What’s wrong with my food cost?
30 to 40% of your costs as a restaurant/foodservice operator / chain operator are related to the costs of goods you purchase to run your business.
If you can, raise your sales prices. That’s an easy answer to food costs’ problems. But with the competitive landscape, probably easier to say than to do!
In addition, “work” on your cost of goods… 3 buckets:
1/ Upstream: your menus, recipes and specifications drive your costs.
Some ingredients are cheaper than others, ingredients come in different grades / brands. Situations vary based on time of the year, weather, world market status…
Menuing, trends tracking and pro-active thinking are key.
2/ Downstream: your ability to get the best deals from distributors, manufacturers and service providers.
Supply chain negotiations will be driven by performance, volume, opportunity, benchmarks, competitive process…
Continuous improvement mentality, controls over what you negotiate and “tough but fair” attitude are key.
3/ Instream: your organization’s ability to execute
Management of the operations to deliver an experience will come from multiple details. Your people, tools, systems and processes will set you apart.
Execution of recipes, portion control and waste/recycling management are key.
Most organizations can’t afford to have, on staff, the people who master all this. Consultants can assist on a short term or longer term basis.
It’s often free to get a diagnosis. Some will even offer you a performance model, based on the savings they generated.
As CEO, COO or Senior Executive, you are committed to your stakeholders, investors, employees, customers to make sure you put the best offer / value on the table.