The Food Cost Number Isn't the Whole Story
Restaurant food cost is one of the numbers operators watch most closely. But the percentage on the monthly report is often only the beginning of the story.
When food cost starts moving in the wrong direction, the natural reaction is to look for the obvious problem.
Maybe prices went up. Maybe portions got too large. Maybe there is too much waste. Maybe purchasing needs to be tightened up.
Sometimes those things are exactly what is happening.
But restaurant food cost is affected by a much larger system.
Food cost is influenced by purchasing, receiving, storage, preparation, portioning, waste, menu mix, inventory accuracy, recipe costing, production habits, and the way information moves through the kitchen.
That means a food-cost problem is not always a food problem.
Small Percentages Can Represent Substantial Dollars
A percentage can make a problem look smaller than it really is.
A restaurant doing $2 million in annual sales, for example, generates approximately $20,000 in sales for every one percentage point.
So when an operation is running just a few points above its target, the difference can represent a significant amount of money over the course of a year.
Where is the money going?
That is often the more useful question.
Instead of simply asking whether food cost is too high, operators can begin looking at the processes that are producing the number.
Food Waste Isn't Just What Gets Thrown in the Trash
When restaurant operators hear "food waste," they often picture a garbage can full of discarded food.
That's certainly part of it.
But waste can happen long before food reaches the trash.
- Overproduction creates unnecessary exposure to spoilage and quality loss.
- Poor storage can shorten the useful life of ingredients.
- Inconsistent portioning can quietly increase food usage.
- Incorrect preparation can turn usable product into trim or waste.
- Purchasing without accurate information can create excess inventory.
- Menu items with poor sales can tie up product and create additional waste.
The important point is that waste is often a process problem before it becomes a garbage problem.
Inventory Can Hide the Real Problem
Inventory is another area where food-cost numbers can become misleading.
If inventory counts are inconsistent, inaccurate, or performed differently from one period to the next, the resulting food-cost percentage may not tell the whole story.
The same is true when purchasing, receiving, transfers, credits, or inventory adjustments are not being recorded consistently.
Before making major operational changes, it is worth asking whether the information being used to make those decisions is reliable.
The Kitchen Has a System — Whether You Designed It or Not
Every restaurant has systems.
There is a system for ordering. A system for receiving. A system for storing product. A system for prep. A system for portioning. A system for production. A system for inventory.
The question is whether those systems are intentional and consistent.
When expectations are unclear, people naturally create their own methods. Over time, those methods become habits.
That is when small inconsistencies can become expensive.
Look for the Opportunity Before Looking for Someone to Blame
Food-cost problems can easily become personal.
Someone gets blamed for over-portioning. Someone gets blamed for waste. Someone gets blamed for ordering too much.
But sustainable improvement usually comes from understanding the process before assigning blame.
What is actually happening?
Where does the process break down?
How often does it happen?
And what is the financial impact?
Start With the Numbers
The goal isn't to change everything at once.
Start by establishing what is actually happening in the operation.
- Review the current food-cost percentage.
- Compare actual performance with the restaurant's target.
- Look at purchasing and inventory trends.
- Examine waste and production practices.
- Review portioning and recipe consistency.
- Identify the areas where the greatest financial opportunity appears to exist.
Turn the Numbers Into a Starting Point
The Barnhill Restaurant Food Cost & Profitability System was built to help restaurant operators measure food-cost performance, identify opportunities, and bring greater control to the kitchen.
Explore the Restaurant Food Cost & Profitability SystemBarnhill Culinary Consulting
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