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Menu planning

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  • 1. MENU PLANNINGFrom design to evaluation 1
  • 2. Rationale Everything starts with the menu. dictates how your operation will be organized and managed, the extent to which it must meet its goals, and even how the building itself - certainly the interior - should be designed and constructed. 2
  • 3. Objectives To explain the importance of a menu To explain the basic rules of menu planning To identify factors to be considered when planning a menu To identify constraints in menu planning To plan and write a menu 3
  • 4. Must Satisfy Guest Expectations Reflect your guests’ tastes Reflect your guests’ food preferences Ascertain your guests’ needs 4
  • 5. Must attain Marketing Objectives  Locations  Times  Prices  Quality  Specific food items 5
  • 6. Must help to achieve Quality Objectives Quality standards: flavor, texture, color, shape, flair, consistency, palatability, visual appeal, aromatic apparel, temperature Nutritional concerns: low-fat, high-fiber diets, vegetarian 6
  • 7. Must be Cost-Effective Commercial financial constraints profit objectives Institutional minimizing costs operational budget 7
  • 8. Must be Accurate Truth-in-menu laws exist in some localities, cannot mislabel a product  “butter” must use butter not margarine  “fresh” must be fresh, not fresh frozen  “homemade” not purchased “ready-to-heat”  “USDA Choice” actually “USDA Good” 8
  • 9. Menu Planning Constraints 9
  • 10. Facility Layout/Design and Equipment Space Equipment available Work flow Efficiency 10
  • 11. Available Labor Number of Employees Required Skills Training Programs 11
  • 12. Ingredients Standard recipe Availability of the ingredients required during the life span of the menu Seasonal ingredients Cost Miscellaneous cost (flight charges, storage) 12
  • 13. Marketing Implications Social needs Physiological needs Type of service (fast food, leisure dining) Festival Nutrition 13
  • 14. Quality Levels and Costs Guests’ expectation Employees’ skills and knowledge Availability of equipment Specific ingredients Food costs and selling prices 14
  • 15. The Menu andthe Food Service Operation 15
  • 16. The Menu Helps to Determine Staff Needs Variety and complexity increases, number of personnel increases  Production staff  Service staff  Back-of-house staff 16
  • 17. The Menu Dictates Production and Service Equipment NeedsTableside service carving utensils, trolleys, gueridon, salad bowls, suzette pans, souffle dishes, soup tureens, large wooden salad bowl, rechaud, Voiture (heated cart for serving roasts) and ...... 17
  • 18. The Menu Dictates Dining Space A take-out sandwich or pizza operation would require no dining space and the amount of square feet required per person would be minimal. On the other hand, if a restaurant offers a huge salad buffet, dessert selection or an after-dinner trolley, wide aisles would be needed to allow guests ease of movement and moving of equipment. 18
  • 19. Purchase Specifications May Be Dictated By The Menu If the menu offers such items as USDA Choice New York strip steaks, quarter-pound lean beef burgers, grade AA eggs, freshly squeezed Florida orange juice, or vine-ripened tomatoes, back -of-house procedures will not only include receiving, storing, issuing, and producing the menu items but also purchasing the specific products described. 19
  • 20. How and When Items Must Be Prepared To stimulate guest interest, the menu planner may offer a dish prepared in a variety of ways:  Cooking methods  Poached, broiled, batter-dipped, deep fried The finished product must be prepared using the method indicated on the menu Small quantities cooking (a la carte) Batch cooking 20
  • 21. The Menu is a Factor in the Development of Cost Control Procedures As the menu requires more expensive food items and more extensive labor or capital (equipment) needs, the property’s overall expenses and the procedures to control them will reflect these increased cost. 21
  • 22. The Menu and the Service Plan Type and size of dinnerware Types of flatware Garnishes (placed by service or production staff) Timing requirement for ordering Additional dining service supplies to serve the item Special serving produced Special information (doneness of the steaks, over easy or sunny side eggs, etc.) 22
  • 23. Menu Design First impression is always important, the entire menu should complement the operation - Theme - Interior Decor - Design (Merchandising) - Creativity - Material - Color - Space 23
  • 24. Menu Design- Type style and/or lettering- Names of food items- Description- Popular items are at the top of a list- Clip-ons, inserts (daily specials)- Operation’s address- Beverage service notice- Separate menus for each meal period- Separate menu for host/hostess and guests 24
  • 25. Menu Styles A table dhôte (a complete meal for one price) A la Carte (items are listed and priced separately) Combination (combination of the table dhôte and a la carte pricing styles) Fixed menus: a single menus for several months Cycle menus: designed to provide variety for guests who eat at an operation frequently - or even daily 25
  • 26. Types Of Menus Breakfast (offers fruits, juices, eggs, cereals, pancakes, waffles, and breakfast meats) Lunch (features sandwiches, soups, salads, specials; usually lighter than dinner menu items) Dinner (more elaborate, steaks, roasts, chicken, sea food and pasta; wines, cocktails, etc..) 26
  • 27. Types Of Menus - Specialty Children’s Senior citizens’ Alcoholic beverage Dessert Room service Take-out Banquet California (breakfast, lunch and dinner menu items on one menu) Ethnic 27
  • 28. Basic Rules Of Menu Planning Know your guest  Know your operation - Food preference - Theme or cuisine - Price - Equipment - Age - Personnel - Quality standards - Budget 28
  • 29. Selecting Menu Items Menu category:  Appetizers  Salads  Entrees  Starch items (potatoes, rice, pasta)  Vegetables  Desserts  Beverages 29
  • 30. Common Sources For Menu Item Recipes Old menus Books Trade magazines Cookbooks for the home market 30
  • 31. Menu Balance Business balance - balance between food cost, menu prices, popularity of items, financial and marketing considerations Aesthetic balance - colors, textures, flavors of food Nutritional balance 31
  • 32. Elements Of Menu Copy Headings - Appetizers - Soups - Entrees Sub-heading - Under entree:  Steak, seafood, today’s specials 32
  • 33. Elements Of Menu Copy Descriptive copy (describe the menu items) - should be believable and made in short, easy-to-read sentences - no description is needed for self- explanatory item. i.e. Low Fat Milk 33
  • 34. Truth-in-menu Grading (foods are graded by size, quality, in line with official standards) “Freshness” (cannot be canned, frozen or fresh- frozen) Geographical origin (cannot make false claims about the origin of a product) Preparation (if the menu says baked, it cannot be fried instead) Dietary or nutrition claims (supported by scientific data) 34
  • 35. Supplemental Merchandising CopyIncludes information such as: Address Telephone number Days and hours of operation Meals served Reservations and payment policies History of the restaurant A statement about management’s commitment to guest service 35
  • 36. Menu Layout Sequence: Appetizers, soups, entrees, desserts  Depends on the operation (side orders, salads, sandwiches, beverages)  Depends on popularity and profitability Placement: artworks; space; boxes; clip-on; etc. 36
  • 37. Menu LayoutFormat: Menu’s size General makeupTypeface: Printed letters Font size Type face 37
  • 38. Menu LayoutArtwork: Drawings, photographs, decorative patterns, bordersPaper: TextureCover: Color Texture 38
  • 39. Common Menu-design Mistakes Menu is too small Type is too small No descriptive copy Every item treated the same Some of the operations’ food and beverages are not listed Clip-on problems Basic information about the property and its policies are not included Blank pages 39
  • 40. Evaluating Menus Must set standards Determine how menu is helping to meet standards 40
  • 41. Menu Evaluation: Questions Most Often Asked Is the menu attractive? Do the colors and other design elements match the operation’s theme and decor? Are menu items laid out in an attractive and logical way? Is there too much descriptive copy? Not enough? Is the copy easy to understand? Is attention called to the items managers most want to sell, through placement, color, description, type size, etc.? 41
  • 42. Menu Evaluation: Questions Most Often Asked Have guests complained about the menu? Have guests said good things about the menu? How does the menu compare with the menus of competitors? Has the average guest check remained steady or increased? Is there enough variety in menu items? Are menu items priced correctly? Are you selling the right mix of high-profit and low-profit items? 42
  • 43. Menu Evaluation: Questions Most Often Asked Is the typeface easy to read and appropriate to the restaurant’s theme and decor? Is the paper attractive and stain- resistant? Have the menus been easy to maintain so that guests always receive a clean, attractive menu? 43
  • 44. Menu PricingSUBJECTIVE PRICING: The reasonable price method: from the guest’s perspective - what charge is fair and equitable The highest price method: sets the highest price that the manager thinks guests are willing to pay The loss lender price method: an unusually low price is set for an item to attract guests The intuitive price method: takes a wild guest, trail-and-error 44
  • 45. Menu PricingDESIRED FOOD COST PERCENTAGE PRICING METHOD: manager determines a reasonable food cost percent then divides a menu item’s standard food cost by its reasonable food cost percent Selling price = $1.50 (item’s standard food cost) = $4.55 0.33 (desired food cost percent) 45
  • 46. Menu PricingPROFIT PRICING: factors profit requirements and non-food expenses into menu item selling pricesAllowable = $300,000 - $189,000 - $15,000 = $96.000food costs (forecasted (non-food (profit food sales) expenses) requirements)Budgeted food cost % = $96,000 (allowable food costs) = 0.32 or 32% $300,000 (forecasted food sales) 46
  • 47. Menu PricingCOMPETITION AND PRICING: Know competitor’s menus, selling prices, and guest preferences Lower your prices Raise your prices Elasticity of demand: Elastic: price change creates a larger % in the quantity demanded (prices-sensitive) Inelastic: the % change in quantity demanded is less than the % change in price 47
  • 48. The Menu:The Foundation For Control GUEST SATISFACTION BASIC OPERATING ACTIVITIES: CONTROL POINTS SERVING MENU PLANNING HOLDING PURCHASING COOKING RECEIVING PREPARING STORING PRODUCTION ACTIVITIES ISSUING 48
  • 49. The Menu Influences Product Control Procedures every item on the menu represents a product to be controlled Cost Control Procedures careful cost control procedures must be followed, particularly when expensive products and labor-intensive service styles are used Production Requirement product quality, staff productivity and skills, timing and scheduling, and other back-of-the-house functions are all dictated by the menu 49
  • 50. The Menu Influences Equipment Needs equipment must be available to prepare products required by the menu Sanitation Management management must consider menu items in light of possible sanitation hazards Layout and Space Requirements the physical space within which food production and service take place - must be adequate for purchasing, receiving, storing, issuing, producing, and serving every item on the menu 50
  • 51. The Menu Influences Staffing Needs as menu becomes more complex, greater demands may be placed upon the staff Service Requirements the menu affects the skill levels required for service personnel, along with equipment, inventory, and facilities needed in the front of the house Sales Income Control Procedures elaborate menus require more stringent controls than simple menus 51
  • 52. Menu Planning is also.. A Tool for: Sales lists the items an operation is offering for sale Advertising communicates a property’s food and beverage marketing plans Merchandising target market expectations - products, service, ambience (theme and atmosphere), perceived value Marketing Tool strive to meet or exceed the expectations of its target market 52
  • 53. Priority Concerns Of The Menu Planner Priority Concerns of menu PlannerWants and needs Guest Concept of Value Quality of Item Flavour Item Price Cost Consistency Object of Property Visit Availability Texture/Form/ShapeSocio-Economic Factors Peak Volume Production Nutritional Content and Operating ConcernsDemographic Concerns Visual Appeal Sanitation Concerns Ethnic Factors Aromatic Appeal Layout Concerns Religious Factors Equipment Concerns Temperature 53
  • 54. Menu Planning Strategies Rationalization  simplification for the sake of operational efficiency  cross-utilization : menu items use the same raw ingredients  streamlining of the purchasing, receiving, storing, issuing, production, and serving control points. High-quality convenience foods make it easier to offer new items without having to buy additional raw ingredients 54
  • 55. Factors That Influence Menu Planning Strategies Needs and wants of target markets Several items from same ingredients Storage requirements Personnel skill levels Product availability / seasonality Quality and price stability Sanitation procedures 55
  • 56. External Factors That Influence Menu Changes Consumer Demands decide which potential markets wants to attract Economic Conditions cost of ingredients, potential profitability of new menu items Competition many not want to serve next door’s best Supply Levels seasonal items, price to the quality and quantity Industry Trends industry’s response to new demands 56
  • 57. Internal Factors That Influence Menu Changes Facility Meal Patterns existing meal periods - breakfast, lunch and dinner Concept and Theme the image may rule out certain foods that do not blend with its theme and decor Operational System costs for new equipment to the successful production and service of new menu items 57
  • 58. Pricing Approaches Subjective Price Methods intuition and knowing your guests (failed to relate profit and costs) The Reasonable Price Methods presumes value to the guest (what charge is fair and equitable) The Highest Price Method sets the highest price the guests are willing to pay 58
  • 59. Pricing Approaches The Loss Leader Method an unusually low price is set for an item (or items) to bring guests in The Intuitive Price Method wild guess about the selling price (pricing methods based on assumptions, hunches and guesses) 59
  • 60. Pricing Approaches Simple Mark-up Pricing Methods designed to cover all costs and to yield the desired profit. Three Steps: 1. Determine the ingredients’ costs 2. Determine the multiplier 3. Establish a base selling price 60
  • 61. MultiplierIf food cost is to be 40%Multiplier = 1 / desired food cost% = 1 / .40 = 2.5 61
  • 62. Base Selling Price If ingredient cost is $3.32Base Selling Price = Ingredient Cost x Multiplier $8.30 = $3.32 x 2.5A base selling price in not necessarily the final selling price 62
  • 63. Prime-Ingredient Mark-Up MethodBase selling price = Prime Ingredient Cost x Multiplier $8.30 = $1.59 x 5.22 or food cost is about 19% 63
  • 64. Mark-Up with Accompaniment CostsEntree / Primary Costs $3.15Plate Cost +$1.25Food Cost $4.40Mark-Up Multiplier x 3.3 (30% food cost)Base Selling Price $14.52 64
  • 65. Determining the Price Multiplier Based upon: experience or “rule of thumb” contribution margin impact of sales mix does not reflect higher or lower labor cost assume food cost associated with producing menu item are know 65
  • 66. Contribution Margin Pricing MethodContribution Margin refers to the amount left after a menu item’s food cost is subtracted from its selling price. Two steps in setting base selling price: 1. Determine the average contribution margin required per guestNon-Food + Required Profit = Ave. Contribution Margin Required/guest No. of Expected guests $295,000 + $24,000 = $3.75 85,000 66
  • 67. Contribution Margin Pricing Method2. Determine the base selling price for a menu itemBase selling price = average contribution margin + Standard food cost $7.35 = $3.75 + $3.60 67
  • 68. Ratio Pricing MethodThe ratio pricing method determines the relationship between food costs and all non-food costs plus profit requirements and uses this ratio to develop base selling price for menu items. Three steps1. Determine the ratio of food costs to all other cost plus profit requirements All non-food costs + Required profit = Ratio Food costs $160,000 + $21,000 = 1.34 $135,000 68
  • 69. Ratio Pricing Method 2. Calculate the amount of non-food cost and profit required for a menu item Non-food cost and profit required = Standard food cost x ratio $5.03 = $3.75 x 1.34 3. Determine the base selling price for the menu itemBase Selling Price = Non-food cost and profit required + Standard food cost $8.78 = $5.03 + $3.75 69
  • 70. Simple Prime Costs MethodThe term prime cost refers to the most significant costs in a food service operation: food, beverage and labor.A simple prime costs pricing method involves assessing the labor costs for the food service operation and factoring these costs into the pricing equation. Three steps: 1. Determine the labor costs per guest Labour Cost per guest = Labour costs / No. of expected guests $2.80 = $210,000 / 75,000 70
  • 71. Simple Prime Costs Method 2. Determine the prime costs per guestPrime Cost per guest = Labour cost per guest + menu item’s food cost $6.55 = $2.80 + $3.75 3. Determine base selling price Base Selling Price = Prime costs Per guest Desired Prime Costs% $10.56 = $6.55 / 0.62 71
  • 72. Specific Prime Cost MethodSpecific Prime Cost Method - develops mark-ups for menu items so that the base selling prices for the items cover their fair share of labor costs. Divide the menu items into 2 categories: (A) extensive preparation (B) non extensive preparation clean up, and other non-preparation activities 72
  • 73. Specific Prime Cost Method Allocates appropriate % of total food costs and labor costs to each category (A) 60% of the total food cost (B) 40% of the total food cost (A) & (B) 55% of all labor costs 45% of all labor costs is incurred for service, 73
  • 74. Specific Prime Cost Method - Calculations Operating Category A Category B Budget Item Budget % (extensive preparation) (Non-extensive Preparation) (1) (2) (3) (4) Items Items Food Cost35% 60% of 35% = 21% 40% of 35% = 14% Labour Cost 30% 55% of 30% = 17% 40% of 13% = 5% All Other Cost 20% 60% of 13% = 8% 40% of 20% = 8% Profit 15% 60% of 15% = 9% 40% of 15% = 6% Total 100% 67% 33% Mark-Up 100% =2.9% 67% = 3.2 33% = 2.4 Multiplier 35% 21% 14% 74
  • 75. Important Pricing Considerations The Concept of Value (price relative to quality) The Basic Law of Supply and Demand Volume Concerns Must be Considered Price Charged by the Competition for a similar Product 75
  • 76. Evaluating The Menu: Menu EngineeringBasic Menu Engineering Process: Stars - items that are popular and profitable Plowhorses - items that are not profitable but popular Puzzles - items that are profitable but not popular Dogs - items that are neither profitable nor popular 76
  • 77. Defining Profitability Contribution Margin a “high” contribution margin for an individual menu item would be one that is equal to or greater than the average contribution margin Average Contribution Margin = Total Contribution Margin Total Number of Item Sold 77
  • 78. Defining PopularityPopular Index bases upon the notion of “expected popularity” For example: 4 items on a menu and each is assumed to be equally popular, the sales of each would be expected to be 25% 100% ÷ 4 = 25% Menu engineering assumes that an item is popular if its sales equal 70% of what is expected.. For example: a food item is considered popular if its sales is: 25% x 70% = 17.5% of total sales 78
  • 79. Menu Engineering Worksheet Menu Engineering Worksheet Date: 6/10/00 _________________Restaurant: ____________________________ Meal Period: Dinner (A) (B) (C) (D) (E) (F) (G) (H) (L) (P) (R) (S) Menu Number Menu Item Item Item Menu Menu Menu Menu Item Sold Mix Food Selling CM Costs Revenues CM CM MM% Item Name (MM) % Cost Price (E - D) (D x B) (E x B) (H - G) Category Category Classific- ationChicken Plow- Dinner 420 42% $2.21 $4.95 $2.74 $928.20 $2079.00 $1150.80 Low High horseNY Strip Steak 360 36% 4.50 8.50 4.00 1,620.00 3,060.00 1,440.00 High High StarLobster Tail 150 15% 4.95 9.50 4.55 742.50 1,425.00 682.50 High Low PuzzleTenderloin Tips 70 7% 4.00 6.45 2.45 280.00 451.50 171.50 Low Low DogColumn N l J MTotals 1,000 $3570.70 $7015.50 $3444.80 K=l/J O=M/N Q = (100%/items) (70%) Additional Computations: 50.9% $3.44 17.5%(Box K = Food Cost %; Box O = Average Contribution Margin) 79
  • 80. Improving The Menu Managing PlowhorsesItems low in contribution margin, but high in popularity Increase prices carefully Test for demand Relocate the item to a lower profile on the menu Shift demand to more desirable items Combine with lower cost products Assess the direct labor factor Consider portion reduction 80
  • 81. Improving The Menu Managing PuzzlesItems high in contribution margin but low in popular Shift demand to these items Consider a price decrease Add value to the item 81
  • 82. Improving The Menu Managing Stars Items high in contribution margin and high in popularity Maintain rigid specifications Place in a highly visible location on the menu Test for selling price inelasticity Use suggestive selling techniques 82
  • 83. Improving The Menu Managing DogsItems that are low in contribution margin and lowin popularity:Candidates for removal from the menu 83