3 Smart Strategies to Help Manage Your Restaurant’s Food Costs

Shrewd management of food costs is critical to any restaurant’s success. It won’t matter if your service and menu items are outstanding if you’re not making enough of a profit margin with the ingredients to come out on top. Fortunately, there are a number of food cost reduction strategies you can employ to reduce waste and help add some cushion to your bottom line.

Waste Management Is Crucial to Trimming Food Costs

One of the simplest, cheapest things you can do you reduce your restaurant’s food costs is to implement an effective waste management program. Some restaurants do this by using tracking software that weighs everything out, keeps tabs on the inventory in use and tracks the amount of waste being produced. Others do this by not letting any little scrap go to waste. For instance: citrus skins can become marmalade, piths can become lemon cream, pits of peaches and plums can be used for cocktail bitters, watermelon rinds can be pickled, food prep trim can be made into stock—you get the idea. It is estimated that 2-3% of the average restaurant’s food costs go out the door as waste. You’d be surprised how much your food costs can be mitigated by simply being more conscientious about managing that waste more effectively. Make sure to communicate with your staff about why waste management is so important as well: getting their buy-in is also critical to the success of your food cost reduction strategies!

Reducing Restaurant Food Costs in Pricing & Purchasing

Despite rising costs in food, labor and energy, many restaurant operators resist raising menu prices for fear of losing customers. While the concern is valid, increasing menu prices is an inevitable result of rising costs. Fortunately, there is a way this can be done with minimal resistance from your consumer base. For instance, research has shown that consumers seeking indulgences (think espressos or high end burgers) are not as sensitive to price increases. Consumers are also more likely to embrace a price increase if it comes in the form of a new menu item, or as a restructuring of an old favorite.

Reducing costs in the purchasing category of overall food costs often comes down to having a solid relationship with your suppliers. It’s important to prioritize key ingredients and then establish genuine partnerships with the vendors who supply them. Suppliers often have alternative options for inventory. It makes sense, therefore, to have a good relationship with them. You want those guys on your side. Top-to-top relationships are essential and partnerships should be entered cautiously. Other options to reduce costs in purchasing include looking for rebates or bundling offers on key products, purchasing the food in a form that results in less labor and/or waste, joining a purchasing cooperative or simply switching vendors.

Reducing Restaurant Food Costs on the Plate

In terms of strategies to reduce food costs on the plate itself, you could try using smaller portions, lower-cost proteins or lower-cost sides. You could increase the focus on sides to allow for a smaller or less-expensive protein. Remember that value perception has a lot to do with “trips to mouth.”You can enhance that perception while simultaneously decreasing food costs by choosing a side item that increases the number of times the fork goes into the mouth.

The cost of food is out of our control, but the way that we manage our food costs is not. Reducing waste and getting smarter about the ingredients you use can make a world of difference in increasing your bottom line.

Tags: commodities, cost management strategies, food costs, restaurant management