2. 2
Rationale
Everything starts with the menu. The menu
dictates much about how your operation will
be organized and managed, the extent to
which it meet its goals, and even how the
building itself - certainly the interior - should
be designed and constructed.
3. 3
Objectives
īˇ To explain the importance of a menu
īˇ To explain the basic rules of menu planning
īˇ To identify factors to be considered when
planning a menu
īˇ To identify constraints in menu planning
īˇ To plan and write a menu
4. 4
Must Satisfy Guest Expectations
īˇ Reflect your guestsâ tastes
īˇ Reflect your guestsâ food preferences
īˇ Ascertain your guestsâ needs
5. 5
Must attain Marketing Objectives
īˇ Locations
īˇ Times
īˇ Prices
īˇ Quality
īˇ Specific food items
6. 6
Must help to achieve
Quality Objectives
īˇ Quality standards:
flavor, texture, color, shape, flair,
consistency, palatability, visual appeal,
aromatic apparel, temperature
īˇ Nutritional concerns:
low-fat, high-fiber diets, vegetarian
7. 7
Must be Cost-Effective
īˇ Commercial
financial restraints
profit objectives
īˇ Institutional
minimizing costs
operational budget
8. 8
Must be Accurate
īˇ Truth-in-menu laws exist in some localities,
cannot mislabel a product
īŽ âbutterâ must use butter not margarine
īŽ âfreshâ must be fresh, not fresh frozen
īŽ âhomemadeâ not purchased âready-to-heatâ
īŽ âUSDA Choiceâ actually âUSDA Goodâ
12. 12
Ingredients
īˇ Standard recipe
īˇ Availability of the
ingredients required
during the life span of
the menu
īˇ Seasonal ingredients
īˇ Cost
īˇ Miscellaneous cost
(flight charges, storage)
16. 16
The Menu Helps to Determine
Staff Needs
īˇ Variety and complexity increases, number of
personnel increases
īŽ Production staff
īŽ Service staff
īŽ Back-of-house staff
17. 17
The Menu Dictates Production
and Service Equipment Needs
Tableside service
īˇ carving utensils, trolleys,
gueridon, salad bowls,
suzette pans, souffle dishes,
soup tureens, large wooden
salad bowl, rechaud, Voiture
(heated cart for serving
roasts) and ......
18. 18
The Menu Dictates Dining Space
īˇ A take-out sandwich or pizza operation would require no
dining space and the amount of square feet required per
person would be minimal.
īˇ 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.
19. 19
Purchase Specifications May
Be Dictated By The Menu
īˇ 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. (When
such factors as grade and portion size are not
dictated by the menu, managers and chefs must
determine purchase specifications and related
quality factors.)
20. 20
How and When Items
Must Be Prepared
īˇ To stimulate guest interest, the menu planner may
offer a dish prepared in a variety of ways:
īŽ Cooking methods
īŽ Poached, broiled, batter-dipped, deep fried
īˇ The finished product must be prepared using the
method indicated on the menu
īˇ Small quantities cooking (a la carte)
īˇ Batch cooking
21. 21
The Menu is a Factor in the Development
of Cost Control Procedures
īˇ As the menu requires more expensive food
items and more extensive labor or capital
(equipment) needs, the propertyâs overall
expenses and the procedures to control them
will reflect these increased cost.
22. 22
The Menu and the Service Plan
īˇ Type and size of dinnerware
īˇ Types of flatware
īˇ Garnishes (place be service or production staff)
īˇ Timing requirement for ordering
īˇ Additional dining service supplies to serve the item
īˇ Special serving produces
īˇ Special information (doneness of the steaks, over
easy or sunny side eggs, etc.)
23. 23
Menu Design
īˇ First impression is always important, the entire
menu should complement the operation
- Theme
- Interior Decor
- Design (Merchandising)
- Creativity
- Material
- Color
- Space
24. 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)
- Operations address
- Beverage service notice
- Separate menus for each meal period
- Separate menu for host/hostess and guests
25. 25
Menu Styles
īˇ A table d'hôte (a complete meal for one price)
īˇ A la Carte (items are listed and priced separately)
īˇ Combination (combination of the table d'hôte and a
la carte pricing styles)
īˇ Fixed menus: a single menus for several months
īˇ Cycle menus: designed to provide variety for guests
who eat at an operation frequently - or even daily
26. 26
Types Of Menus
īˇ Breakfast
(offers fruits, juices, eggs, cereals, pancakes,
waffles, and breakfast meats)
īˇ Lunch
(features sandwiches, soups, salads, specials;
usually lighter than dinner menu items)
īˇ Dinner
(more elaborate, steaks, roasts, chicken, sea food
and pasta; wines, cocktails, etc..)
27. 27
Types Of Menus - Specialty
īˇ Childrenâs
īˇ Senior citizensâ
īˇ Alcoholic beverage
īˇ Dessert
īˇ Room service
īˇ Take-out
īˇ Banquet
īˇ California (breakfast, lunch and dinner menu items on one
menu)
īˇ Ethnic
28. 28
Basic Rules Of Menu Planning
īˇ Know your guest
- Food preference
- Price
- Age
īˇ Know your operation
- Theme or cuisine
- Equipment
- Personnel
- Quality standards
- Budget
30. 30
Common Sources
For Menu Item Recipes
īˇ Old menus
īˇ Books
īˇ Trade magazines
īˇ Cookbooks for the
home market
31. 31
Menu Balance
īˇ Business balance
- balance between food cost, menu prices,
popularity of items, financial and marketing
considerations
īˇ Aesthetic balance
- colors, textures, flavors of food
īˇ Nutritional balance
32. 32
Elements Of Menu Copy
īˇ Headings
- Appetizers
- Soups
- Entrees
īˇ Sub-heading
- Under entree:
īŽ Steak, seafood, todayâs specials
33. 33
Elements Of Menu Copy
īˇ 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
34. 34
Truth-in-menu
īˇ Grading (foods are graded by size, quality, in line
with official standards)
īˇ âFreshnessâ (cannot be canned, frozen or fresh-
frozen)
īˇ Geographical origin (cannot make false claims
about the origin of a product)
īˇ Preparation (if the menu says baked, it cannot be
fried instead)
īˇ Dietary or nutrition claims (supportable by
scientific data)
35. 35
Supplemental Merchandising
Copy
Includes information such as:
īˇ Address
īˇ Telephone number
īˇ Days and hours of operation
īˇ Meals served
īˇ Reservations and payment policies
īˇ History of the restaurant
īˇ A statement about managementâs commitment to
guest service
36. 36
Menu Layout
īˇ Sequence:
īˇ Appetizers, soups, entrees, desserts
īŽ Depends on the operation (side orders, salads,
sandwiches, beverages)
īŽ Depends on popularity and profitability
īˇ Placement:
īˇ artworks; space; boxes; clip-on; etc.
39. 39
Common Menu-design
Mistakes
īˇ Menu is too small
īˇ Type is too small
īˇ No descriptive copy
īˇ Every item treated the same
īˇ Some of the operationsâ food and beverages are not
listed
īˇ Clip-on problems
īˇ Basic information about the property and its
policies are not included
īˇ Blank pages
41. 41
Menu Evaluation:
Questions Most Often Asked
īˇ Is the menu attractive?
īˇ Do the colors and other design elements match the
operationâs theme and decor?
īˇ Are menu items laid out in an attractive and logical
way?
īˇ Is there too much descriptive copy? Not enough? Is
the copy easy to understand?
īˇ Is attention called to the items managers most want
to sell, through placement, color, description, type
size, etc.?
42. 42
Menu Evaluation:
Questions Most Often Asked
īˇ Have guests complained about the menu?
īˇ Have guests said good things about the menu?
īˇ How does the menu compare with the menus of
competitors?
īˇ Has the average guest check remained steady or
increased?
īˇ Is there enough variety in menu items?
īˇ Are menu items priced correctly?
īˇ Are you selling the right mix of high-profit and
low-profit items?
43. 43
Menu Evaluation:
Questions Most Often Asked
īˇ Is the typeface easy to read and
appropriate to the restaurantâs
theme and decor?
īˇ Is the paper attractive and stain-
resistant?
īˇ Have the menus been easy to
maintain so that guests always
receive a clean, attractive menu?
44. 44
Menu Pricing
SUBJECTIVE PRICING:
īˇ The reasonable price method: from the guestâs
perspective - what charge is fair and equitable
īˇ The highest price method: sets the highest price that
the manager thinks guests are willing to pay
īˇ The loss lender price method: an unusually low
price is set for an item to attract guests
īˇ The intuitive price method: takes a wild guest,
trail-and-error
45. 45
Menu Pricing
DESIRED FOOD COST PERCENTAGE PRICING
METHOD:
īˇ manager determines a reasonable food cost percent
īˇ then divides a menu itemâs standard food cost by its
reasonable food cost percent
Selling price = $1.50 (itemâs standard food cost) = $4.55
0.33 (desired food cost percent)
47. 47
Menu Pricing
COMPETITION AND PRICING:
īˇ Know competitorâs menus, selling prices, and
guest preferences
īˇ Lower your prices
īˇ Raise your prices
īˇ 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
48. 48
The Menu:The Foundation For Control
GUEST SATISFACTION
SERVING
HOLDING
COOKING
PREPARING
ISSUING
STORING
RECEIVING
PURCHASING
MENU PLANNING
PRODUCTION ACTIVITIES
BASIC OPERATING ACTIVITIES:
CONTROL POINTS
49. 49
The Menu Influences
īˇ Product Control Procedures
every item on the menu represents a product to be controlled
īˇ Cost Control Procedures
careful cost control procedures must be followed,
particularly when expensive products and labor-intensive
service styles are used
īˇ Production Requirement
product quality, staff productivity and skills, timing and
scheduling, and other back-of-the-house functions are all
dictated by the menu
50. 50
The Menu Influences
īˇ Equipment Needs
equipment must be available to prepare products required by
the menu
īˇ Sanitation Management
īˇ management must consider menu items in light of possible
sanitation hazards
īˇ 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
51. 51
The Menu Influences
īˇ Staffing Needs
as menu becomes more complex, greater demands may be
placed upon the staff
īˇ 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
īˇ Sales Income Control Procedures
elaborate menus require more stringent controls than simple
menus
52. 52
Menu Planning
is also.. A Tool for:
īˇ Sales
lists the items an operation is offering for sale
īˇ Advertising
communicates a propertyâs food and beverage marketing
plans
īˇ Merchandising
target market expectations - products, service, ambience
(theme and atmosphere), perceived value
īˇ Marketing Tool
strive to meet or exceed the expectations of its target market
53. 53
Nutritional Content
Priority Concerns of menu Planner
Wants and needs
Concept of Value
Item Price
Object of Property Visit
Socio-Economic Factors
Demographic Concerns
Ethnic Factors
Religious Factors
Guest
Quality of Item
Cost
Availability
Peak Volume Production
and Operating Concerns
Sanitation Concerns
Layout Concerns
Equipment Concerns
Flavour
Consistency
Texture/Form/Shape
Visual Appeal
Aromatic Appeal
Temperature
Priority Concerns Of
The Menu Planner
54. 54
Menu Planning Strategies
īˇ Rationalization
its objective is simplification for the sake of
operational efficiency
i.e., cross-utilization menu items use the same raw
ingredients
- Menu when carefully plan can be a 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
55. 55
Factors That Influence Menu
Planning Strategies
īˇ Needs and wants of target markets
īˇ Several items from same ingredients
īˇ Storage requirements
īˇ Personnel skill levels
īˇ Product availability / seasonality
īˇ Quality and price stability
īˇ Sanitation procedures
56. 56
External Factors
That Influence Menu Changes
īˇ Consumer Demands
decide which potential markets wants to attract
īˇ Economic Conditions
cost of ingredients, potential profitability of new menu items
īˇ Competition
many not want to serve next doorâs best
īˇ Supply Levels
seasonal items, price to the quality and quantity
īˇ Industry Trends
industryâs response to new demands
57. 57
Internal Factors
That Influence Menu Changes
īˇ Facility Meal Patterns
existing meal periods - breakfast, lunch and dinner
īˇ Concept and Theme
the image may rule out certain foods that do not
blend with its theme and decor
īˇ Operational System
costs for new equipment to the successful
production and service of new menu items
58. 58
Pricing Approaches
īˇ Subjective Price Methods
intuition and knowing your guests (failed to relate
profit and costs)
īˇ The Reasonable Price Methods
presumes value to the guest (what charge is fair and
equitable)
īˇ The Highest Price Method
sets the highest price the guests are willing to pay
59. 59
Pricing Approaches
īˇ The Loss Leader Method
an unusually low price is set for an item (or items)
to bring guests in
īˇ The Intuitive Price Method
wild guess about the selling price
(pricing methods based on assumptions, hunches
and guesses)
60. 60
Pricing Approaches
īˇ Simple Mark-up Pricing Methods
designed to cover all costs and to yield the desired
profit.
Three Steps:
1. Determine the ingredientsâ costs
2. Determine the multiplier
3. Establish a base selling price
62. 62
Base Selling Price
If ingredient cost is $3.32
Base Selling Price = Ingredient Cost x Multiplier
$8.30 = $3.32 x 2.5
A base selling price in not necessarily the final selling price
65. 65
Determining the Price Multiplier
Based upon:
īˇ experience or ârule of thumbâ
īˇ contribution margin
īˇ impact of sales mix
īˇ does not reflect higher or lower labor cost
īˇ assume food cost associated with producing menu
item are know
66. 66
Contribution Margin
Pricing Method
Contribution Margin refers to the amount left after a menu
itemâs food cost is subtracted from its selling price.
Two steps in setting base selling price:
1. Determine the average contribution margin required
per guest
Non-Food + Required Profit = Ave. Contribution Margin Required/guest
No. of Expected guests
$295,000 + $24,000 = $3.75
85,000
67. 67
Contribution Margin
Pricing Method
2. Determine the base selling price for a menu item
Base selling price = average contribution margin + Standard food cost
$7.35 = $3.75 + $3.60
68. 68
Ratio Pricing Method
The 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 steps
1. Determine the ration 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
69. 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 item
Base Selling Price = Non-food cost and profit required + Standard food cost
$8.78 = $5.03 + $3.75
70. 70
Simple Prime Costs Method
The 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
71. 71
Simple Prime Costs Method
2. Determine the prime costs per guest
Prime Cost per guest = Labour cost per guest + menu itemâs 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
72. 72
Specific Prime Cost Method
Specific 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.
īˇ Divide the menu items into 2 categories:
(A) extensive preparation
(B) non extensive preparation
īˇ clean up, and other non-preparation activities
73. 73
Specific Prime Cost Method
īˇ 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,
74. 74
Specific Prime Cost Method -
Calculations
(1) (2) (3) (4)
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%
īˇ Operating Category A Category B
Budget Item Budget % (extensive preparation) (Non-extensive
Preparation)
īˇ Items Items
75. 75
Important Pricing Considerations
īˇ The Concept of Value (price relative to quality)
īˇ The Basic Law of Supply and Demand
īˇ Volume Concerns Must be Considered
īˇ Price Charged by the Competition for a similar Product
76. 76
Evaluating The Menu:
Menu Engineering
Basic Menu Engineering Process:
īˇ Stars - items that are popular profitable
īˇ Plowhorses - items that are not profitable but popular
īˇ Puzzles - items that are profitable but no popular
īˇ Dogs - items that are neither profitable nor popular
77. 77
Defining Profitability
īˇ Contribution Margin
a âhighâ 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
78. 78
Defining Popularity
Popular Index bases upon the notion of âexpected popularityâ
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% Ãˇ 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
79. 79
Menu Engineering Worksheet
Menu Engineering Worksheet
Date: 6/10/00 _________________
Restaurant: ____________________________ Meal Period: Dinner
(A)
Menu
Item
Name
(B)
Number
Sold
(MM)
(C)
Menu
Mix
%
(D)
Item
Food
Cost
(E)
Item
Selling
Price
(F)
Item
CM
(E - D)
(G)
Menu
Costs
(D x B)
(H)
Menu
Revenues
(E x B)
(L)
Menu
CM
(H - G)
(P)
CM
Category
(R)
MM%
Category
(S)
Menu
Item
Classific-
ation
Chicken
Dinner 420 42% $2.21 $4.95 $2.74 $928.20 $2079.00 $1150.80 Low High
Plow-
horse
NY Strip
Steak 360 36% 4.50 8.50 4.00 1,620.00 3,060.00 1,440.00 High High Star
Lobster
Tail 150 15% 4.95 9.50 4.55 742.50 1,425.00 682.50 High Low Puzzle
Tenderloin
Tips 70 7% 4.00 6.45 2.45 280.00 451.50 171.50 Low Low Dog
Column
Totals
N
1,000
l
$3570.70
J
$7015.50
M
$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)
80. 80
Improving The Menu
Managing Plowhorses
Items low in contribution margin, but high in popularity
īˇ Increase prices carefully
īˇ Test for demand
īˇ Relocate the item to a lower profile on the menu
īˇ Shift demand to more desirable items
īˇ Combine with lower cost products
īˇ Assess the direct labor factor
īˇ Consider portion reduction
81. 81
Improving The Menu
Managing Puzzles
Items high in contribution margin but low in
popular
īˇ Shift demand to these items
īˇ Consider a price decrease
īˇ Add value to the item
82. 82
Improving The Menu
Managing Stars
Items high in contribution margin and high in
popularity
īˇ Maintain rigid specifications
īˇ Place in a highly visible location on the menu
īˇ Test for selling price inelasticity
īˇ Use suggestive selling techniques
83. 83
Improving The Menu
Managing Dogs
Items that are low in contribution margin and low
in popularity:
Candidates for removal from the menu