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This blog supplements our Resource Center content.  We hope you visit often to learn more about how back office software can help your restaurant optimize food and labor costs and minimize waste.

2 Tips for Better Food Cost Management

Posted on Wed, April 18, 2012

Achieving better food cost management in a restaurant chain is simple, but it's not easy. It's a little like getting in shape; to do that, all you have to do is eat less and exercise more. Of course having a plan helps... a lot. In that spirit, following are two simple things operators can do to achieve better food cost management.

1. Don’t Guess…KNOW!!

Don’t guess about how much food to prep. Over-prepping leads to excess inventory and waste, which turns into higher food costs. Under-prepping can cause stress as supplies run short, and may spur an emergency production run, which often creates too much food that subsequently turns to waste!

Veteran managers may be tempted to "go with their gut" when deciding how much to prepare, but experience shows it's better to do detailed production planning by creating a forecast based on historical data, and to do so every day. With the proper tools it can be done quickly, and the payoff is substantial.

2. Track Waste

Knowing what ends up in the trash is worth as much as knowing what ends up on a plate. When food costs are too high, the goal is to determine if the cause is:

  • Prices paid
  • Data error (like inaccurate receiving or invoicing)
  • Operational error (like improper recipe prep, portioning, and WASTE)

Accurate waste tracking either tells the manager waste is a problem, or allows her to quickly zero in on other operational issues, in both cases saving time and money.

However, accounting for wasted recipes (vs. individual ingredients) can be tricky. For example, if someone drops a container holding 12 servings of chicken soup, there are three options:

  1. Look up the recipe for chicken soup, determine the amount of each ingredient in 12 servings, and record each amount as individually wasted product.
  2. Don't record it
  3. Use a specialized spreadsheet, or resturant inventory software that "knows" the ingredients in 12 servings of soup, and simply enter,  "12 servings of chicken soup" as waste. The system will automatically deduct the correct amount of individual ingredients from inventory, and mark it as wasted.

Important: Because the third option is easy, it's likely to get done in the fast paced environment of a restaurant. The second option is easier still (and quite popular) but it won't help with food cost management.

These two steps aren't a lot more complicated than eating less and exercising more... simply prepare a production plan and keep track of what's wasted, every day, and you've taken two major strides towards better food cost management.

Got a tip on controlling food costs? Share it in the comments section.

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