Economists tend to bicker, but there was at least one source of agreement in their 2013 forecasts: food prices are going to increase 2 to 4 percent this year. With restaurant patrons still pinching pennies, raising menu prices may not be the best solution. So what are the alternatives?
1. Shop around. Prices of certain staples and commodities—such as dairy and produce—fluctuate frequently, so it pays to work closely with several vendors to get the best deal, recommends Jeremiah Higgins, operations partner with HJL Group Restaurant Advisors and a restaurant operator himself. “Shop five seafood vendors, five produce vendors, etc. to get the latest and most economical quotes,” he advises. Smaller operations with less leverage can benefit by partnering with a distributor who has chefs on staff to help with R&D.
2. Ask each vendor to build current order guides listing only the products you buy from them. These guides should include the direct contact numbers and emails for both the purveyor and driver, as well as the item number, description and cost. Input the information into a spreadsheet so you can compare vendor prices and make sure the correct item number is delivered, Higgins suggests, updating the prices once a month.
3. Keep inventory tight. Print out and hang order guides near the delivery area to prevent over-purchasing. “Take a half day each week to analyze what’s selling on the menu and what isn’t, then set pars,” says Higgins. For example, if you sell five salmon entrees on a slow Monday night and seven on Wednesday, you’ll need six on an average weekday.
4. Arrange for a consistent delivery time. Higgins suggests early morning—between 7 a.m. and 10 a.m.—before the restaurant opens and the kitchen gets rushed. A time-stressed receiver may be too busy to look at the order sheets or examine the product. And a well-trained, consistent person should be checking in deliveries.
5. Weigh deliveries. Purchase an industrial foodservice floor scale for the delivery dock or kitchen prep area to weigh in everything you buy by the pound. These are usually the most expensive products—meat, poultry, seafood, cheese and produce—and you don’t want to be shorted.
6. Analyze true menu costs quarterly. If costs go up and you can’t raise prices—but an item has great plate coverage—think about reducing portion size a little, says Brad Moore, Sr. VP of client services for SpenDifference. Some examples he shares:
- Menu a 5-ounce chicken breast instead of a 7-ounce breast and flatten it with a mallet to cover the plate.
- Go from a ½-pound burger to a 6-ounce one and pile on extra toppings.
- Add sides that offer more intrinsic value to fill out the plate.
7. Engineer the menu. Moore recommends highlighting lower food-cost items on the menu through specials, menu inserts and boxed-in sections. “Anything that’s a derivative of corn or is raised with corn—beef, chicken, dairy products—is going to be pricey,” Moore reports. “Specials focusing on pasta, for example, will be less expensive and can be differentiated with flavor.”
8. Swap out beef cuts. Beef has gone up more than any other protein—a 6 to 7 percent increase is projected for 2013, notes Moore. Work with your supplier to identify less expensive cuts or alternatives that can “fulfill the beef experience” at lower cost. Burgers can go from 85 percent trim to 75 percent, for instance, and flank steak can be replaced by a similar lean cut.
9. Lock in prices. “In a changing market, foodservice buyers should be hedged to a greater extent,” Moore contends. As prices go down on essentials for your concept—cheese in a pizza operation, for example—lock in those prices for as long as possible.
10. Join a purchasing co-op. Group buying organizations and purchasing co-ops are able to buy in huge volume—millions of pounds, in some cases—and therefore have more leverage to negotiate pricing in the marketplace. This can save a chain or multi-unit restaurant group substantial sums in food costs. In addition, many co-ops have economists on staff who understand the commodity markets, will share this information with operators and recommend hedges.
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