Planning a Menu

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1 MENU PLANNING From design to evaluation

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Planning a Menu

Transcript of Planning a Menu

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MENU PLANNING

From design to evaluation

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Rationale

Everything starts with the menu. The menu dictates much about how your operation will be organized and managed, the extent to which it meet its goals, and even how the building itself - certainly the interior - should be designed and constructed.

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Objectives

To explain the importance of a menu To explain the basic rules of menu planning To identify factors to be considered when

planning a menu To identify constraints in menu planning To plan and write a menu

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Must Satisfy Guest Expectations

Reflect your guests’ tastes Reflect your guests’ food preferences Ascertain your guests’ needs

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Must attain Marketing Objectives

Locations Times Prices Quality Specific food items

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Must help to achieve Quality Objectives

Quality standards: flavor, texture, color, shape, flair, consistency, palatability, visual appeal, aromatic apparel, temperature

Nutritional concerns: low-fat, high-fiber diets, vegetarian

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Must be Cost-Effective

Commercial

financial restraints

profit objectives Institutional

minimizing costs

operational budget

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Must be Accurate

Truth-in-menu laws exist in some localities,

cannot mislabel a product “butter” must use butter not margarine “fresh” must be fresh, not fresh frozen “homemade” not purchased “ready-to-heat” “USDA Choice” actually “USDA Good”

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Menu Planning Constraints

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Facility Layout/Design and Equipment

Space Equipment available Work flow Efficiency

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Available Labor

Number of Employees Required Skills Training Programs

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Ingredients

Standard recipe Availability of the

ingredients required during the life span of the menu

Seasonal ingredients Cost Miscellaneous cost

(flight charges, storage)

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Marketing Implications

Social needs Physiological needs Type of service

(fast food, leisure dinning) Festival Nutrition

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Quality Levels and Costs

Guests’ expectation Employees’ skills and knowledge Availability of equipment Specific ingredients Food costs and selling prices

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The Menu and the Food Service Operation

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The Menu Helps to Determine Staff Needs

Variety and complexity increases, number of personnel increases Production staff Service staff Back-of-house staff

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The Menu Dictates Production and Service Equipment Needs

Tableside service carving utensils, trolleys,

gueridon, salad bowls, suzette pans, souffle dishes, soup tureens, large wooden salad bowl, rechaud, Voiture (heated cart for serving roasts) and ......

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The Menu Dictates Dining Space

A take-out sandwich or pizza operation would require no dining space and the amount of square feet required per person would be minimal.

On the other hand, if a restaurant offers a huge salad buffet, dessert selection or an after-dinner trolley, wide aisles would be needed to allow guests ease of movement and moving of equipment.

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Purchase Specifications May Be Dictated By The Menu

If the menu offers such items as USDA Choice New York strip steaks, quarter-pound lean beef burgers, grade AA eggs, freshly squeezed Florida orange juice, or vine-ripened tomatoes, back -of-house procedures will not only include receiving, storing, issuing, and producing the menu items but also purchasing the specific products described. (When such factors as grade and portion size are not dictated by the menu, managers and chefs must determine purchase specifications and related quality factors.)

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How and When Items Must Be Prepared

To stimulate guest interest, the menu planner may offer a dish prepared in a variety of ways: Cooking methods Poached, broiled, batter-dipped, deep fried

The finished product must be prepared using the method indicated on the menu

Small quantities cooking (a la carte) Batch cooking

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The Menu is a Factor in the Development of Cost Control Procedures

As the menu requires more expensive food items and more extensive labor or capital (equipment) needs, the property’s overall expenses and the procedures to control them will reflect these increased cost.

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The Menu and the Service Plan

Type and size of dinnerware Types of flatware Garnishes (place be service or production staff) Timing requirement for ordering Additional dining service supplies to serve the item Special serving produces Special information (doneness of the steaks, over

easy or sunny side eggs, etc.)

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Menu Design

First impression is always important, the entire menu should complement the operation- Theme- Interior Decor- Design (Merchandising)- Creativity- Material- Color- Space

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Menu Design

- Type style and/or lettering- Names of food items- Description- Popular items are at the top of a list- Clip-ons, inserts (daily specials)- Operations address- Beverage service notice- Separate menus for each meal period- Separate menu for host/hostess and guests

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Menu Styles

A table d'hôte (a complete meal for one price) A la Carte (items are listed and priced separately) Combination (combination of the table d'hôte and a

la carte pricing styles) Fixed menus: a single menus for several months Cycle menus: designed to provide variety for guests

who eat at an operation frequently - or even daily

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Types Of Menus

Breakfast(offers fruits, juices, eggs, cereals, pancakes, waffles, and breakfast meats)

Lunch(features sandwiches, soups, salads, specials; usually lighter than dinner menu items)

Dinner(more elaborate, steaks, roasts, chicken, sea food and pasta; wines, cocktails, etc..)

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Types Of Menus - Specialty

Children’s Senior citizens’ Alcoholic beverage Dessert Room service Take-out Banquet California (breakfast, lunch and dinner menu items on one

menu) Ethnic

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Basic Rules Of Menu Planning

Know your guest

- Food preference

- Price

- Age

Know your operation

- Theme or cuisine

- Equipment

- Personnel

- Quality standards

- Budget

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Selecting Menu Items

Menu category:Appetizers SaladsEntreesStarch items (potatoes, rice, pasta)Vegetables DessertsBeverages

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Common Sources For Menu Item Recipes

Old menus Books Trade magazines Cookbooks for the

home market

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Menu Balance

Business balance- balance between food cost, menu prices, popularity of items, financial and marketing considerations

Aesthetic balance- colors, textures, flavors of food

Nutritional balance

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Elements Of Menu Copy

Headings- Appetizers- Soups- Entrees

Sub-heading- Under entree: Steak, seafood, today’s specials

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Elements Of Menu Copy

Descriptive copy (describe the menu items)

- should be believable and made in short, easy-to-read sentences

- no description is needed for self-explanatory item. i.e. Low Fat Milk

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Truth-in-menu

Grading (foods are graded by size, quality, in line with official standards)

“Freshness” (cannot be canned, frozen or fresh-frozen) Geographical origin (cannot make false claims about

the origin of a product) Preparation (if the menu says baked, it cannot be fried

instead) Dietary or nutrition claims (supportable by scientific

data)

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Supplemental Merchandising Copy

Includes information such as: Address Telephone number Days and hours of operation Meals served Reservations and payment policies History of the restaurant A statement about management’s commitment to

guest service

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Menu Layout

Sequence: Appetizers, soups, entrees, desserts

Depends on the operation (side orders, salads, sandwiches, beverages)

Depends on popularity and profitability

Placement: artworks; space; boxes; clip-on; etc.

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Menu Layout

Format: Menu’s size General makeupTypeface: Printed letters Font size Type face

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Menu Layout

Artwork: Drawings, photographs, decorative patterns,

bordersPaper: Texture Cover: Color Texture

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Common Menu-design Mistakes

Menu is too small Type is too small No descriptive copy Every item treated the same Some of the operations’ food and beverages are not listed Clip-on problems Basic information about the property and its policies are

not included Blank pages

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Evaluating Menus

Must set standards Determine how menu is helping to meet

standards

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Menu Evaluation: Questions Most Often Asked

Is the menu attractive? Do the colors and other design elements match the

operation’s theme and decor? Are menu items laid out in an attractive and logical

way? Is there too much descriptive copy? Not enough? Is the

copy easy to understand? Is attention called to the items managers most want to

sell, through placement, color, description, type size, etc.?

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Menu Evaluation: Questions Most Often Asked

Have guests complained about the menu? Have guests said good things about the menu? How does the menu compare with the menus of

competitors? Has the average guest check remained steady or

increased? Is there enough variety in menu items? Are menu items priced correctly? Are you selling the right mix of high-profit and low-profit

items?

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Menu Evaluation: Questions Most Often Asked

Is the typeface easy to read and appropriate to the restaurant’s theme and decor?

Is the paper attractive and stain-resistant?

Have the menus been easy to maintain so that guests always receive a clean, attractive menu?

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Menu Pricing

SUBJECTIVE PRICING: The reasonable price method: from the guest’s

perspective - what charge is fair and equitable The highest price method: sets the highest price that

the manager thinks guests are willing to pay The loss lender price method: an unusually low

price is set for an item to attract guests The intuitive price method: takes a wild guest,

trail-and-error

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Menu Pricing

DESIRED FOOD COST PERCENTAGE PRICING METHOD:

manager determines a reasonable food cost percent then divides a menu item’s standard food cost by its

reasonable food cost percent

Selling price = $1.50 (item’s standard food cost) = $4.55

0.33 (desired food cost percent)

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Menu Pricing

PROFIT PRICING:

factors profit requirements and non-food expenses into menu item selling prices

Allowable = $300,000 - $189,000 - $15,000 = $96.000

food costs (forecasted (non-food (profit

food sales) expenses) requirements)

Budgeted food cost % = $96,000 (allowable food costs) = 0.32 or 32%

$300,000 (forecasted food sales)

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Menu Pricing

COMPETITION AND PRICING: Know competitor’s menus, selling prices, and guest

preferences Lower your prices Raise your prices Elasticity of demand:

Elastic: price change creates a larger % in the quantity demanded (prices-sensitive)Inelastic: the % change in quantity demanded is less than the % change in price

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The Menu:The Foundation For Control

GUEST SATISFACTION

SERVING

HOLDING

COOKING

PREPARING

ISSUING

STORING

RECEIVING

PURCHASING

MENU PLANNING

PRODUCTION ACTIVITIES

BASIC OPERATING ACTIVITIES: CONTROL POINTS

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The Menu Influences

Product Control Procedures

every item on the menu represents a product to be controlled Cost Control Procedures

careful cost control procedures must be followed, particularly when expensive products and labor-intensive service styles are used

Production Requirement

product quality, staff productivity and skills, timing and scheduling, and other back-of-the-house functions are all dictated by the menu

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The Menu Influences

Equipment Needsequipment must be available to prepare products required by the menu

Sanitation Management management must consider menu items in light of possible

sanitation hazards Layout and Space Requirements

the physical space within which food production and service take place - must be adequate for purchasing, receiving, storing, issuing, producing, and serving every item on the menu

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The Menu Influences

Staffing Needsas menu becomes more complex, greater demands may be placed upon the staff

Service Requirementsthe menu affects the skill levels required for service personnel, along with equipment, inventory, and facilities needed in the front of the house

Sales Income Control Procedureselaborate menus require more stringent controls than simple menus

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Menu Planning

is also.. A Tool for:

Saleslists the items an operation is offering for sale

Advertisingcommunicates a property’s food and beverage marketing plans

Merchandisingtarget market expectations - products, service, ambience (theme and atmosphere), perceived value

Marketing Toolstrive to meet or exceed the expectations of its target market

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Nutritional Content

Priority Concerns of menu Planner

Wants and needs

Concept of Value

Item Price

Object of Property Visit

Socio-Economic Factors

Demographic Concerns

Ethnic Factors

Religious Factors

Guest

Quality of Item

Cost

Availability

Peak Volume Productionand Operating Concerns

Sanitation Concerns

Layout Concerns

Equipment Concerns

Flavour

Consistency

Texture/Form/Shape

Visual Appeal

Aromatic Appeal

Temperature

Priority Concerns Of The Menu Planner

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Menu Planning Strategies

Rationalizationits objective is simplification for the sake of operational efficiencyi.e., cross-utilization menu items use the same raw ingredients

- Menu when carefully plan can be a streamlining of the purchasing, receiving, storing, issuing, production, and serving control points.

- High-quality convenience foods make it easier to offer new items without having to buy additional raw ingredients

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Factors That Influence Menu Planning Strategies

Needs and wants of target markets Several items from same ingredients Storage requirements Personnel skill levels Product availability / seasonality Quality and price stability Sanitation procedures

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External Factors That Influence Menu Changes

Consumer Demands

decide which potential markets wants to attract Economic Conditions

cost of ingredients, potential profitability of new menu items Competition

many not want to serve next door’s best Supply Levels

seasonal items, price to the quality and quantity Industry Trends

industry’s response to new demands

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Internal Factors That Influence Menu Changes

Facility Meal Patternsexisting meal periods - breakfast, lunch and dinner

Concept and Themethe image may rule out certain foods that do not blend with its theme and decor

Operational Systemcosts for new equipment to the successful production and service of new menu items

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Pricing Approaches

Subjective Price Methodsintuition and knowing your guests (failed to relate profit and costs)

The Reasonable Price Methodspresumes value to the guest (what charge is fair and equitable)

The Highest Price Methodsets the highest price the guests are willing to pay

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Pricing Approaches

The Loss Leader Method

an unusually low price is set for an item (or items) to bring guests in

The Intuitive Price Method

wild guess about the selling price

(pricing methods based on assumptions, hunches and guesses)

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Pricing Approaches

Simple Mark-up Pricing Methodsdesigned to cover all costs and to yield the desired profit.Three Steps:1. Determine the ingredients’ costs

2. Determine the multiplier

3. Establish a base selling price

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Multiplier

If food cost is to be 40%

Multiplier = 1 / desired food cost%

= 1 / .40

= 2.5

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Base Selling Price

If ingredient cost is $3.32

Base Selling Price = Ingredient Cost x Multiplier

$8.30 = $3.32 x 2.5

A base selling price in not necessarily the final selling price

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Prime-Ingredient Mark-Up Method

Base selling price = Prime Ingredient Cost x Multiplier

$8.30 = $1.59 x 5.22

or food cost is about 19%

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Mark-Up with Accompaniment Costs

Entree / Primary Costs $3.15

Plate Cost +$1.25

Food Cost $4.40

Mark-Up Multiplier x 3.3 (30% food cost)

Base Selling Price $14.52

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Determining the Price Multiplier

Based upon: experience or “rule of thumb” contribution margin impact of sales mix does not reflect higher or lower labor cost assume food cost associated with producing menu

item are know

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Contribution Margin Pricing Method

Contribution Margin refers to the amount left after a menu item’s food cost is subtracted from its selling price.

Two steps in setting base selling price:

1. Determine the average contribution margin required per guest

Non-Food + Required Profit = Ave. Contribution Margin Required/guest

No. of Expected guests

$295,000 + $24,000 = $3.75

85,000

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Contribution Margin Pricing Method

2. Determine the base selling price for a menu item

Base selling price = average contribution margin + Standard food cost

$7.35 = $3.75 + $3.60

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Ratio Pricing Method

The ratio pricing method determines the relationship between food costs and all non-food costs plus profit requirements and uses this ratio to develop base selling price for menu items.Three steps

1. Determine the ration of food costs to all other cost plus profit requirementsAll non-food costs + Required profit = Ratio

Food costs

$160,000 + $21,000 = 1.34 $135,000

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Ratio Pricing Method

2. Calculate the amount of non-food cost and profit required for a menu item

Non-food cost and profit required = Standard food cost x ratio

$5.03 = $3.75 x 1.34

3. Determine the base selling price for the menu item Base Selling Price = Non-food cost and profit required + Standard food

cost

$8.78 = $5.03 + $3.75

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Simple Prime Costs Method

The term prime cost refers to the most significant costs in a food service operation: food, beverage and labor.

A simple prime costs pricing method involves assessing the labor costs for the food service operation and factoring these costs into the pricing equation.Three steps:1. Determine the labor costs per guest

Labour Cost per guest = Labour costs / No. of expected guests

$2.80 = $210,000 / 75,000

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Simple Prime Costs Method

2. Determine the prime costs per guest Prime Cost per guest = Labour cost per guest + menu item’s food cost

$6.55 = $2.80 + $3.75

3. Determine base selling price

Base Selling Price = Prime costs Per guest Desired Prime Costs%

$10.56 = $6.55 / 0.62

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Specific Prime Cost Method

Specific Prime Cost Method - develops mark-ups for menu items so that the base selling prices for the items cover their fair share of labor costs.

Divide the menu items into 2 categories:

(A) extensive preparation

(B) non extensive preparation clean up, and other non-preparation activities

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Specific Prime Cost Method

Allocates appropriate % of total food costs and labor costs to each category

(A) 60% of the total food cost

(B) 40% of the total food cost

(A) & (B) 55% of all labor costs

45% of all labor costs is incurred for service,

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Specific Prime Cost Method - Calculations

(1) (2) (3) (4)

Food Cost35% 60% of 35% = 21% 40% of 35% = 14%

Labour Cost 30% 55% of 30% = 17% 40% of 13% = 5%

All Other Cost 20% 60% of 13% = 8% 40% of 20% = 8%

Profit 15% 60% of 15% = 9% 40% of 15% = 6%

Total 100% 67% 33%

Mark-Up 100% =2.9% 67% = 3.2 33% = 2.4Multiplier 35% 21% 14%

Operating Category A Category B Budget Item Budget % (extensive preparation) (Non-extensive Preparation)

Items Items

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Important Pricing Considerations

The Concept of Value (price relative to quality)

The Basic Law of Supply and Demand

Volume Concerns Must be Considered

Price Charged by the Competition for a similar Product

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Evaluating The Menu: Menu Engineering

Basic Menu Engineering Process:

Stars - items that are popular profitable

Plowhorses - items that are not profitable but popular

Puzzles - items that are profitable but no popular

Dogs - items that are neither profitable nor popular

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Defining Profitability

Contribution Margin

a “high” contribution margin for an individual menu item would be one that is equal to or greater than the average contribution margin

Average Contribution Margin = Total Contribution Margin

Total Number of Item Sold

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Defining Popularity

Popular Index bases upon the notion of “expected popularity”For example:4 items on a menu and each is assumed to be equally popular, the sales of each would be expected to be 25%

100% ÷ 4 = 25%Menu engineering assumes that an item is popular if its sales equal 70% of what is expected..For example:a food item is considered popular if its sales is:

25% x 70% = 17.5% of total sales

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Menu Engineering WorksheetMenu Engineering Worksheet

Date: 6/10/00 _________________ Restaurant: ____________________________ Meal Period: Dinner

(A)MenuItem

Name

(B)Number

Sold(MM)

(C)MenuMix%

(D)ItemFoodCost

(E)Item

SellingPrice

(F)ItemCM

(E - D)

(G)MenuCosts

(D x B)

(H)Menu

Revenues(E x B)

(L)MenuCM

(H - G)

(P)

CMCategory

(R)

MM%Category

(S)MenuItem

Classific-ation

ChickenDinner 420 42% $2.21 $4.95 $2.74 $928.20 $2079.00 $1150.80 Low High

Plow-horse

NY StripSteak 360 36% 4.50 8.50 4.00 1,620.00 3,060.00 1,440.00 High High Star

LobsterTail 150 15% 4.95 9.50 4.55 742.50 1,425.00 682.50 High Low Puzzle

TenderloinTips 70 7% 4.00 6.45 2.45 280.00 451.50 171.50 Low Low Dog

ColumnTotals

N1,000

l$3570.70

J$7015.50

M$3444.80

K = l / J O = M / N Q = (100%/items) (70%)

Additional Computations: 50.9% $3.44 17.5%

(Box K = Food Cost %; Box O = Average Contribution Margin)

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Improving The MenuManaging Plowhorses

Items low in contribution margin, but high in popularity Increase prices carefully Test for demand Relocate the item to a lower profile on the menu Shift demand to more desirable items Combine with lower cost products Assess the direct labor factor Consider portion reduction

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Improving The MenuManaging Puzzles

Items high in contribution margin but low in popular

Shift demand to these items Consider a price decrease Add value to the item

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Improving The MenuManaging Stars

Items high in contribution margin and high in popularity

Maintain rigid specifications Place in a highly visible location on the menu Test for selling price inelasticity Use suggestive selling techniques

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Improving The MenuManaging Dogs

Items that are low in contribution margin and low in popularity:

Candidates for removal from the menu