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National Restaurant Association - Food cost fitness: A case study

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Food cost fitness: A case study

When restaurant consultant Linda Lipsky came across a client with a whopping 50 percent food cost, the industry veteran set to work slashing expenses. The Broomall, Pennsylvania-based consultant helped the operation reduce its food costs to 34 percent, in line with industry standards. Here’s how:

  • Shopping around. By bidding out its items, the restaurant secured better deals, says Lipsky. Be sure to negotiate with current vendors also, she advises. “There’s not just one set price from vendors,” says Lipsky, noting that some suppliers reward loyal customers who pay on time. With wholesale prices jumping 25 percent over the past five years, according to the NRA 2015 Restaurant Industry Forecast, many operators are searching for better prices. Nearly nine out of 10 fine-dining operators shopped around for other suppliers in 2014, as did a majority of casual and family-dining operators.
  • Brand management. Lipsky’s restaurant client selectively switched to less expensive brands without sacrificing quality. “Having a branded ketchup on your tables is a quality statement,” says Lipsky. “But does anybody really care if you use a no-name white vinegar in the back of the house?” Likewise, consider less expensive liquor brands for recipes. “In most cases, the alcohol cooks off anyway. Do you really need a name brand?”
  • Proper portion sizes. The operation adjusted its portion sizes, cutting costs while better accommodating guest preferences. “The restaurant had been serving up way too much food—about a pound on a plate,” says Lipsky. “Many people are watching their weight today and are looking for smaller servings.” Simple steps like cutting a fillet from 8 to 7 ounces help control costs, while still leaving guests satisfied, says Lipsky.
  • Product specifications. By specifying a slightly smaller shrimp, the restaurant reduced the cost of making its shrimp salad while maintaining an attractive salad with the same number of shrimp per serving.
  • Meal composition. Lipsky reduced costs by adjusting the balance between main dishes and more affordable side dishes. “Beef up your meals with vegetables and grains,” she advises.
  • Fitted dishware. Large plates led to excessively large servings of pasta, and large bowls prompted staff to serve twice as much of a heavy cream soup as needed. Select dishware that’s appropriate for serving sizes.
  • Appropriate serving utensils. Make sure you’re using the proper serving pieces to ensure that you’re not dishing out more than what your recipes specify. For example, Lipsky’s client slashed its cost for vinaigrette dressing in half by switching from a two-ounce ladle to a more appropriate one-ounce ladle.
  • Freebies. Giveaways like bread and butter can cut into profits. Lipsky advised her client to switch to smaller butter chips that reduced waste.

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