How to win Corporate Clients with Perceived Value
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Perceived Value Food Cost Menu Mix
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How to win Corporate Clients with Perceived Value
- 1. THE CORPORATE CATERER: How to Win Clients with Perceived Value David Eicher C.E.C. Chef/Owner Nibblers Catering Culinary Business Consulting
- 2. What is “Perceived Value” ? • It is the “True Value” of what you are offering. • This is determined by your clients.
- 3. Set Food Cost Goals set desired food cost % from budget or business plan cost each item create “menu mix”
- 4. Food Cost Menu Item Price: $11.65 Chicken-Fennel Total Meatballs Ingredients Portion Unit PRICE Unit Cost Yield Cost Chicken Meatballs 6 oz. $1.42 $0.09 0.6 $0.89 Crushed Tomato Sauce 4 oz. $1.19 $0.07 1 $0.30 Side Items Cost: $0.51 Beverage Cost: $0.14 Dessert Cost: $0.27 TOTALS $2.11 FOOD COST 18.1% The perceived value of “Chicken Fennel Meatballs” is much higher than the boneless chicken thighs we started with.
- 5. Menu Item Price: $12.95 Food Cost “Fast Track” Ingredients Portion Unit PRICE Unit Cost Yield Total Cost Beef Brisket Flat 5 oz. $4.06 $0.25 0.6 $2.11 Au Jus 1 oz. $0.25 $0.02 1 $0.02 Horseradish Cream 1 oz. $0.59 $0.04 1 $0.04 Side Item Cost: $0.78 Beverage Cost: $0.14 Dessert Cost: $0.27 TOTALS $3.36 FOOD COST 25.9% The perceived value of certified angus beef© brisket is present in the branding
- 6. Chicken Fennel Fast Track Beef Meatballs Brisket $2.11 ÷ $11.65 $3.36 ÷ $12.95 Food Cost = = Combined 18.1% Food Cost 25.9% Food Cost “Menu Mix” $5.48 Combined Cost ÷ $24.60 Combined Sales = 22.3% Food Cost
- 7. When Food Cost Gives Way to the Dollar Higher priced menu items High volume (quantity)
- 8. Higher Menu Item Price: $23.95 Food Cost Total Example Ingredients Portion Unit PRICE Unit Cost Yield Cost Filet Mignon, Béarnaise Filet Mignon 5 oz. $10.99 $0.69 0.6 $5.72 Béarnaise Sauce 1 oz. $3.89 $0.24 1 $0.24 Average Side Cost: $0.83 Beverage Cost: $0.14 Dessert Cost: $0.27 TOTALS $7.21 FOOD COST 30.1%
- 9. Gross Profit Beef Brisket = $9.59 Gross Profit Chicken Meatballs = $9.54 Gross Profit Filet Mignon = $17.00
- 10. Food Cost is an important management tool. Just remember… you pay bills with dollars not percentage.
- 11. Higher Volume Sales Example: Corporate Picnics Providing you are working within your food cost and sales budget plan, you can give discounts based on volume to get the sale. • Lower Sales Price • Increase Volume • Increase Gross Profit • More $ in the bank
- 12. David Eicher C.E.C. Chef/Owner Culinary Business Consulting david@nibblerscatering.com View this presentation at: https://www.slideshare.net/NibblersCatering
Editor's Notes
- Introduction. A little about Nibblers Catering.We are the “Go To” Corporate Caterer in Phoenix, Arizona.We have a 7000 sq. ft. facility, 30 employees and twelve delivery vans.90% of our business is Monday-Friday daytime. We average 40+ stops a day serving 1200-1500 people.My wife Diane manages the sales and operations while I manage the culinary team and the operating budget.We have managed under a 26% Food Cost for 15 years straight.
- Perceived value is what you believe to be a fair price for quality goods & services. The client & the caterer sometimes do not agree on this.An example would be how you feel about certain restaurants you go to. If it is fantastic $100 meal you are happy to pay, and have a good perceived value of your experience.If it is a $15 dollar meal that was not quite up to your expectations, you are not as happy and have low perceived value. Under a different setting and price you may feel different.Chef Paul, a master chef in Baltimore under whom I served my apprenticeship told me in 1979 “perceived value is everything”
- 1) Plan your food cost budget that fits your operation. A fine dining, sub shop as well as different types of caterers may all have different food cost goals. This can be due to overhead & operations as well as the price range and quality level each company is competing at.2)Each item must be cost out to current market prices and updated periodically. For example beef prices are expected to go up 10% this summer. We plan for this each year by re-costing our items often and “re-mixing” the menu yearly.3) Menu mix is a mixture of high, low and median cost items based on sales for each item that will help you achieve your final food cost goal. We track the sales by item and plan new items to fit gaps. Train your sales force to sell items more advantageous to you.
- By taking thigh meat and converting it to a meatballs and pasta we add the “perceived Value” of a higher priced item.For example “Homemade Bavarian Bratwurst” carries a higher perceived value than the pork butt you start with.Making from scratch items is much better for the food cost. You must consider your work load, skill level and wages & hours to see what fits you best.
- This dish we cost close to our budget and will absorb some increase with the menu price before we consider raising.The menu mix gives you the ability to do this and not raise prices every time a particular item goes up in price.All of our beef is Certified Angus Beef©; ground beef, brisket, tri-tips, top rounds fresh cooked for roast beef deli meat, flank steak and tenderloins.We really like the product and feel it definitely adds value to any beef dish.
- You can see for illustration that if we sold equal amounts of these two items we get a great over all cost of sales.This is a simplified example, in real time we take into account most all menu items and how much of each has sold and is expected to sell in the future.
- Higher priced menu items can carry a higher food cost because you will bring more actual dollars to the table.A high volume event does basically the same thing by having the opportunity to serve a larger amount of people you will bring in more dollars than you would have on normal sales.Establishing your guidelines depends on a lot of variable in your own business; budget, overhead, debt, level of sales. What a large event is for you is not the same for each one of your competitors.Some own more of there own equipment. Some have less staff. Some owners have more or less of a role in the production and sales.
- In this case we have a higher food cost.Good Perceived value based on Menu Item and Brand,We are taking a higher food cost at this price and we are returning more dollars to the business.
- As you can see the filet is bringing more physical dollars. This is why a busy upscale restaurant can do well with a higher food cost as there whole menu is in a higher price range.If it is really good food you have an equal perceived value for dollar spent, even though we are at different price points
- Story: Joe’s Chicken has a 20% Food Cost and Sells $10 meals, while across the street Jake’s Lobster House sells $30 dollar meals at a 40% food cost.Joe has a better food cost while Jake makes gross profit of $18 dollars a meal to Joe’s $8
- A sale you get is better than no sale provided it is within your price & cost range.
- Feel free to email me or give me a call if I can discuss or help you with anything. Thank you.