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1 MENU PLANNING From design to evaluation. 2 Rationale Everything starts with the menu. The menu dictates much about how your operation will be organized.

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Presentation on theme: "1 MENU PLANNING From design to evaluation. 2 Rationale Everything starts with the menu. The menu dictates much about how your operation will be organized."— Presentation transcript:

1 1 MENU PLANNING From design to evaluation

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 To explain the importance of a menu To explain the basic rules of menu planning To identify factors to be considered when planning a menu To identify constraints in menu planning To plan and write a menu

4 4 Must Satisfy Guest Expectations Reflect your guests tastes Reflect your guests food preferences Ascertain your guests needs

5 5 Must attain Marketing Objectives Locations Times Prices Quality Specific food items

6 6 Must help to achieve Quality Objectives Quality standards: flavor, texture, color, shape, flair, consistency, palatability, visual appeal, aromatic apparel, temperature Nutritional concerns: low-fat, high-fiber diets, vegetarian

7 7 Must be Cost-Effective Commercial financial restraints profit objectives Institutional minimizing costs operational budget

8 8 Must be Accurate Truth-in-menu laws exist in some localities, cannot mislabel a product butter must use butter not margarine fresh must be fresh, not fresh frozen homemade not purchased ready-to-heat USDA Choice actually USDA Good

9 9 Menu Planning Constraints

10 10 Facility Layout/Design and Equipment Space Equipment available Work flow Efficiency

11 11 Available Labor Number of Employees Required Skills Training Programs

12 12 Ingredients Standard recipe Availability of the ingredients required during the life span of the menu Seasonal ingredients Cost Miscellaneous cost (flight charges, storage)

13 13 Marketing Implications Social needs Physiological needs Type of service (fast food, leisure dinning) Festival Nutrition

14 14 Quality Levels and Costs Guests expectation Employees skills and knowledge Availability of equipment Specific ingredients Food costs and selling prices

15 15 The Menu and the Food Service Operation

16 16 The Menu Helps to Determine Staff Needs Variety and complexity increases, number of personnel increases Production staff Service staff Back-of-house staff

17 17 The Menu Dictates Production and Service Equipment Needs Tableside service 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 A take-out sandwich or pizza operation would require no dining space and the amount of square feet required per person would be minimal. 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 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 To stimulate guest interest, the menu planner may offer a dish prepared in a variety of ways: Cooking methods Poached, broiled, batter-dipped, deep fried The finished product must be prepared using the method indicated on the menu Small quantities cooking (a la carte) Batch cooking

21 21 The Menu is a Factor in the Development of Cost Control Procedures As the menu requires more expensive food items and more extensive labor or capital (equipment) needs, the propertys overall expenses and the procedures to control them will reflect these increased cost.

22 22 The Menu and the Service Plan Type and size of dinnerware Types of flatware Garnishes (place be service or production staff) Timing requirement for ordering Additional dining service supplies to serve the item Special serving produces Special information (doneness of the steaks, over easy or sunny side eggs, etc.)

23 23 Menu Design 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 A table d'hôte (a complete meal for one price) A la Carte (items are listed and priced separately) Combination (combination of the table d'hôte and a la carte pricing styles) Fixed menus: a single menus for several months Cycle menus: designed to provide variety for guests who eat at an operation frequently - or even daily

26 26 Types Of Menus Breakfast (offers fruits, juices, eggs, cereals, pancakes, waffles, and breakfast meats) Lunch (features sandwiches, soups, salads, specials; usually lighter than dinner menu items) Dinner (more elaborate, steaks, roasts, chicken, sea food and pasta; wines, cocktails, etc..)

27 27 Types Of Menus - Specialty Childrens Senior citizens Alcoholic beverage Dessert Room service Take-out Banquet California (breakfast, lunch and dinner menu items on one menu) Ethnic

28 28 Basic Rules Of Menu Planning Know your guest - Food preference - Price - Age Know your operation - Theme or cuisine - Equipment - Personnel - Quality standards - Budget

29 29 Selecting Menu Items Menu category: Appetizers Salads Entrees Starch items (potatoes, rice, pasta) Vegetables Desserts Beverages

30 30 Common Sources For Menu Item Recipes Old menus Books Trade magazines Cookbooks for the home market

31 31 Menu Balance Business balance - balance between food cost, menu prices, popularity of items, financial and marketing considerations Aesthetic balance - colors, textures, flavors of food Nutritional balance

32 32 Elements Of Menu Copy Headings -Appetizers -Soups -Entrees Sub-heading -Under entree: Steak, seafood, todays specials

33 33 Elements Of Menu Copy 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 Grading (foods are graded by size, quality, in line with official standards) Freshness (cannot be canned, frozen or fresh- frozen) Geographical origin (cannot make false claims about the origin of a product) Preparation (if the menu says baked, it cannot be fried instead) Dietary or nutrition claims (supportable by scientific data)

35 35 Supplemental Merchandising Copy Includes information such as: Address Telephone number Days and hours of operation Meals served Reservations and payment policies History of the restaurant A statement about managements commitment to guest service

36 36 Menu Layout Sequence: Appetizers, soups, entrees, desserts Depends on the operation (side orders, salads, sandwiches, beverages) Depends on popularity and profitability Placement: artworks; space; boxes; clip-on; etc.

37 37 Menu Layout Format: Menus size General makeup Typeface: Printed letters Font size Type face

38 38 Menu Layout Artwork: Drawings, photographs, decorative patterns, borders Paper: Texture Cover: Color Texture

39 39 Common Menu-design Mistakes Menu is too small Type is too small No descriptive copy Every item treated the same Some of the operations food and beverages are not listed Clip-on problems Basic information about the property and its policies are not included Blank pages

40 40 Evaluating Menus Must set standards Determine how menu is helping to meet standards

41 41 Menu Evaluation: Questions Most Often Asked Is the menu attractive? Do the colors and other design elements match the operations theme and decor? Are menu items laid out in an attractive and logical way? Is there too much descriptive copy? Not enough? Is the copy easy to understand? 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 Have guests complained about the menu? Have guests said good things about the menu? How does the menu compare with the menus of competitors? Has the average guest check remained steady or increased? Is there enough variety in menu items? Are menu items priced correctly? Are you selling the right mix of high-profit and low-profit items?

43 43 Menu Evaluation: Questions Most Often Asked Is the typeface easy to read and appropriate to the restaurants theme and decor? Is the paper attractive and stain- resistant? Have the menus been easy to maintain so that guests always receive a clean, attractive menu?

44 44 Menu Pricing SUBJECTIVE PRICING: The reasonable price method: from the guests perspective - what charge is fair and equitable The highest price method: sets the highest price that the manager thinks guests are willing to pay The loss lender price method: an unusually low price is set for an item to attract guests The intuitive price method: takes a wild guest, trail-and-error

45 45 Menu Pricing DESIRED FOOD COST PERCENTAGE PRICING METHOD: manager determines a reasonable food cost percent then divides a menu items standard food cost by its reasonable food cost percent Selling price = $1.50 (items standard food cost) = $ (desired food cost percent)

46 46 Menu Pricing PROFIT PRICING: factors profit requirements and non-food expenses into menu item selling prices Allowable = $300,000 - $189,000 - $15,000 = $ food costs (forecasted (non-food (profit food sales) expenses) requirements) Budgeted food cost % = $96,000 (allowable food costs) = 0.32 or 32% $300,000 (forecasted food sales)

47 47 Menu Pricing COMPETITION AND PRICING: Know competitors menus, selling prices, and guest preferences Lower your prices Raise your prices 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


49 49 The Menu Influences Product Control Procedures every item on the menu represents a product to be controlled Cost Control Procedures careful cost control procedures must be followed, particularly when expensive products and labor-intensive service styles are used 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 Equipment Needs equipment must be available to prepare products required by the menu Sanitation Management management must consider menu items in light of possible sanitation hazards 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 Staffing Needs as menu becomes more complex, greater demands may be placed upon the staff 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 Sales Income Control Procedures elaborate menus require more stringent controls than simple menus

52 52 Menu Planning is also.. A Tool for: Sales lists the items an operation is offering for sale Advertising communicates a propertys food and beverage marketing plans Merchandising target market expectations - products, service, ambience (theme and atmosphere), perceived value 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 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 Needs and wants of target markets Several items from same ingredients Storage requirements Personnel skill levels Product availability / seasonality Quality and price stability Sanitation procedures

56 56 External Factors That Influence Menu Changes Consumer Demands decide which potential markets wants to attract Economic Conditions cost of ingredients, potential profitability of new menu items Competition many not want to serve next doors best Supply Levels seasonal items, price to the quality and quantity Industry Trends industrys response to new demands

57 57 Internal Factors That Influence Menu Changes Facility Meal Patterns existing meal periods - breakfast, lunch and dinner Concept and Theme the image may rule out certain foods that do not blend with its theme and decor Operational System costs for new equipment to the successful production and service of new menu items

58 58 Pricing Approaches Subjective Price Methods intuition and knowing your guests (failed to relate profit and costs) The Reasonable Price Methods presumes value to the guest (what charge is fair and equitable) The Highest Price Method sets the highest price the guests are willing to pay

59 59 Pricing Approaches The Loss Leader Method an unusually low price is set for an item (or items) to bring guests in The Intuitive Price Method wild guess about the selling price (pricing methods based on assumptions, hunches and guesses)

60 60 Pricing Approaches Simple Mark-up Pricing Methods designed to cover all costs and to yield the desired profit. Three Steps: 1.Determine the ingredients costs 2.Determine the multiplier 3.Establish a base selling price

61 61 Multiplier If food cost is to be 40% Multiplier = 1 / desired food cost% = 1 /.40 = 2.5

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

63 63 Prime-Ingredient Mark-Up Method Base selling price = Prime Ingredient Cost x Multiplier $8.30 = $1.59 x 5.22 or food cost is about 19%

64 64 Mark-Up with Accompaniment Costs Entree / Primary Costs $3.15 Plate Cost +$1.25 Food Cost $4.40 Mark-Up Multiplier x 3.3 (30% food cost) Base Selling Price $14.52

65 65 Determining the Price Multiplier Based upon: experience or rule of thumb contribution margin impact of sales mix does not reflect higher or lower labor cost 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 items 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 = $ ,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 = $ $3.60

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 Determine the base selling price for the menu item Base Selling Price = Non-food cost and profit required + Standard food cost $8.78 = $ $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 items food cost $6.55 = $ $ 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. Divide the menu items into 2 categories: (A) extensive preparation (B) non extensive preparation clean up, and other non-preparation activities

73 73 Specific Prime Cost Method 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 Cost30%55% of 30% = 17%40% of 13% = 5% All Other Cost20%60% of 13% = 8% 40% of 20% = 8% Profit15%60% of 15% = 9%40% of 15% = 6% Total 100% 67% 33% Mark-Up 100% =2.9% 67% = % = 2.4 Multiplier 35% 21% 14% Operating Category A Category B Budget Item Budget % (extensive preparation) (Non-extensive Preparation) Items Items

75 75 Important Pricing Considerations The Concept of Value (price relative to quality) The Basic Law of Supply and Demand Volume Concerns Must be Considered Price Charged by the Competition for a similar Product

76 76 Evaluating The Menu: Menu Engineering Basic Menu Engineering Process: Stars - items that are popular profitable Plowhorses - items that are not profitable but popular Puzzles - items that are profitable but no popular Dogs - items that are neither profitable nor popular

77 77 Defining Profitability Contribution Margin a high 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 expected popularity 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% ÷ 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

80 80 Improving The Menu Managing Plowhorses Items low in contribution margin, but high in popularity Increase prices carefully Test for demand Relocate the item to a lower profile on the menu Shift demand to more desirable items Combine with lower cost products Assess the direct labor factor Consider portion reduction

81 81 Improving The Menu Managing Puzzles Items high in contribution margin but low in popular Shift demand to these items Consider a price decrease Add value to the item

82 82 Improving The Menu Managing Stars Items high in contribution margin and high in popularity Maintain rigid specifications Place in a highly visible location on the menu Test for selling price inelasticity 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

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