Controlling Food Costs

PURCHASING & RECEIVING OPPORTUNITIES

1. FOOD COST TARGET
As an operator you should know what the costs are for every menu item. Plan the menu so that there is a mix of lower cost menu items to offset higher ones, without sacrificing overall quality.

* Design every menu item with a standard recipe. Recipes should detail all
ingredients, cooking method, plating procedures and portion sizes.

* Incorporate a range of items so there are a mix of high-margin and perceived
high-value menu items.

* Cost recipe ingredients to deliver a targeted profit. Substituting ingredients
is not recommended, since it changes food costs and the flavor consistency
regular customers expect.

REMEMBER THESE INVENTORY
AND COSTING TIPS TO GET THE
BEST PROFIT DOLLARS.

1. Know your Food Cost Target and
calculate the individual recipe
cost based on each ingredient.
Every item needs to deliver the
best gross profit possible.

2. Establish Purchase Specifications
for all products. Selection should
be made based on multi-use,
yield, quality and price. Establish
inventory levels based on business
volume and seasonal adjustments.

3. Review Product Orders
periodically to make menu
adjustments, keep costs and
inventory in line, and stay current
with new product developments.

4. Work with your sales rep to
optimize food costs and manage
your menu effectively.



2. PURCHASE SPECIFICATIONS
Purchase specifications (specs) help operator and TM confirm that the products/ ingredients ordered match the calculated recipe price.

* Adjust or write a spec to avoid using a product for only one menu item. Select
items based on performance, multi menu use and labor requirements.

* Detail all aspects of the product: Name / Item # / Case Pack / Unit of Purchase (Volume /Lb.) / Storage Type (Dry/Frozen) & Special Considerations. The actual item food cost per serving can be calculated based on the recipe.

* Establish ideal inventory or “Par-Level” based on average weekly sales volume. This helps prevent over ordering and potential loss through spoilage or employee theft.

* Avoid under ordering. Many times when a product or ingredient is short and replaced with a substitute, this may change the menu item—often at a higher cost.

3. BRING IDEAL & ACTUAL COSTS IN LINE
* Have an employee receive and check incoming inventory with order sheets. This should be confirmed against the order and existing inventory and used to adjust the required inventory levels. Shelf inventory impacts cash flow, potential spoilage and product usage.

* Use an optimal price and lock in regular deliveries, with vendor-negotiated long-term contracts on high-cost or high volume items.

* Identify products that have seasonal price fluctuations. Work with the customer to plan product purchases or menu changes well in advance.