Running a Restaurant While Controlling Food Cost Numbers

Running a restaurant in 2021 is a challenge no one has ever faced before. Food cost has become a bigger issue than ever before and that’s saying a lot considering most independent restaurants are running a restaurant 7–9 points above their ideal food cost in the best of times. You want to blame your distributor because it seems like for every delivery, some commodity price item goes up, and they never seem to go down. But you have more control than you think. Watch this restaurant business tip or keep scrolling to learn why focusing on the simple things can have a huge impact on your operation. 

If you find yourself blaming your distributor, I want to make a case that might show you something different. What if it's actually you and not the distributor? What if it's what you do with your product on a daily basis that is what’s truly killing your food cost, robbing you of profits? Well, I'm going to tell you, it really is you more than that 5 cents per pound that went up on cheese, which oh, by the way, a lot of your distributors don't have control over because they’re commodity pricing. With commodity items, the market sets those prices. Sure, you can control the markup with a prime vendor agreement, so that’s definitely something to do and something I can cover in the future.

Instead, let me tell you about one of my members with two restaurants in Wisconsin. He was running a 35.81 percent food cost in one of his restaurants. Let's just focus on the one. He had a chef that was looking over both restaurants. And chef’s best solution was literally to beat up on his sales rep. You know, 'Why are my prices higher?" "Show me another product." "How can I do this better?" So on and so forth. Well, I said there's more to this.

So we implemented some simple systems. We implemented a Key Item Tracker to prevent theft, a simple system so easy you can put it up on a clipboard in the kitchen. Using it, you  can recognize the items being stolen and stop it from going forward. After all, when people steal product, your food cost goes up.

We also implemented a Waste Tracker, a second clipboard system. Using this system, if you find every Thursday you’ve got rotten tomatoes at the bottom of the case, it’s a good indication you need to cut back your par level. But if you weren’t tracking the waste, you wouldn’t notice a pattern. Or maybe you find out that John is burning pizzas and you’ve got to take him off the oven and put him somewhere else and retrain him before he hits the oven. The Waste Tracker helps you stop making these kinds of dumb mistakes day after day after day.

These two clipboard systems prevent theft and stop waste.

The next system I teach is called the Restaurant Checkbook Guardian. It allows you, as an owner, to give up ordering without giving up your checkbook. It puts your chef or kitchen manager on a budget. And if they go over budget, they can't just place the order. Instead, they have to ask you for permission and explain why they’re over budget.

Then this member implemented simple portion controls on the line, making sure that, a 2-ounce ladle was in the right spot and that we used cups and things like that to make sure the same portion went out on the plate every single time. These were nothing major, nothing difficult, but something you have to manage.

Using these simple systems, he dropped his food cost by 6.41 percent down to a 29.5 percent food cost in three months. And by the way, this is during the pandemic when it really, really matters.

Do you know why this is possible? How could he possibly reduce his food costs that much with just a few simple systems? A typical restaurant is seven to nine points over ideal food cost. By simply stopping theft, reducing waste and putting your kitchen manager or chef on a budget, paying attention to your product, it's very easy to lower your food cost two to three points overnight.

Before you get to the bigger systems like recipe costing cards and menu engineering, it's easy to use these smaller simple systems. While I want you to work on recipe costing cards, shelf-to-sheet inventory and ideal versus actual product usage, the big things that make incredible change to your business, they are a lot of work. So just focusing on simple things can have a huge impact on your operation. It allows you to be running a restaurant while controlling food cost numbers. Don't let your KM or chef ignore them. 

If you would like to learn how to own a restaurant that doesn't depend on you to be successful, watch this free video course that teaches you three key principles to running a successful restaurant.

Be sure to visit my YouTube channel for more helpful restaurant management video tips.