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How to optimize food costs in an off-premise environment

Photograph courtesy of CrunchTime

The off-premise shift has changed the landscape of the restaurant industry. Today, guests expect their favorite brands to provide myriad of ways to order, receive and pay for their meals outside the four walls of the restaurant. It is, of course, an extension of the current culture of wanting just about everything on demand. There’s a higher demand for online ordering, delivery, and other means that make it easier to receive meals in a timely manner.   

What does off-premise mean for the back office?

Off-premise dining puts enormous pressure on a restaurant’s back-of-house operations. Competition has never been fiercer and profitability is of the utmost importance, which creates a difficult situation for operators. Restaurants can’t afford to deny guests the opportunity to order meals from the comfort of their homes. However, serving meals through pickup or delivery—particularly when third-party services are involved—limits the restaurant’s ability to earn more from on-premise add-ons such as bar drinks and appetizers.

So how do operators reach and maintain profitability when off-premise orders decrease check size? To answer this question, a number of smaller questions need to be addressed first. For instance: How can restaurants navigate the muddy waters of third-party delivery?  Do more steps between the kitchen and guest impact inventory management and food preparation processes? Are recipes optimized for off-premise consumption?

Answering those questions requires tools that uncover critical metrics regarding food costs and sales. For example, identifying variances between theoretical costs and actual food costs can help solve the aforementioned challenges and allow restaurants to eliminate any problems inherent in off-premise operations.

Optimizing food operations for off-premise

Third-party delivery services increase the number of steps required to get food from the kitchen to the customer, which in turn increases the risk of loss and waste. What if the third-party delivery driver takes too long to get those French fries to the guest and they are cold when they’re delivered—is the restaurant prepared to comp that sale? What about if the delivery never makes it to the guest at all? Are operators building those circumstances into their forecasts?

There are risks inherent in all delivery sales. But third-party delivery services—much like all off-premise sales channels—feel like must-haves in 2019, so shouldn’t restaurants have the means to forecast and eliminate as much waste as possible to maintain profitability?

When restaurant operators identify variances between theoretical and actual food costs and pinpoint the location, menu item, day, shift and off-premise sales channel aligned with the variance, they can take a giant step towards solving the problem. The findings may point the restaurant towards considering recipes optimized for off-premise consumption. The findings may also shed light on the need for revamped inventory management processes. Sometimes processes have to change because they were developed with traditional service in mind and the restaurant is not equipped to adequately handle new (i.e. off-premise) demands from guests.

The bottom line

Everyone in the restaurant industry knows the off-premise shift is not a passing fad. It’s the new normal for the restaurant industry and brands that don’t adapt will be left behind. While there are more risks that can inflate food cost variances, the right tools allow restaurants to capitalize on the off-premise trend while optimizing food costs for long-term, sustainable profitability.   

Want to know more? Visit us to learn how to optimize food and labor costs in an off-premise environment.

This post is sponsored by CrunchTime! Information Systems

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