The rising costs of groceries are the last thing venues need after periods of quarantines and lockdowns bought on by the pandemic. Soaring prices have caused many operators to rethink menu options and search for ways to combat the rise.
Operators can employ several creative cost-cutting measures to ensure they can continue to deliver quality F&B options, save money, and keep guests hungry for more. And all without increasing menu item prices! Read on to find our five best tips.
What is a good F&B profit margin?
Before we give you tips on how to help get there, let's first look at the optimal F&B profit margin your venue should aim for.
The success of an eatery is more than just reliant on the quality of food or drinks it offers. Numerous factors can impact a restaurant's profit margin, such as the average cost per customer, the type of restaurant, and more.
Restaurant profit margins typically range from 0 to 15 percent, but the average falls between 3 to 5 percent. Therefore, it's crucial to maintain restaurant margins that are at least average or better year after year.
5 food & beverage cost controls to try
1. Use one venue management system that can do it all
Running a busy venue with the addition of F&B offerings is a lot of work. Sometimes, saving money in the kitchen doesn’t start there at all. Using out-of-date food ordering and venue management systems increases the chance for errors and, in effect, can waste time and leave money on the table.
Switching to all-in-one systems like ROLLER takes the pressure off in many business areas. The ROLLER product sews all the parts of your business together into one easy-to-use and intuitive platform. From the one system, you can take F&B orders in-store or online, add tips, manage the tables in your venue, check and manage stock and inventory across multiple franchise locations, reconcile and report, and more.
Everything is in one place, organized, and no money is lost. You know what they say — a dollar saved is a dollar earnt.
2. Use your guest data to track trends and ‘trim the fat’ from your menu
Ask yourself some of the following questions, and using guest data, use the answers to discover where you can make better profits from the money you spend on F&B and which items you’d be better off cutting from your menu.
- What is the most popular menu item?
- What is the least popular menu item?
- What's the profit on each of my menu items? (Tip: take into account the cost of the ingredients as well as staff time, cooking time, and wastage)
- Is there a common complaint about a particular menu item?
- What is the average F&B spend per guest per visit?
- Which ingredients most often go to waste?
- How can I best utilize the space in my stockroom and freezer?
By answering these questions, you can ‘trim the fat’ from your menu and spend more on the most popular items to ensure they don’t run out, guests can always enjoy them, and you can consistently profit from them.
In the same way, you’ll be able to either drop unpopular menu items or reinvent them to be more appealing to guests and reduce the amount of food waste.
One way to quantify this data is to survey your guests and ask them directly what they're loving and what could be improved. ROLLER's Guest Experience Score (GXS) automatically surveys your guests after each visit allowing you to unlock invaluable insights from guest feedback and analyze trends.
3. Change the composition of your recipe
Are current recipes too expensive to make? It might be time to hit up those old recipe books gathering dust on the shelves! Consult them, do a Google search, ask some great cooks you know, and see if you can find new and inventive ways to make the same recipe with fewer/ cheaper ingredients.
It's also important to be aware of the shelf life of your products. Does your current supplier have short expiration dates resulting in lots of discounts or waste? Consider reviewing your menu offering or implementing stricter stock control with this in mind.
It might be a bit of trial and error, but the savings could be sizeable. You can perhaps even market the new dish as a ‘new and improved version’ and maybe even charge a little extra for it!
Be wary, of course, to make only a few changes and keep the essence of the dish the same to keep the guests who liked it as it was.
4. Negotiate with your suppliers
As a business owner, you have expertise in managing your enterprise. Meanwhile, your suppliers specialize in finding the best deals and high-quality products, especially during certain seasons. By negotiating with them, you can save money while maintaining the quality of your menu.
Hold formal meetings at least three times a year with your supplier/s to keep a good working relationship with them, and this will also help you more comfortably speak to them about prices. Additionally, you should also have frequent informal conversations with them. After all, you are their customer, they have a vested interest in your business, and your success is their success.
5. Reuse the ugly
Reduce food waste by reusing the ugly.
Try some of the below ideas to save more food and money at your venue.
- Transform your stale bread into croutons, breadcrumbs, or bread pudding.
- Turn overripe fruits into jam or jelly.
- Instead of throwing away leftover meat, shred it up and add it to a soup or stew the next day.
- If you have green vegetables that aren't quite presentable, turn them into a dip with pesto.
- Don't waste vegetable scraps — use them to whip up homemade vegetable stock.
- Don't toss out orange or lemon peels — dehydrate and grind them up to add a fresh zest to any dish.
Think about your wastage and packaging costs and how you may cut down on these. A waste compacter could save you money on waste collection as F&B tends to be the biggest part of overall waste.
Save money, reduce waste, and delight guests
Running a venue is stressful enough without worrying about increasing grocery prices.
To ensure that your F&B options stay profitable without compromising on quality or increasing guest prices, consider trying some of the abovementioned tips. They will save you money, delight your guests and curb food waste too!
To learn more about how ROLLER can assist you in doing the above and more at your venue, contact us here.