Wednesday, February 20, 2013

What's Your Food Cost Problem?

Get the most from every dollar by calculating 3 allowable food cost controls & acknowledging that you may have a problem area. If nothing goes wrong, from your back door to your register, what will your food cost be?

With something as important as your food cost, you want to have the tools and resources available to establish standards. In other words, you need to compare actual costs with the standard base, and spend your valuable time managing the variances.

Lets cover the 3 basics,
  1. Standard recipe – includes the ingredients, amounts, menu item prep procedures
  2. Portion size – as the recipe is standardized, so too is the portion size, with the employees having the appropriate tools and instructions necessary.
  3. Standard portion cost – once we have recipe and portion standards, determine the portion cost of the menu item. 
In reality, in commercial operations a menu item is not usually sold alone, it is part of a complete meal. There are many great point-of-sale systems and programs that can track and calculate daily / weekly number of portions / meals served (and the total food cost for selling, items sold, total sales income).

Even if you’re in control of the food cost management process, you still have to battle the economic turmoil of higher prices or supply shortages looming large for later in 2013.  
Then, there are Fred’s 7 ways to increase food cost in a restaurant, such as; 
wasteoverproduction, poor utilization/or selection of products, incorrect portioningslow menu movers (dogs!), poorly trained employees, and stealing (not just your brother-in-law) 

During a recent consultation, I said to the owner of a 20 unit emerging chain who claimed that all of his employees where honest and his distributor did a great job managing purchasing for his restaurants, 
" Why is it that your waitress in Johns Creek collected for my coffee and sweet roll without presenting a guest check? I watched her closely after that and she never went near the cash register? And, I also noticed that your price of fresh cut chicken wings has not changed, even through post-Super Bowl prices are in free-fall  
By this time in the post, you have acknowledged  having  a food cost or spend challenge, so why not do something about it?

The acquisition cost problem is solved by having skilled professionals contracting lower prices, recovering post-purchase income and managing the spend process; services now available in a single outsourcing plan from our firm. 

The other areas of cost management requires experienced on-site management, ongoing training, control systems and world-class communication of procedures and objectives.  

To Higher Profits!

Fred Favole is President of Strategic Purchasing Services (SPS), America's most experienced foodservice firm specializing in department outsourcing and spend management. Contract info: p: 912-634-0030, email: 

Wednesday, February 6, 2013

Super-Bowl Plan For Your Foodservice Business

Draw plays from the 2013 Super-Bowl to create dozens of food & supply cost-savings options.  Produce a playbook to prepare for the coming economic playoffs so you can organize more effectively to win more spend matters.  

SPS Post-Game Price Summary (Feb)
Burgers UP .15 lb.        Wings    No Change
Bacon UP    .20 lb         Oil           UP 40 basis points

As top-line growth is hard to come by, the opportunity to build a defense that holds the line on price or an offense that goes for the profit goal line, is simply too good to ignore. 

Limited resources, like the salary cap for the Champion Ravens are a fact of food service life, including time, staff and funding. Learn how to get the most out of your current team by running plays that recognize CORE talents and add special teams players to improve your capability and game winning strategy. 

Focus on those areas in your growth and profitability playbook that you want to hand over to qualified specialists that you really don’t do well in-house. Game Strategy: discover how individual commitment to a group effort by specialists – that is what makes restaurant concepts work. 

Here are the top 5 half-time black board plays
 that CEO's talked to their coaches about during the playoffs;  never hand-off food spend areas to culinary, marketing or operations staff, and never give the ball, with 3rd down & short yardage to multi-tasking executives (hey- they don't even have time read the GET a "round TUIT " instructions on the their wristband! Penalty:   Loss of profitable Limited-Time-Offer, plus 5% of total spend left on the pricing table!   

Super Plays for Your Business
  1. Strategic Vendor Sourcing & Professional Contracting  (performance)
  2. External Distribution Warehouse Audits  (price-compliance)
  3. Freight / Logistics Cost Improvement   (spend management)
  4. Commodity Price Management    (planning & forecasting)
  5. Increased “spend-under-contract   (financial control & stability)
During the initial assignment process, with SPS added to your specialist team, we will uncover hidden savings and look at new tactics to create significant buying opportunities, where there is none at the moment.

To Higher Profits! 

Fred Favole is Team Owner of Strategic Purchasing Services (SPS), America’s most experienced foodservice consulting firm specializing in department outsourcing, “center-of-the-plate” contracting and advanced spend management systems. Contact The Owners Office, Telephone: 912-634-0030, Connect on LinkedIn or follow Coach Fred's game winning blog: