The restaurant business looks like a glamorous one, but it needs a lot of passion and commitment like no other to run a successful restaurant. Certain investments in a restaurant are reflected in its decor, expensive cutlery and the likes. However, most diners aren't aware of the cost that goes into what arrives on the plate in front of them. But then, that's not a diner's headache either. The responsibility of economics falls squarely on the restaurateur. Which is precisely why some questions are worth tackling: As a restaurateur, to what degree are you involved in managing food costs? Are you aware of hidden costs within your general food expenses? Do you know how you can trim most of these costs?
As a golden rule, in a hurry to get operations up and running, you should not compromise on what goes into the food that comes out of your restaurant's kitchen. If you choose shortcuts and go cheap in order to cut down costs and increase profits, diners will be the first to recognize the drop in the quality of food being served. As we know, for a restaurant, reputation is everything.
On the other hand, to serve (consistently) good quality food, if you choose to go with expensive imported ingredients your costs will hit the roof. Be wise with how you work with your vendors and use your supply of produce. Unlike many other investments, food cost is a recurring one. Which is why you need to know how to control it in a way that it doesn't eat into your profit margins.
Yogesh Mukashi from Bangalore's Egg Factory gives us insights on a few smart ways to reduce food costs.
1. Manage vendors
Give yourself some time to zero in on the right vendors. Consider this to be as important as hiring your staff. Come to think of it, you are hiring a vendor. Meet as many vendors as you can. Ask for recommendations. Compare their prices to make an informed decision. Find the ones that provide you good quality produce at a reasonable price instead of plain cheap produce.
If you're hoping to include a healthy section in your menu with currently trending superfoods, ensure you plan this well bearing in mind how expensive the end product might be and how you would price it. The same principle applies to gourmet foods like imported cheese and other dairy products, cured meats, oils and such. Another important factor is to be sure that you are getting what you paid for. Ensure the supplier gives you the exact amount of what you're being invoiced for.
"It's very easy for suppliers to con you. For instance, you should make sure you're not getting 80kg instead of the 100kg that you have been invoiced for. That can happen if you stop paying attention."
2. Refine recipes
Once you have your menu down, it's time to calculate how much one dish will cost you per portion. Doing this will help you understand whether or not the food cost is high or low, and price your dish accordingly. If that's too much for you to do, refine your recipes. On paper, your recipe might be right, but unless your chefs don't execute it exactly it won't matter. Work on your recipes till they become a standard. Chefs also need to understand the importance of food costs and how it impacts the business overall.
"Refine your recipe and bring it to a point where it's a standard recipe to be followed to the T by your chefs. They play a key role in the economics. Listen to them."
3. Revise the menu
Your food costs being high doesn't justify frequent and steep bumps in menu prices. Take a step back before increasing the prices and have a good look at what's adding to your costs. A root cause analysis will help you understand the situation better and find appropriate solutions. Adding a specials menu is a good way of keeping food costs in check. Ideally, low value produce can be a part of the special menu to create higher value. By doing so, you also end up facilitating variety to your customers. It is also a great way to keep your chefs motivated and have them innovate by going off the regular menu.
"Food inflation has been steep for the past 5 or 6 years. But that doesn't mean you simply hike your prices. The market won't be ready to absorb such hikes."
4. Manage waste
The ground rule says "buy what is enough" and for a very good reason. Plan your purchases in a way that you don't end up wasting produce. Maintain a log and keep a check on what's going into that waste bin. If you have to go through your bins to be sure, do it. By doing so, you'll be setting an example and your staff will be careful about unnecessary wastage. Be aware of the cost that goes into making a dish. If you see this eating into your time, appoint someone as a monitor in the kitchen. Planning ahead will also help with managing waste. Basically, look at it as money being thrown in the garbage bin.
5. Rotate stock
This would ideally be a step before you get to monitor waste. If you're smart with the stock in your pantry, wastage will also reduce. Label your stock with "receive" dates so you know when they got there and will give you time to use them wisely. A good option is to rotate the stock based on the "receive" labels. Use up the older ones before laying hands on the newer stock. This in turn will help with waste control and eventually with cost control. Without knowing when you received something, it becomes a guessing game and invariably you'll end up throwing away food that could have been used on time.
"You need to continuously review ingredients because of price fluctuations and availability. At times, the recipe will permit changes and at other times you need to completely drop it from the menu."