When you’re in the restaurant industry it’s not unlikely for your main products to also be your biggest financial drain. That's because without practicing food cost control methods at your restaurant, it is very easy to start slipping into the red.
So where should you begin?
A few small changes in your restaurant, such as managing inventory, controlling portions in the kitchen, calculating food costs regularly, and pricing your menu correctly can have a massive impact on your finances.
Read on to learn how to lower and control your restaurant’s food cost.
What Causes High Food Cost
You might have noticed that your restaurant isn't as profitable as it used to be. This could be for a number of reasons, but when it comes to restaurants, it's most likely high food cost.
Here are 7 potential causes of high food cost at your restaurant.
- Your menu doesn't evenly disperse high and low cost ingredient dishes.
- Employees are stealing.
- Not portion controlling dishes.
- Not making use of all your food.
- Improperly trained staff.
- Poor restaurant accounting.
- Sourcing your ingredients from only one vendor.
- Not routinely calculating food cost of each dish.
How to Lower and Control Food Cost?
Now that you have learned what causes high food cost at your restaurant, here are a few ways to lower food cost as quickly as possible.
When trying to manage food cost at your restaurant, one of the most important things you should be doing is regular inventory checks. It is very easy to lose track of where all your inventory is going, especially in a busy restaurant, and conducting routine audits plays a big role into understanding food cost and waste.
Restaurants should aim to check inventory at least once a week, this tells you which items are selling better than others. Giving you the ability to control how much you order of each item, avoiding food spoiling from lack of use.
More work in the kitchen
When you’re running a busy restaurant, your staff probably don’t have the time to do prep work before busy shifts, and with pre-prepared food costing so much, its difficult to strike a balance.
As tempting as it might be to purchase prepared food such as cut chicken or pre-chopped lettuce, instead try to purchase the raw ingredients and prepare them in house.
Sometimes quantity over quality
Not every dish on the menu needs to use the highest grade ingredients. If one of your dishes requires tomatoes for a homemade salsa, does it matter if the tomatoes are high quality or not? Probably not, so instead save that extra cash and put it towards dishes that actually require high quality ingredients.
Track food waste
Food can go to waste in a number of ways at a restaurant. Sometimes food gets returned because it was wrong or prepared incorrectly, and sometimes food gets spilled or burned.
Keeping track of all these forms of food waste will help you better understand not only your inventory trends but also food cost as a percentage of waste. This gives you the opportunity to come up with waste prevention solutions to remedy these costs.
Portion control isn’t just for the guests in the front of house, but also for your kitchen staff in the back. A little extra food on each plate might seem like nothing, but when you are serving 100+ plates per day, this really starts to add up.
Come up with a system to standardize your portions, in the long run your customers will not notice the change but your wallet definitely will.
Your restaurant could be losing the most money in the last place you’d expect, from your menu prices. If you haven’t conducted proper food costing calculation, you wont have a benchmark from which you can set the price. How to determine profitable menu prices.
Once you understand the cost of each dish you can begin to assess the profit margin and make decisions about pricing points that will ultimately generate a higher profit per dish.
You can use our free excel food cost calculator to help you calculate the cost of each of your dishes.
Constantly seek better pricing
Regardless of whether or not you are in a contract with a vendor or just plain happy with your supplier, always seek for better pricing. One vendor might charge you a certain price for produce, the other might undercut them just to get your business. Either way it is money saved for your restaurant.