Faced with rising prices, which are very high for certain ingredients such as meat, fish and especially frozen meat, it is essential to regularly monitor the cost of each dish to limit the impact on profitability. Have you noticed that some of your dishes that were profitable yesterday are less so today?
We propose you to analyze together the existing solutions to calculate your material cost and to use the Menu Engineering method to optimize your margin in spite of the inflation.
What is Menu Engineering?
Menu Engineering is a method of studying the profitability and popularity of your restaurant's menu items. This approach consists in analyzing your material cost and your margin in order to determine the placement of the dishes in the menu and their price. Some studies show that customers are naturally attracted to certain areas, especially in the center of the menu.
As you can see, the placement of products influences the choice of consumers. This is an excellent way to increase the profits of your restaurants!
So how do you do Menu Engineering?
To begin, you should ask yourself the following two questions:
Is my plate profitable?
Is my dish often ordered by customers?
It will be necessary to position each plate in this table with 4 boxes:
Engineering Menu Process
Let's make an example together using these two dishes:
a Pizza Margherita
1) Inventory of your products
Make an inventory of your plates according to these different criteria:
The wording of the product on the card
The number of sales made through this product over a defined period
The % of popularity of the dish in your menu. The following formula can help you define it: (100 x number of sales of the dish) / (number of total sales)
The selling price of the product on the card
The material cost for the production of the dish
The unit gross margin generated by the product
The total gross margin generated over the defined period (number of sales x gross margin per unit)
2) Calculation of the popularity and profitability rate
Once this first step is done, you must define the positioning of each of your dishes (star, cash cow, enigma, dead weight). To do this, study :
The popularity rate: if the number of sales of your dish is higher or lower than the average number of sales.
The rate of return: and whether the unit gross margin is higher or lower than the average gross margin per dish on your menu.
3) Positioning of your dishes in the menu
You will then be able to create your menu by positioning the dishes according to the different categories:
The stars: popularity rate > average and profitability rate > average.Highlight these dishes on your menu! You can digitize your menu with Zenchef or Tastycloudor highlight them on your interactive ordering terminals with Tabesto. This is the case for Luks Kebab which has already chosen this solution:
"Via Inpulse's data analysis, we can notice which product has a better food cost than the other, and via Tabesto highlight them in order to customize our menu, to have the best foodcost highlighted."
Les vaches à lait : taux de popularité > moyenne et taux de rentabilité < moyenne. Proposez-les en seconde partie de menu, les clients sauront les trouver.
Les énigmes : taux de popularité< moyenne et taux de rentabilité > moyenne. Vous pouvez changer leur nom pour les rendre plus attractifs.
Les poids morts : taux de popularité < moyenne et taux de rentabilité < moyenne. Retirez ces plats de votre carte ou bien, proposez-les uniquement à des moments phares de l’année ou pour attirer la clientèle.
More expert advice to develop your Menu Engineering!
Change your recipes without the taste! Replace some of your products with similar, alternative products that are cheaper to buy. Offer the "dish of the month" with a particularly advantageous recipe, without protein for example.
List the dishes on your menu with diversified prices and not in ascending order. This will encourage the consumer to make a choice based on the product and not on the price.
Write catchy titles! Don't hesitate to add the origins of the ingredients or the method of preparation.
Set your prices according to the multiplier method and the Omnes principle. The price of your most expensive dish must be at most 2x higher than your opening range.
Invent new recipes with low material costs. Use products for which you have negotiated a good purchase price with your suppliers. This is the case of Keyvan Badri who founded Mersea:
Now, thanks to Inpulse, we have several ways to act: we can rework our purchases with our suppliers, we can rework our recipes in another way, introduce new ones. We are lucky because we have more than 80 recipes. So thanks to Inpulse, we can react very quickly and get these new recipes on the menu."
Thanks to a tool like Inpulseyou can automatically calculate your material costs based on your recipes. Inpulse is a inventory management solutiondirectly connected to your restaurants' cash registers, enabling you to update your stocks in real time. As a result, you can make decisions based on the actual material cost of your dishes. In these times of unstable prices, access to reliable data in real time means you can react quickly.
Don't wait any longer request your demo to see how Inpulse can help you recover margin points!
How to control material costs in the face of inflation?
Find out how Pitaya, Columbus, Street Bangkok and Tacos Avenue are keeping their material costs under control.