The success of any restaurant, whether a chain or independent, large or small, traditional or mobile, is its menu. A cool name, eclectic décor, or an awesome location may be the hook for new customers to try a restaurant, but it’s the food that keeps them coming back. Changes you opt to make to your menu should be considered carefully. That said, every restaurant menu needs to be updated periodically — if for no other reason than to adjust for food cost and inflation. Yearly updates to a menu allow for price adjustments, the incorporation of popular food trends, and an opportunity to cull items that aren’t selling.
Update Your Menu for Food Cost Once a Year
To maintain profits, a restaurant menu should be updated at least once a year to make sure food costs are in line. Food costs refer to the price of menu items in comparison to the cost of the food used to prepare that same dish. The cost of raw ingredients determines how much a restaurant needs to charge for the finished product. Fast food menus can often get their food cost to as low as 25 percent, but fast, casual and family style concepts are usually higher. Generally, food costs should be around 30-35 percent. It means that if you pay $1.50 for an avocado, you need to charge a minimum of $5.50 to cover the cost and make a profit. This may seem like a steep increase, but keep in mind that the cost includes more than the food itself. You are paying your staff to prepare the food, serve the food, and clean up after the food. Everything in your restaurant, from payroll to the electric bill needs to be covered by the food you serve.
Food costs include sides as well as the main ingredient. For example, say one of your restaurant’s most popular dinner entrees is wild salmon. The filet of salmon costs $4. Each piece of salmon comes with a side of jasmine rice with a food cost of .50 cents and a seasonal vegetable that costs .75. Your total food cost for the entrée is $5.25. The minimum menu price is $18. It’s important to note that not every item has to be between 30 and 35 percent. Higher priced items like beef and fresh seafood often run higher than 35 percent. This increased food cost can be offset by incorporating menu dishes with lower costs, such as chicken and pork. And some foods will have really low food costs, including starches and seasonal vegetables. Your restaurant’s food cost should on average remain between 30-35 percent. So if you offer one expensive cut of beef filet, the cost can easily be balanced with two or three inexpensive entrée options like chicken marsala, pork tenderloin and even a cheaper cut of beef like a sirloin steak.
Food costs change depending on the season, and external factors like droughts, floods, which can drive prices up, just as bumper crops and excess supply can drop prices of food. For most restaurants, updating a menu seasonally is not going to work, unless your restaurant is a fine dining establishment with a rotating prix fixe menu. Customers wouldn’t be too happy if their favorite dishes change prices every few months.
Perfom a Yearly Audit
When you review your food cost and menu prices, it is also a good time to look at seasonal ingredients, current food trends, and portion size. Most POS systems allow for usage reports on individual menu items. It will tell you exactly how many menu items you sold over the past year. As you review your menu look for items that aren’t selling as well as others — do you need to keep them? Which items are doing well? Is there a way to add more variety? Do you need to add a few more selections to entice customers to come again? A common mistake of new restaurants is creating menus that are either way too big or way too small. Each year the National Restaurant Association publishes its annual Culinary Forecast, which outlines current and popular food trends for the coming year. It is a great resource for finding delicious menu inspiration.
Update Seasonal Items Twice a Year
Depending on where your restaurant is located, updating ingredients for cold and warm weather makes sense. When the temperatures rise, pull hearty stews, pot pies, and roasted meats; and opt for lighter items like fresh salads, cold soups, and grilled meats. It doesn’t mean you need to revamp every item on your menu, but customers will appreciate a few new selections each season.
Another way to keep food costs in line is to reduce food waste. Every time you have to throw out a case of wilted lettuce or batch of chowder that didn’t get used in time, the price of that food just went up. Even if the food cost is cheap, when you end up throwing it out, it is costing you money. Incorporating seasonal items in a few dishes will help ensure that the food gets used and doesn’t linger in the walk in. For example, if you offer a baked stuffed haddock as a dinner entrée, you should incorporate haddock into other entrees; perhaps as a haddock piccata or a classic fish and chips. Otherwise, you risk a case of fish spoiling and with it all your profits.
Every item on your menu should have a specific portion size to keep food cost in check. Restaurant portion control is also important for keeping menu items consistent with every shift. For example, say one of your restaurant’s most popular dishes is chicken marsala, served with risotto and fresh asparagus. To streamline your portion sizes, the entrée is broken down as follows: a six-ounce boneless chicken breast, a cup of risotto rice, five spears of asparagus and two tablespoons of parmesan cheese for garnish. The food cost for the dish is $5.25, and the menu price is $17.95. If one chef routinely serves a chicken breast that is seven or eight ounces or adds six spears of asparagus instead of four, it is going to raise the food cost — but the menu price doesn’t go up. Every time this entrée leaves the kitchen, no matter who is cooking, the serving sizes shouldn’t change.
Don’t Forget to Update Your Cocktail Menu
Along with updating your restaurant menu, reviewing your bar menu once a year is also a good idea. If you are carrying a large inventory of hard liquor, review what is selling and what isn’t. Even though alcohol has a very low food cost, there is no reason to keep a large inventory on hand if it isn’t selling. Just as with seasonal food, alcoholic beverage trends come and go. What may have been popular when your restaurant first opened might be a food fad now. Don’t be afraid to ask your bartender to expand his or her drink recipes to include popular trends like locally brewed beer, spirits, house-made liquors, and organic liquors. The rise of micro distilleries and on-site production is among one of the current popular restaurant trends.
At a minimum, you should update your restaurant menu at least once a year, to make sure prices are where they should be. Correct food cost is vital to the success of a restaurant. Along with a check on food cost, a yearly menu audit helps you see what is selling and what isn’t and is an opportunity to try some new items. No matter how often you opt to update your restaurant menu, always ask for feedback from your customers. It is their opinion that matters most.