Food cost control involves setting standards for costs according to business objectives and policies. It aims to control costs related to food including cost of food cooked, wastage, spoilage, and shrinkage/pilferage. Key aspects of food cost control involve planning, operations such as purchasing and storage, and control after the event through reporting and assessment. The overall goal is to analyze income and expenses to maximize profits while maintaining quality and customer satisfaction. Factors like menu planning, purchasing, skills, and waste avoidance can impact the percentage of food costs.

1. Food cost controlFood cost control
• It can be defined as guidance and regulation of cost of
operations.
• Under taking to guide and regulate cost needs to
ensure that they are in accordance of the
predetermined objectives of the business.
• Guidance and regulations of cost are set as per
expressed in the policy statements and budget of
undertakings:

2. Cont..Cont..
• Food cost control means :
• You have a stick to your predetermined standards.
• Set standards appropriate to your market before you
buy, prepare and sell food.
• Cost control procedures.

3. What is Food Cost?What is Food Cost?
Cost of Food Cooked
+
Wastage
+
Spoilage
+
Shrinkage/ Pilferage

4. What isWhat is NotNot Food Cost Control?Food Cost Control?
Bringing down the cost at the expense of
• Quality & Guest Satisfaction
Attitude:
• Penny Wise, Pound Foolish
• Golden Goose

5. Why should you Control Food Cost ?Why should you Control Food Cost ?
• Rs.1 Saved = Rs.10 Sales
• Adds Straight to the Bottom Line
• Competitive World

6. How do you Control Cost?How do you Control Cost?
1. Shrinkage/ Pilferage
Short Term: Better Security System
Long Term: Create a working atmosphere,
where people belong and are proud to
be contributing to the growth of the
company

7. How do you Control Cost?How do you Control Cost?
2. Spoilage
• Better Storage Facilities
• Better Kitchen Design
• Stock Management

8. How do you Control Cost?How do you Control Cost?
3. Wastage
• Temporary / Stressful / Negative / Life
reducing way: Policing
• Permanent / Enjoyable / Positive / Life
enhancing way: Bring in a culture of High
Performance

9. How do you Control Cost?How do you Control Cost?
4. Cost of Food Cooked
• Planning the Quantity
• Ensuring the Quality

10. ObjectiveObjective
• To analyze income and expenditure:-
– Gross profit = sales – food cost
– Net profit = sales – (food cost + labour cost + overheads)
• Pricing of food:-
Selling Price = food cost + labour cost + overheads + profit
(20-30%) (7-10%) (6-10%) (50%)
• Prevention of inefficiencies:-
• Data for the management:-

11. Factors affecting the percentage ofFactors affecting the percentage of
food cost-food cost- HurdlesHurdles
• Food Purchasing
• Menu Planning
• Method of pricing
• Culinary Skills
• Service Skills
• Avoiding Wastage

12. Phase of control proceduresPhase of control procedures
• Planning
• Operational
• Control after the event

13. Phases of Control
Planning Operation Control after the Event
Finanacial Marketing Catering Purchasing Receiving Storing Issuing Production Sales Reporting Assesment Correction

14. Financial PlanningFinancial Planning
• Budget- Whole organization & single unit
• Total Revenue
• Expenditure
• Borrowing
• Profit
• Shares
• Debentures

15. MarketingMarketing
• Segment
• Clientele
• Turn over
• Market Share
• Average Spending Power
• Choice
• Trends
• Advertisement
• Promotions

16. CateringCatering
• The type of customer
• The type of menu
• Beverage provision necessary for operation
• Food quality standard
• Method of pricing
• Type and quality of service
• Degree and décor and comfort
• Type and style of table and chairs

17. OperationsOperations
• Purchasing
• Receiving
• Storing
• Issuing
• Production control
• Sales control

18. Management control after theManagement control after the
eventevent
• F & B cost reporting
• Assessment
• Correction

19. Cont..Cont..
Operation
Control After the Event
Planning

20. METHOD OF FOOD CONTROLMETHOD OF FOOD CONTROL
• a) Weekly/monthly food cost report-
This system is used by small organization
where manager controls each activity as
daily routine. It is a reconciliation report of
daily activities. The calculation procedure
is
• Opening stock + total purchase for the
period – closing stock = total food sale

21. • b) Daily food cost report- This method is
used in medium sized operation.

22. Problems of F&B IndustryProblems of F&B Industry
• PERISHABILITY OF THE PRODUCT
• UNPREDICTABILITY OF VOLUME OF BUSINESS
• UNPREDICTABILITY OF THE MENU MIX:
• SHORT CYCLE OF CATERING OPERATION
• DEPARTMENTALIZATION