In a perfect world, you’d create the most accurately priced dish and get the most bang for your buck when selling it at your restaurant, right?
Although this isn’t a perfect world, you certainly can accurately cost out your dish and make the most profit possible from it!
How so, you ask?
Food Cost Management.
Food cost management is the process of controlling the costs associated with running a restaurant, particularly with regards to food expenses.
Managing food costs is crucial for the success of any restaurant, as food is typically one of the largest expenses a restaurant incurs. Keeping these costs low will help you ensure your profits.
Key Components to Effective Restaurant Food Cost Management
There are several key components to effective restaurant food cost management, let’s take a look at them:
Menu Planning
One of the most important factors in controlling food costs is menu planning.
By designing a menu that balances high-profit items with lower-cost ingredients, restaurant owners can maintain healthy profit margins while still providing customers with delicious and satisfying meals.
Purchasing
Another critical aspect of food cost management is purchasing. Restaurant owners need to source high-quality ingredients at competitive prices, while also minimizing waste and spoilage.
By partnering with Dining Alliance, you can take advantage of thousands of dollars’ worth of savings from over 350 manufacturers!
Inventory Management
Managing inventory is another essential aspect to controlling food costs.
By keeping track of inventory levels and ordering only what is needed, restaurant owners can minimize waste and reduce the risk of spoilage.
Portion Control
You can’t manage your food costs without implementing some type of portion control.
By following standardized recipes and controlling portion sizes, restaurants can minimize waste and ensure that every ingredient is being used efficiently.
Pricing Strategy
Setting the right prices for menu items is also critical for effective food cost management.
Restaurant operators and chefs need to balance the cost of ingredients with the value customers place on each item. This way they maximize profits without pricing themselves out of the market.
Reduce Food Waste to Keep Food Costs Down
Food waste has become a big topic across the restaurant industry. It’s estimated that restaurants in the US generate around 22-33 billion pounds of food waste each year. To combat that, many operations look for ways to reduce food waste without taking a big hit to margins.
1) Fried Brussel Sprout Leaves
Nowadays, brussel sprouts are a hot item. Chances are you have them somewhere on your menu.
As you cut your brussel sprouts to prepare them for other dishes, there are leaves that fall off and are typically not desired for the original dish.
Take those extra leaves and fry them briefly, either in a deep fryer or in a pan of oil. Once done, toss them with salt, parmesan cheese, and a little lemon juice.
There you have it! A perfect appetizer or light bar snack. If desired, dress it up by adding a side of your signature aioli.
This is a great way to turn something that would be “trash” into a delicious addition to your menu.
2) Steak Tartare
You read that right – steak tartare.
If your operation does any type of butchering in-house, there is a great opportunity for you to utilize the meat trimmings into an entirely new dish.
Instead of using the meat trimmings for a stock or sauce, take the beef trimmings and remove as much fat as possible. Dice the beef finely and mix with a small amount of tartare seasoning.
We recommend: ¼ Dijon mustard, 2 tbs olive oil, ¼ cup finely cut chives, ¼ Tarragon finely chopped, ¼ Sherried Shallots (Brunoise shallots and soak at least 2 hours in sherry vinegar), and salt and pepper to taste.
Finding ways to reduce food waste while also creating a new, high-value menu item sounds like a win to us!
3) Fried Root Vegetable Peelings
Your menu likely features a few different root vegetables – carrots, parsnips, beets, etc.
As you peel the items for their original dishes, save the scraps! You can fry the peelings and use as a garnish to another dish.
Or, lightly season the fried peelings and serve with an aioli for the perfect craveable bar snack.
Utilizing food scraps like this might be one of the easiest ways to reduce food waste.
4) Bring Life to Your Wilted Herbs
If you see your herbs are starting to wilt, you may think it’s time to toss them out. Before you do, consider some alternative uses for them!
Wilted herbs are a great option for pesto. Or, use them to create a marinade for proteins.
We recommend simply pureeing the herbs with some olive oil, salt, and pepper. From there you can rub on proteins, use as a marinade, or use as a pesto oil to add while plating a dish.
Finding ways to reduce food waste could also be a great opportunity to amplify your existing dishes.
5) When Life Gives You Lemons… Use Them All
Citrus is a staple item in restaurants, so why not get multiple uses out of your lemons and limes?
Once you squeezed as much juice out of your citrus as possible, save the remaining rinds. Add them to the bottom of a steamer with celery heads and fennel fronds to cook fish. This will add a subtle flavor to the fish that can elevate the quality of the plate.
Using an item like this in multiple applications is one of many great ways to reduce food waste while also enhancing your menu.
6) Don’t Fear the Fennel
Fennel fronds are a delicious and often underused item in restaurant pantries.
Save your fennel fronds and use them as a garnish, either fresh or fried.
Or, you can add the fresh fronds to a mixed green salad for a pop of flavor complexity.
Thinking creatively about your food ‘scraps’ can often lead to new and innovative ideas for your menu.
What’s a Healthy Food Cost Percentage?
There’s no magic food cost percentage that works for every restaurant, but many operators aim for a food cost between 25% and 35% of food sales.
Your ideal percentage depends on your concept, menu, ingredient costs, pricing strategy, and other operating expenses. A steakhouse, for example, may naturally run a higher food cost than a pizza shop or café.
What matters most is knowing your target and tracking your actual food costs against it. If your percentage starts creeping up, it may be time to look at ingredient prices, portions, waste, purchasing habits, or menu pricing.
Staying on top of these numbers helps you catch problems early and make adjustments before they take a bigger bite out of your profits.
This all seems like a ton of work, especially when you’re busy managing everything else at your restaurant. So what if we told you it could all be accomplished in one centralized location with the help of technology?
Not only do you have access to savings and discounts in all areas of your operation as a Dining Alliance member, but you also have access to our new Back Office technology to help take care of all your food cost management needs.
From recipe costing to tracking your food spend, it can all be accomplished through the help of Back Office technology.
Frequently Asked Questions
What is food cost management?
Food cost management is the process of tracking and controlling food-related expenses to help your restaurant reduce waste, manage margins, and improve profitability.
What is a good food cost percentage for a restaurant?
Many restaurants aim for a food cost percentage between 25% and 35%, but the right target depends on your concept, menu, pricing, and operating costs.
How can I lower food costs without hurting quality?
Focus on smarter purchasing, portion control, reducing waste, optimizing your menu, and finding competitive pricing on the products you already use.
How does reducing food waste lower food costs?
Less waste means more of what you purchase actually generates revenue. Using ingredients efficiently can lower costs and help you get more value from every order.
What are the biggest causes of high food costs in restaurants?
Rising ingredient prices, overportioning, food waste, spoilage, poor inventory management, and incorrect menu pricing can all drive food costs higher.
How often should restaurants calculate food costs?
Restaurants should review food costs regularly, ideally at least weekly, so changes in pricing, waste, or purchasing can be identified and addressed quickly.
