Menu Engineering
By Joe Ritorto | MenuCorp

How do we increase profits (or maintain them) when we’ve shaved all the expenses off that we could find, but still wages go up, food costs go up, and so do rents and other fixed and variable costs. Do we increase the price of dishes on the menu? Will our competition or our customers allow us to so? Menu Engineering may be the only option.

Let’s dispel the myth straight away. To some, this may seem only the responsibility of chefs, for it is they who “balance the menu” with the “right” number or selection of starters, mains, desserts etc. Selecting which of these items to go on the menu is of course crucial, but the way in which we select them is what is important here.

The term Menu Engineering may conjure up different things to different people and may be seen as doing anything to a menu that makes it more profitable. Put simply, it determines what menu items are profitable and which ones are not. With this data you then proceed and make certain decisions regarding what goes on the menu, where it goes, and in the final analysis, how to get your patrons to buy more of the profitable dishes and less of the unprofitable ones.

Often we begin the process of working on a new menu and conclude to ourselves that “this dish sells”. If not convinced we begin the task of crystallizing these vague assumptions in factual analysis by asking the floor staff penetrating questions like, “How well do you think does this dish sells?” or “How popular is it?” Not satisfied with one answer we ask the same question to the kitchen staff and get different answer about the exact same dish.

Sometimes we find out that what appeared to be a hot seller, where there is a run on that item one day, may only add up to a moderate performer at the end of the week. Or, sometimes contrary to popular belief, a slow relatively understated dish performs relatively well week after week. The best and simplest way of collecting data is from PLU systems in registers and POS systems available today. These systems, if programmed and used properly, will provide you with this information effortlessly. At the end of the day we must remember that we are only human and tend to respond to factual factors as well as emotional ones.

One thing I noticed is that it’s just amazing how strong the law of average really is. At the end of the month most items on the menu (assuming nothing on the menu has been changed) will usually constitute the same percentage of sales as the month before, give or take some small variances in sales.

Menu engineering or restaurant menu analysis was originally credited to Michael L Kasanvana PhD and Donald J Smith, in 1982 at Michigan State University’s School of Hospitality Business. They looked at the relationship between gross profit margins of each item on a menu in relation to the rest of the items on the menu and how that contributed to overall sales. For further reading a book from this work is titled “Menu Engineering: A Practical Guide to Menu Analysis”.

To begin we must find out which items on the menu are profitable. This is done most accurately by tracking the actual cost of preparation (food costs) for each dish regularly. The best way of doing this is storing standardized recipes on computer and linking those recipes to the actual cost of ingredients at any point in time.

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