Menu engineering sounds like the work of specialised scientists. In a way it is, given that gastronomy can be loosely described as ‘the science of good eating’.
If you’re a chef, or even a regular cook, that makes you the scientist. If you’re a pub, restaurant or cafe manager, then part of your remit is making sure the kitchen-lab creations listed on your food menus stay profitable.
Maintaining menu profitability is itself something of an alchemy that you’re about to learn about in this guide to food-menu engineering. Bon appetit.
We can answer the question ‘what is food menu engineering?’ by asking what it’s not.
Food-menu engineering is not, for example:
Food-menu engineering very much is:
Food menu-engineering fact:
‘Menu engineering’ as a concept is the result of 1970s research from Boston Consulting Group. The aim of the work was to help food and hospitality businesses categorise food products in a way that made profitability decisions easier to make.
What that should tell you is that it’s not something to be shrugged off. FME can really be make-or-break. Done wrong, it can bring margin-crushing costs that snowball quietly out of sight.
Growyze’s restaurant management and stock inventory app intelligently gathers stock and costs data in one place, so you can make faster, more effective food-menu engineering decisions. Start a 14-day free trial during your next busy service and see for yourself.
Chances are you already have your own process of how to design food menus. Here’s a recap of the process start-to-finish so that you can benchmark and make sure you’re not missing any essential steps.
If your menus are seasonal, it makes sense to do your food-menu engineering in sync with how you switch up what's on offer.
If you don’t tend to change your food menus too often, then your food-menu engineering process doesn’t need to be as frequent.
To accurately cost your food menus, you’ll need to know:
a) food-cost percentage
b) contribution margin
a) food-cost percentage: that shows you how much of your overall sales go on ingredients and food-prep supplies.
To calculate FCP, you’ll need to first know
Once you’ve got all those figures worked out, you can use this formula to calculate your food-cost percentage:
b) contribution margin: which is effectively your profit margin per menu item. In other words, the difference between the menu-item’s selling price, and its cost to make.
Once you’ve calculated food-cost percentage & menu contribution margin you can create categories for menu-item popularity and profitability.
Ok, so you’ve got your menu using the process in step 2. Now it’s time to create a popularity and profitability matrix that should include these categories:
Your profitability matrix should help you design a more profitable food menu by adjusting what you’re offering at what price.
You might find that a ‘dud’ menu item might turn into a ‘tricky’ menu item from one season to another.
What should you do with your duds menu items?
You could axe them from the menu completely, or just deprioritise them in the menu design.
You could even rework the price or ingredients based on customer feedback. If you do rejig a dud menu item and both its sales and contribution margin remain low, consider removing it from the menu altogether.
All that process and you’re only just ready to redesign your menu. As we said, food-menu profitability really is a science.
You’re not done with the data-gathering just yet! To design knockout food menus that bring in consistent profits, you’ll need to gather some qualitative data to add to your quantitative data.
To gather qualitative feedback to inform menu-redesign, ask your front-of-house teams which food menus have been selling well and gather customer feedback on what they’d like to see more of on the menu.
The only way to find out is to ask!
With a combination of hard business metrics and experience data from your team and customers, you’ll be able to redesign your food menu to maintain that sweet spot of food profitability consistently.
Start your 14-day free trial and let the Growyze stock and inventory app take the heat out of doing all those granular food-menu cost calculations.