5 Ways to Reduce Food Costs in Your Restaurant

Even the most experienced chefs can find that they’re using significantly more of an ingredient than their sales would suggest, and that can point to an operational difficulty of some kind. It could be theft or a portion control issue, or it might simply be a problem of perishability and waste.

In quick-service restaurants, with a high turnover of sometimes minimally trained staff, video monitoring can help identify and prevent theft or portioning issues. In fast-casual and full-service environments, scrutinizing plates as they come across the pass, or having a manager check prep and line cooks’ waste can help identify portioning and prep issues. In fine dining restaurants, turning trimmings and other forms of food waste into new menu items in their own right is a hot trend.

Whatever the root cause, the first step in fixing it is knowing that the problem is there. To really understand actual ingredient usage compared to the expected usage based on sales, you need detailed sales information cross-referenced against your plate recipes and ingredient prices. While this is very difficult to do regularly by hand, the best restaurant management software systems will combine all this information and provide valuable reports highlighting ingredient usage issues.

4) Actively Manage Your Inventory

The complement to verifying food usage is comparing inventory against what the books show you should have on hand. Full inventories are valuable, though time-consuming, so for inventory management many restaurants choose to focus on high-volume and high-value ingredients and count those physically on a regular basis.

Verifying what’s on hand is important but only the starting point. The real value comes from analyzing what those numbers tell you. What are you ordering too much of? Too little of? How old are the prepped portions in your walk-in and how many are written off before they’re sold? The answers to those questions can have a big impact on your margins.

Also important is to use the inventory information to highlight usage issues. Ideally, your RMS will contain your detailed recipes, pull your sales figures from the POS system and incorporate your inventory counts. With all of that data combined, the system can then highlight where your usage and inventory are different than expected.

5) Don’t Forget About Restaurant Overhead

One other cost factor that can be overlooked by even seasoned chefs and restaurateurs as they get swept up in a new project is a restaurant’s overhead: lease, taxes, utility costs and so on. These don’t fall under the classic definitions of food and beverage costs, but they are important nonetheless.

Each plate you sell — or each cover if you work from a set-course menu — has to pay its share of the restaurant’s overhead. Established operators know approximately how many plates they can expect to sell in a given week, month or year. Additionally, new operators have the projections from their business plan to work from. But expectations can differ from reality. Adding a fixed amount to the cost of every dish or calculating a varying amount based on price and popularity are two ways to ensure you can cover overhead costs. Revisit those numbers at lease renewal time, or whenever you face an increase in taxes, utilities or other fixed costs.

Improvement Never Ends

The restaurant business attracts creative people, and creative people are natural problem solvers. No matter how long you’ve been operating, there will always be more to learn and new approaches to the old challenges of managing food costs and restaurant cogs.

MarginEdge’s cloud-driven restaurant management software is one of those new approaches, offering the only industry solution that fully automates the flow of invoice and sales data and combines that with a full suite of powerful food and beverage cost management tools.