How to use the Menu Engineering to cope with inflation?

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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?

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It will be necessary to position each plate in this table with 4 boxes:

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Engineering Menu Process

Let's make an example together using these two dishes:

• a Pizza Margherita
• a Cheeseburger

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)

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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.

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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 in your menu! You can opt for the digitalization of your menu with Zenchef or Tastycloud, or put them in front of your interactive ordering terminals with Tabesto. This is the case of 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!

1. Change your recipes without the taste! Replace some of your products with similar, alternative products that are less expensive to buy. Offer the "dish of the month" with a particularly advantageous recipe, without protein for example.
2. 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.
3. Write catchy titles! Don't hesitate to add the origins of the ingredients or the method of preparation.
4. 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.
5. Invent new recipes with an advantageous material cost. 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 an inventory management solution, directly connected to the cash register of your restaurants, which allows you to update your inventory in real time. As a result, 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.

Don't wait any longer to request your demo to see how Inpulse can help you recover margin points!