Top 7 Menu Engineering Techniques to boost your F&B Revenue & Profit
By Jefrey Walter, Dynamic leader|Food and Beverage & Culinary Management|Revenue Optimization
It's really incredible how smart strategies could boost your Food and Beverage revenue. People tend to overthink some of those strategies and eventually end up in different scenarios. This article will discuss various techniques in order to maximize your restaurant's, or profitability of any food and beverage outlet to enrich the guest experience.
1. Identify and Analyse your Customer Market:
This is one of the most important techniques because it helps to understand the palate & status of a guest. You could also identify based on an existing or potential customer. Furthermore, examine your company's profit and loss statement and identify the strengths and weaknesses. This will help in the identification of problems and you can modify those strategies. For instance, If most of your customers belong to a French culture then it is essential that your f&b outlet has at least 75-80% of food and beverage based on French or European cuisine. Meanwhile on the other hand it is also important to consider the 4 quadrants/plow horse method:
- Stars: High profitability and high popularity. These superstars are menu items that should be promoted whenever possible.
- Plow-horses: Low profitability and high popularity. Plow horses are products that guests love but have higher food costs. When possible, evaluate plow horse costs, menu price, or portion size for these menu items.
- Puzzles: High profitability and low popularity. would bring you high profitability, if only your customers would order them more often. They're a puzzle to figure out.
- Dogs: Low profitability and low popularity. Dogs are neither profitable nor popular. These items should be evaluated to determine if those dogs can be cut from the menu.
2. Effective Food Costing:
If your profit and loss statement illustrate most of the loss due to food, then it's imperative to first learn food costing. It may include analyzation of wastage, purchase analysis, inventory, theft, improper trimming/ cutting, and storage, standardized recipe, portion control, etc. For example, it is completely useless to hire a chef who likes to cook food based on the feeling and touch of ingredients. It is because there will be a lack of consistency, standard, and reduce guest satisfaction. Other costs include labor cost, Material cost, overhead cost, overhead expenses, profit.
Some tips for food costing :
✓ Once a plate cost is established for a menu item the selling price can be set. Typical food cost percentages run 20-40% of the overall operating cost of an establishment. Most sit-down restaurants are in the 30-35% range.
✓ Food waste Management :
- Communication is key & a use log
- Notice hiding waste
- Prep sheets
- Keep eye on everything and importantly trash can.
✓ The two ways foodservice establishments use to determine food costs are:
- Theoretical Menu Plate Cost - Individual portion cost for each menu item.
- Overall Food Cost Percentage - Based on the monthly cost of food as compared to sales.
3. Menu Design:
Keep the menu description short, simple and to the point, use descriptive words. Eg: Use keywords, Truth, Emotions - handpicked green beans.
- Don't put everything on $99...
- End prices in 14.10, 16.05,15.35
- Increase price in cents
- Increase prices slowly as your business grows
- Design yourself. Use Canva.com which is one of the best tools for menu design.
4. How to Hide Money on a Menu:
- Don't use bold prices or currency signs.
- Don't use different colors for prices.
- Never use lines or dots to direct an item to its price.
- Use slightly smaller font compared to items on the menu.
- The best way to sell an expensive item is to place it above the low priced item. It will not only increase its potential but also the potential of low price items.
5. Menu Planning:
When it comes to planning a menu it takes hard words and opinions from staff, f&b director/ manager, executive chef, and sometimes even customers. The food prepared should be a balanced one with nutritional principles. Moreover, focus on the type of service, type of menu, physical facilities, timing, utilizing space, staff and equipment efficiency, customer target & promotional activities, supplier and storage facilities, etc.
6. Use Technology:
F&b waste is the silent profit killer in every business where 75% of all waste can be avoided. In the USA alone, about 25.2 million tons are food is wasted every year in restaurants and hotels. By properly analyzing your wastage on regular basis and ensuring that your menus have proper cross-utilization of produce from each dish you produce, you will dramatically increase profits and margins. Use revenue management software, POS, guest management system, food waste catalog, scheduling software.
7. Importance of Customer service:
Ensure in providing the right Physical facilities. Combine the whole team and train them regarding food safety and hygiene, food allergies, portioning, and communication. Hospitality = Generosity. If your f&b service staff can communicate effectively, around 95% of the customers can be retained according to research. And forecasting does not work all the time, however, it is essential to cope with the trends and target guests appropriately.
Right people = Right products = Right processes
Moreover, the Importance of menu engineering and the top 7 techniques have been effectively highlighted. These techniques not only allow you to understand the Strategies but also to analyze things. These techniques will work only when you start analyzing your profit and loss statement which is the most important. However, it also depends on the company's overall ability to adapt to new changes and to face challenges.
PS: This article reflects my personal opinion of a professional food and beverage workforce.