As anyone who shops in the grocery store knows, the cost of food has been steadily rising for a few years now. The recent economic downturn has slowed that trend somewhat, but the reality is that everyone in the food service industry is dealing with rising food costs, and they will be for the foreseeable future as well.
So what should you do to manage these rising food costs in a time when customers more than ever expect high quality and low prices when they go out to eat?
Here are some strategies to help you cope:
Leverage your buying power. Your restaurant goes through a lot of food and ingredients. And every month a large chunk of your budget goes to suppliers who keep your walk-ins stocked. That chunk of money is the core expense in your business, and the most important one besides payroll. The upside to this is because you spend so much with food suppliers, that makes you an important customer to them, and important customers should be able to get deals and other perks from their suppliers.
The best place to start is to consolidate your food suppliers whenever possible. The more you spend each month with a single company, the more leverage you will have in negotiating discounts. If you can get a comparable product from a single company without sacrificing quality, than by all means go with as few suppliers as possible.
Next, buy products in bulk whenever possible. Hopefully you already invested in adequate walk-in freezer and refrigerator space before the downturn. Buying core products and ingredients in bulk gives you access to deeper discounts, but this is only possible with plenty of walk-in space. Even if you are short on storage space, seriously consider investing as soon as possible. Over the long term this investment will pay off handsomely in savings when you buy bulk product.
Work over your menu. As food prices for some products rise, others fall or stay the same. At the same time, some items on your menu sell well while others decline. Constantly evaluation will reveal which menu items are making you money and which are not. Of course, you will always have core items that define your restaurant, but many fringe items can be changed and chopped as needed until you find a combination that works.
The cost to produce a menu item should be a major factor in this decision. High dollar entrees may bolster your servers’ check averages, but if the margin in that entrée is small because of expensive ingredients, then you’re not doing yourself much good. It may make sense to focus on less expensive items (especially when customers are looking for values!) that have a higher profit margin for you. Alternatively, you can take existing menu items and interchange ingredients that don’t compromise quality but do make the entrée more affordable for you and your customer.
Finally, be sure to take advantage of seasonal deals. Many ingredients can be purchased in bulk during seasonal peaks in production at a discount. Once you buy a seasonal product in bulk, get creative with different ways to work it into your menu. No matter what, your menu should never be a sacred cow. Constant tweaking and experimenting is vital to helping you find the perfect combination.
Manage portions. Every recipe calls for specific amounts of multiple ingredients. In a bustling kitchen at the peak of the dinner rush, those portion amounts often get more and more generous. This is costing you money.
Take the time to train kitchen staff on correct portions and enable them to take the time to measure portions correctly every time. A portion scale is also a vital piece of equipment to help you control portions. The training process should be ongoing, and taking the time to train and enforce quality control on portioning can translate into significant savings over time.
In fact, all of these strategies have a cumulative effect, and if implemented properly, can really benefit your restaurant’s bottom line over time.