2. INTRODUCTION TO FOODANDBEVERAGE control
Controlling is a fault finding process?
Yes- How not? Why not?
Management is the process of achieving an organization goals
through the coordinated performance of five specific functions –
PLANNING,ORGANIZING,STAFFINGDIRECTINGANDCONTROLLING.
The organization is a group of people
The goal can be anything the organization seeks to do.
The management function interrelates with each other
function
Planning obviously affects the performance of all other
functions, but so do organizing, staffing, directing, and
controlling.
Because of the inter relationships among the various
functions, management is usually viewed as a process or a
logical flow of activities.
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3. INTRODUCTION TO FOODANDBEVERAGE control
Control, an inherent function in managing , is needed
in all organizations to make sure that plans are carried
out and desired results are achieved.
In the well –managed organization, all activities
ranging from spending money to producing products
and services to monitoring personnel performance are
subjected to the control products and services to
monitoring personnel performance are subjected to
the control process.
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4. Definition
Food and beverage control may be defined as :
The guidance and regulation of the costs and revenue of
operating the catering activity in hotels, restaurants,
hospitals, schools, employee’s restaurants and other
establishments
Richard A Johnston, Fremont E Keast, and James E
Rosenzweig
“We shall define control as that function of the system
which provides adjustments in conformance to the plan;
the maintenance of variations from systems objectives
within allowable limits.”
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5. Definition
The process whereby a manager attempts to regulate costs
and guard against excessive cost is known as cost control.
It is on going process and involves every step in the chain of
purchasing, receiving, storing, issuing and preparing food
and beverages for sale, as well as scheduling the personnel
involved.
Exact methods for cost control will vary from place to place,
depending in part on the nature and scope of operation; but
the principle behind varying methods will be constant.
The obvious governing power over costs in all areas in order
to keep costs within acceptable bounds, to account for
revenues properly, and make profits.
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6. Definition
Control is a process by which a manager attempts to direct,
regulate and restrain the action of people in order to achieve the
desired goal.
An obvious first step is to established goals for the enterprise.
Probably the most common goal for all private enterprise is
financial success, although this is by no means the only- range goal
of business. Others might relate to preserving the environment,
promoting better health among the population or etc.
To achieve the goals, management must setup any number of sub
goals compatible with its long-range plans.
These tend to be more specific and usually more immediate in
nature.
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7. What to Control?
The food and beverage business can be characterized as one
that involves raw materials purchased, received, stored and
issued for the purpose of manufacturing products for sale.
In these aspects many similarities exist between the
hospitality industry to achieve the goal of profitable
operation.
This will entail a discussion of how costs and sales are
controlled in food and beverage operations.
The means employed by foodservice managers to directly,
regulate and restrain the actions of people, both directly and
indirectly, in order to keep costs within acceptable bounds, to
account for revenues properly, and make profits.
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8. What to Control?
Two of the principal causes of excessive costs are inefficiency and
waste.
For example storing food in refrigerators that are not cold enough, or
liquor in bottles that are not tightly closed, will lead to spoilage and
hence to excessive cost.
So will the preparation of an inedible beef stew or an undrinkable
martini. When the stew is thrown into the garbage can or the martini
poured down the drain, costs of operation are increased but sale are
not.
Since profit is essentially the difference between sales and costs, it is
apparent that any increase in costs that does not lead to corresponding
increases in sales can only have the effect of reducing profits.
Clearly, management must take steps to guard against the occurrence
of these excessive costs
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9. Whatto Control?
There are three main areas of control
1 Assetsi.e. stock, cash
2 Revenue i.e. sales/income
3 Food and beverage consumption
i.e. cost of goods sold.
While cost control is critically important to the profitable operation of
any business, it alone will not ensure profitability. additional steps
must be taken to ensure that all sales in appropriate income to the
business
Having identified the areas to be controlled it is essential to recognise
that all members of staff are involved in the operation of control.
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10. Why is the Need to Control
The importance of food and beverage control needs
considerable emphasis.
The amount of control is related to the size of the operation
from much precise, detailed, up to date information aided by
computers to an operation which does not need the same
level of sophistication as mentioned above.
In both instances the type and volume of data required needs
to be selectively determined if control is to be meaningful
and effective.
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11. Why is the Need to Control
In hotels, food and beverage sales often account for up to
half of the total revenue, while in restaurants, food and
beverage sales are the main or the only service revenue.
The cost of food and beverages in the commercial sector is
usually between 25-45 percent of the total operating costs.
In hospitals, schools employee restaurants and similar
operations. Food and beverages are the main day-to-day
expenditure, which is controlled by budgets and/or a level of
subsidy.
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12. The purpose of control
The purpose of control can be divided into three
activities
1 Set the standards and objectives which serve as
the guidelines for performance
2 Measure and evaluate inputs and performance
according to the standards and objectives
3 Take corrective action in the form of a control
decision
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13. 1. Analysis of income and expenditure
The analysis is solely concerned with the income
and expenditure related to food and beverage
operations.
The revenue analysis is usually by each selling out
let, of such aspects as the volume of food and
beverage sales, the sales mix, the average spending
power of customers and the number of customers
served.
The cost analysis is departmental food and
beverage costs and beverage costs portion costs and
labour costs.
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objectives of food and beverage control
14. Objectives of food and beverage control
The performance of each out let can then
be expressed in terms of
the gross profit ( Sales minus
materials) and
the net margin (gross profit minus
wages) and
the net profit (gross profit minus wages
and all over head costs)
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15. 2. Establishment and maintenance of standards
The basis for the operation of any food and
beverage out let is the establishment of a set of
standards, which would be particular to an
operation.
The maintaining of the set standards can be
aided by regularly checking on the standards
achieved by observation and analysis and by
comments made by customers and training
courses to re-establish the standards.
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16. Objectives of food and beverage control
3. Pricing
An important objective of food and beverage control
is to provide a sound basis for menu pricing
including quotations for special functions. it is
therefore, important to determine food menu and
beverage list prices in the light of accurate food and
beverage costs and other min establishment costs as
well the average customer spending power, the prices
charged by competitors and the prices that the
market will accept.
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17. Objectives of food and beverage control
4.Prevention of Waste
In order to achieve performance standards for an
establishment targets are set for revenue cost
levels and profit margins to achieve these levels
of performance it is necessary to prevent wastage
of materials caused by such things as poor
preparations, over production, failure to use
standard recipe.
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18. Objectives of food and beverage control
5. Prevention of fraud
It is necessary for a control system to prevent or at
least restrict the possible areas of fraud by
customers and staff.
Fraud by customers are such as deliberately
walking out without paying claiming that the food
or drink that they had partly or totally was
unpalatable and disputing the number of drinks
served
Making payments by stolen checks or credit cards
Fraud by staff are overcharging or under charging
for items served and stealing of food, drink or cash
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19. Objectives of food and beverage control
6. Management information
A system of control has an important task to fulfill in
providing accurate up-to-date information for the
preparation of periodical reports for management.
This information should be sufficient so as to provide a
complete analysis of performance for each out let of an
establishment for comparison with set standards previously
laid down for example, budget standards.
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20. Objectives of food and beverage control
The amount of control necessary is related to
the size and complexity of an establishment.
However, whatever the size and type of
operation, the management control
information required has to be limited to
what is really necessary and meaningful.
Some selectivity is needed to determine
what exactly is required as against producing
a mass of statistical information.
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21. Special problems of Food and beverage control
Food and beverage control tends to be more difficult
than the control of materials in many other industries.
The main reasons are:
1. The perish ability of the produce:
Food whether row or cooked, is a perish able
commodity and has a limited life.
Therefore we need to ensure that we buy produce in the
correct quality and quantity in relation to estimated
demand, and that it is correctly stored and processed.
Where as beverages are normally not as perishable
as food and this contributes to their easier control.
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22. Special problems ...
2. The unpredictability of the volume of sales:
There is often a change in the volume of business from
hour to hour, day to day, month to month and year to
year.
This causes basic problems with regard to the quantities
of commodities to be purchased and prepared as well as
to the staffing required.
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23. Special problems……..
3. The unpredictability of the menu mix
The other problem to the caterer is the fact that in order to
be competitive and satisfy a particular market it is necessary
to offer a wide choice of menu items to the customers.
It is therefore necessary to be able to predict not
only the number of customers who will be using the
facility at period in time, but also as to what the
customer's selection will be from the alternatives
offered on the menu.
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24. Special problems…..
It is seldom possible to be 100 percent
accurate but in order to control costs
effectively.
It is necessary to have some method of
volume for casting as part of the total
food and beverage control system.
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25. Special problems……
4. The short cycle of catering operations
The speed at which the catering operation takes place in
relative to many other industries allows little time for
many control tasks.
It is common that items ordered one day are received
processes and sold the same or next day.
It is for this reason that in large catering establishments
cost reporting is done daily or at least weakly.
Furthermore problems particularly with perishable
foods, are that with a short life for produce, items can
not be bought very much in advance of their need and
the problem of availability at times of produce relative
to the price that can be afforded in relation to the
selling price.
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26. Special problems…..
5. Departmentalization
Many catering establishments have several
production and service departments or outlets
offering different services and products and
operating under different policies.
It is therefore necessary to be able to produce
separate trading results for each of the
production and selling activities.
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27. Any control system should be comprehensive and cover
all the outlets of an establishment and all stages of the
control cycle. The cost maintaining the system should be
in relation to the saving to be made, the level of
sophistication of the control system usually increasing
with the increase in the volume of sales and the
complexity of the menu.
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28. Essentials of a control system
The control system should be
Easy to operate and to be understood by all levels of
staff.
Seen by staff to be working.
i.e. the management act in a positive way to
adverse trading result and follows up on future
results to check the corrective action taken is
effective.
To be effective the information produced must be
accurate and up to date.
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29. Limitation of a control system
A control system in itself will not cure or
prevent problems occurring.
An effective system is dependent up on correct
up-to-date policies and operational
procedures. But the system should identify
problems and trends in the business.
A control system will require constant management
supervision to ensure that it functions efficiently.
A control system will need management action
evaluate the information Produced and to act
up on it.
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30. THE COMPLETE FOOD AND BEVERAGE CONTROL SYSTEM
The Fundamentals of Control
Effective control systems and procedures consist of
three broad phases
The planning,
Operational and
Management control after the event
phases.
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31. The Complete Food and Beverage…
The planning Phase
It is difficult to run an effective catering operation
without having firstly defined the basic policies.
Policies are predetermined guide lines, laid down by
the senior management of an organization, which out
lines such matters as the market or segment of the
market that is being aimed at, how it is to be catered
for and the level of profitability to be achieved.
Policies in general are particular to individual
companies and establishments.
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32. The Complete Food and Beverage ….
1. The financial policy
The financial policy will determine the level of
profitability, cost limits to be expected from the
business as a whole and the contribution to the
total profit or cost limit that is to be expected
from each unit, and then from the departments
with in them.
Thus the financial policy for a large hotel will set
profit targets for the hotel for departments profit
targets as well.
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33. The Complete Food and Beverage……
2. The marketing policy
The policy, i.e. the marketing policy will identify
the broad market the operation is intended to
serve and the particular segment(s) of the market
up on which it intends to concentrate.
The immediate and future consumer
requirements in order to maintain and improve
its business performance.
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34. The Complete Food and Beverage ……
The interpretation of the marketing policy for a national
commercial catering organization in to a marketing plan
for the next year or so may include some or all of the
following objectives.
National identity - Customer
Market share
Customer satisfaction
Profitability
Average spending power per customer
Product -
Turn over
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35. The Complete Food and Beverage….
3. The catering policy.
Which is normally evolved from the
financial and marketing policies, will define
the main objectives of operating the food
and beverage facilities and describe the
methods by which such objectives are to be
achieved.
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36. The Complete Food and Beverage…
It will usually include the following:
The type of customer
The type of menu(s),
Degree of comfort and decor,
The food quality standards
The method of buying,
Type and quality of service
The beverage provision
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37. The Complete Food and Beverage …..
The Operational Phase
Once having defined the predetermined guidelines i.e.
the policies it is then necessary to out line how they are
to be interpreted in to day-to-day control activities of the
catering operation.
The operational control takes place in five main stages of
the control cycle as follows.
1. Purchasing 2. Receiving 3. Storing
4. issuing 5.Preparing 6. Selling
NB The major points to be considered in each of the above f&b
operational control cycles will be discussed in he following
chapters.
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38. The Complete Food …..
The management Control after the Event phase
This final phase of food and beverage control contains three
main steps
Food and beverage Cost Reporting, Assessment and
Correction
The Reality of Control :. In reality no control system will be
100 percent efficient for the following basic reasons,
The material product, The staff employed, The equipment
used, The customers choice.
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