a fish dish, with more expensive ingredients, at a maximum price of €20. This way, you can maintain consistency in the price range of your dishes while maximizing your profitability. By pricing in this way, you can offer your customers a quality experience at reasonable prices.
For each dish, the popularity and profitability rate should be studied and positioned using the menu engineering method:
To learn more about this method, here is a article on the subject.
With a tool like Inpulseyou can automatically calculate the material cost based on your recipe cards. You can make decisions based on the real material cost of your dishes. In these times of price instability, access to reliable data in real time allows you to react quickly. To learn more, you can talk to one of our experts and book a demonstration of our solution.
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