Reduce Food Cost and Increase Profit Margins Using Only Your Menu

During this time in the industry, consumers and food-business owners alike are wondering the same thing: How can I reduce the amount of money I’m spending on food? According to FOX Business, a family of four spends an average of $12,744 on food each year, and that’s just groceries. Throughout the years, the percentage of meals consumed outside of the home has only increased, and it will continue to do so as long as the generations with the most buying power (ahem, Millennials) are more focused on their careers and business ventures than they are learning everyday life skills, like cooking. (No offense Millennials, we are you, we embrace you.) And while this is an amazing statistic for restaurant owners everywhere, the pressure to keep your menu interesting and diverse can be pretty intense. And COVID-19 has only turned up the heat. So when you’re trying to feed Americans who are quarantined and limiting their exposure to the outside world, how do you keep your menu diverse while keeping your costs low. Well wouldn’t you like to know 😉 (It may or may not have something to do with smart menus.)

We are all-too-familiar with the use of the term cross-posting when it comes to good social media practices, or at least we hope you’ve heard of the term. If not, cross-posting is when you have a piece of content that you share across several platforms to reach as many people as possible. In the social media marketing world, it’s a sure fire way to get a real bang for your buck, or at least the exposure you were looking for. (Hang in there with me, this gets relevant.) Now, if you can take that same concept and apply it to your menu, you would discover a way to get another cost-effective way of stretching a dollar. For the sake of this article, let’s call it’s cross-cooking.

Reducing Ingredient Diversity

If you took inventory of the ingredients in your current menu, you would find many of same ingredients used repeatedly — in different forms. Whether you’re a burger joint that’s using 5 different (yet similar) types of onions to garnish your burgers or maybe you’re a sandwich shop that prides themselves on being freaky fast. The first step in keeping your costs low is by taking an ingredient inventory and finding out what ingredients can be converted to commonly used ingredients within your menu to reduce the amount of ingredient diversity within your menu. This will allow you to simplify your orders to your suppliers and decrease your overall food spend.

foodcalc smart menus

Reducing the ingredient diversity in your menu doesn’t mean that your recipes are any less diverse.

Now we aren’t biased (ok, we totally are) but an inventory like this can easily be done through a recipe database/nutrition platform like MenuCalc. After your recipes have been entered for nutrition purposes, you can then begin to discover any overlaps within your menu. If you are finding that you use a vidalia onion for 90% of your burgers but use plain white onion for the other 10%, these recipes can be easily converted to match the other 90%, eliminating the need for a small order of white onion. During a time like COVID-19 when all restaurants are striving to simplify, it’s all about the ingredients.

Identify Best-Sellers

That’s it. Keep ’em. Enough said.

Eliminate Costly Outliers

The next step in simplifying your ingredients and reducing your costs is looking for ingredient overlaps. If 65% of your menu uses the same ingredients for different recipes, the most cost-effective way to simplify your menu would be to then temporarily eliminate the outliers. This rule (of course) does not apply to any best-sellers. Chances are, you are already using the same ingredients served up several different ways. When you have the option to roast, toast, saute, grill, and broil a clove of garlic alone, you know that your menu recipe diversity has less to do with the ingredients themselves and more to do with how they are prepared.

If you have a delectably broiled, marinated salmon sandwich on a brioche bun but it’s the only sandwich that requires brioche and the only recipe that requires salmon, give it the boot. You can create a similar sandwich with that soft-bite, sweet-charred taste profile using chicken and (most likely) another bun that is used most commonly throughout your menu.

foodcalc smart menus

Simplifying your menu can be as easy as ditching expensive ingredients that aren’t ordered as often for more commonly used ingredients.

The more expensive your menu ingredients, the higher your food cost and lower your profit margins. Unless you are a Michelin star restaurant that is known for food that appeases the most well-developed palates, it’s okay to rethink your recipes using ingredients that you are already ordering in heavy bulk. While Americans remain hungry and kitchens remain open, the needs of the restaurant and the consumer could both be met through smart menus.

And If You Feel Like Being Fancy…

Spend those saved bucks on tools that can help you save even more money on your food costs. (Here we go being biased again) MenuCalc’s mothership company, FoodCalc, has debuted just what the foodservice business ordered: smart menus. Converting your current menu to a smart menu allows you to not only take inventory of your ingredients, but you have the ability to see how your customer is interacting with them. For instance, if we go back to our onion example: say you do the work to convert your white onions to vidalia and have managed to save yourself a few pennies there. The smart menu can give you an inside look of who is removing said onion from their sandwich. If 30% of onions are removed from your burgers or sandwiches on a regular basis and a pattern emerges, your smart menu will provide you with a detailed report. And you know what that means– you’re overspending your onion order to your supplier by 30%!  Instead of crying about it (we know, corny onion joke) , you can reduce your onion order and save even more!

increase your restaurant's profit margins during covid-19

The second wave of COVID-19 doesn’t have to result in devastating loss of revenue. Your menu is the key to your success.

Having a smart menu in the new climate of the food industry left in the wake of COVID-19, allows you to understand your options and make new connections all while lowering your costs. A smart menu makes you money — far beyond just your average food sales.

Curious about smart menus? Contact us today and learn how easy (and cost-effective) it is to work smarter, not harder, with Smart Menus. 

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