Ways to Lower Food Cost in a Restaurant

How to lower food cost in a restaurant

There are many things that keep a restaurateur up at night and the rising food costs are one of them.

It becomes extremely difficult to monitor the profit and loss in a restaurant because of the constantly varying inventory costs adding up to the food costs.

In the journey to alleviate food costs in your restaurant, you’ll likely start cutting quality of the dish, which is the biggest mistake a restaurateur can ever make. Special care should be taken to lower the food cost without sacrificing the quality.

So, what is food cost?. Food cost is the sum total of preparation costs, handling costs, and everything else that goes into a dish, including the salt and ketchup. Even consider the potential food wastage and portion size while calculating the food cost.

Many restaurateurs would argue that instead of lowering the food costs, you should concentrate on improving the menu items. That would be absolutely helpful but improving the menu items alone is not going to get you anywhere. Imagine that you try out the same dish from two different restaurants A and B, which offers the best-in-class service and drool-inducing dishes that’ll leave you begging for more. But the only difference between them is that restaurant A offers the dish at a lower cost. If that is the case, which restaurant would you go back to?.

If I was in your place I would say restaurant B just to prove the writer wrong ;). Well, jokes apart almost everyone would prefer going back to restaurant B.

The key point that ever restaurateur should remember is that it’s not about lowering the food costs, it’s all about improving the food costs. Before jumping right into the article think of at least two ways by which you can improve your restaurant’s food costs and if you can’t find those ways listed in this article do let me know. Are you ready?

Let’s get started.

 

Menu analysis

The menu is the most crucial factor that drives income into your restaurant. Special care should be taken to regularly analyse the menu to keep the food costs in check and the margins up.

When conducting menu analysis, monitor on a day to day basis and try to come up with at least one way by which you can alleviate your food cost. Also, consider eliminating the parts of a menu that are regularly being left uneaten.

 

Buy in bulk

Approach local farmers and food manufacturers to buy food in bulk. This is not as difficult as it seems. Because of the growing competition among farmers, you might even end up with a better deal if you do proper research.

Even if the items are being offered dirt cheap take special care to never compromise on the quality of food items being purchased as the taste of the menu items will vary drastically based on the ingredients being used.

 

Negotiate

Negotiate with at least three other suppliers and get the service quoted by them. Also, let the supplier that you are already negotiating with know that you are getting quotes and will go with the best one available.

To have piece of mind, always have a backup supplier in case of a deadlock. This will also grant you more confidence while negotiating a deal.

 

Reduce Wastage

Based on the past sales maintain a record of what all items you want before placing the order. Special care should be taken to avoid overbuying fresh produce. Upon arrival, inspect the products and store them properly ( Before storing hot items in a refrigerator pre-cool them, ensure that proper temperatures are being maintained inside the freezer/refrigerator etc). Ensure that everything is organised and labelled with their purchase date.

Letting your staffs know that you are going to monitor what gets dumped and following up using clear plastic bags helps. Also, consider donating food items that you are not planning to use.

 

Buy Seasonal

The relative abundance of the food items when the produce is in season locally makes it cheaper. During the off-season, the items are grown in a hothouse or shipped from other parts of the world, which adversely affects the taste of the items. As the taste of the food items that we buy is as important as the cost, if not more, consider designing seasonal menu cards.

 

Try Different Brands

Don’t be afraid to try out different brands before settling upon one as the chances of ending up with items of the same quality at a much cheaper rate is high if you keep experimenting with different brands.

 

Automate

Save time and eliminate data entry errors by investing in a restaurant management system that helps in completely automating the processes like inventory management, accounts management, and several other tasks such as menu management etc.

 

Train Staffs

Slow/bad service can doom a restaurant. As every customer who walks out of the door is a loss in revenue, train your staffs well to implement portion control, reduce wastage, and increase the table turnaround time.

 

Control Portion Size

No one notices if you offer too much food, but everyone looses their mind if you are giving less.

So, special care should be taken while controlling the portion size as it’s important to keep the portion sizes in check to maintain the overall restaurant profits.

 

Prevent Theft

Product theft is a major factor of profit loss. Special care should be taken to prevent theft. Consider installing security cameras strategically to monitor employees and let them know that they are constantly being monitored.

In the run to increase your restaurant’s revenue take special care to not cut the quality of the dish. After all, that’s what keeps the customers coming back for more. Implementing the above- mentioned steps will help you in the journey to increase your restaurant’s revenue.

Having anything extra to add? Feel free to post your comments/suggestions down below.

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