CHAPTER SEVEN: THE MENU Factors to Consider Common Menu Types Methods for Pricing Determining a Menu’s Design and Layout

2 FOOD QUALITY What many restaurant patrons consider as the most important factor when selecting a restaurant Ranks above service, value, and even cleanliness

3 CONSIDERATIONS IN MENU PLANNING Needs and desires of guests Capability of cooks Equipment capacity and layout Consistency and availability of ingredients Price and pricing strategies Nutritional value Contribution theory Accuracy in menu Actual menu Items Menu design and layout Standard recipes Food cost percentage

4 CAPABILITY/CONSISTENCY Standardized recipes List quantities of ingredients and step-by-step methods to produce a quality product Menu complexity Number of meals served Number of people to supervise

5 EQUIPMENT Purchase the right equipment to achieve maximum production efficiency Many establishments plan the equipment according to the menu Efficient layout Systematic flow of items from receiving clerk to guests assures operational efficiency Avoid over use Too many menu items requiring one piece of equipment may slow service

6 AVAILABILITY Constant, reliable source of supply Reasonable price High-quality ingredients Take advantage of seasons Use seasonal or daily menus

7 PRICE Factors in building price-value: Amount of product Quality of product Reliability or consistency of product Uniqueness of product Product options or choices Service convenience Comfort level Reliability or consistency of service Tie-in offers or freebies

8 VALUE CREATION 2 components What you provide What you charge for it To build value, you need to: Increase the perception of value of what you provide Lower the price your charge for it Do both of the above

9 PRICING STRATEGIES 2 main ways to price a menu: Comparative approach Analyzes competitions’ prices and determines selection of appetizers, entrees, and desserts Individual items then selected and priced Cost of ingredients must equal predetermined food cost percentage Ratio method Price individual item and multiply it by the ratio amount necessary to achieve the desired food cost percentage May lead to weighted average approach food cost percentage, contribution margin, and sales volume are weighted

10 FOOD COST PERCENTAGE Varies with sales Target is about 33% of sales Calculating food cost percentage: Opening inventory + purchases – closing inventory = Cost of food consumed Food cost/Sales of food = Food cost percentage EXAMPLE: Opening inventory $10,000sales=$200,000 +Purchases $66,6666Food Cost Percentage= =Total food consumed $76,660 $66,666/$200,000= 33% -Closing inventory $10,000 =Cost of food consumed $66,6666

11 NUTRITIONAL VALUE Greater public awareness of healthy food and individual wellness Demand for healthier items like chicken and fish increasing Changes in type of cooking oil Boiling, poaching, steaming, roasting, etc. as opposed to frying Lower-fat menu items More meatless and vegetarian options

12 CONTRIBUTION MARGIN Difference between the sales and the cost of the item Amount goes towards covering fixed and variable costs EXAMPLE: steak selling price $ steak cost $5.00 =contribution margin $5.95

13 MENU ITEMS Independent restaurants are more creative than chain restaurants Menu items selected depend on type of restaurant Appetizers and soups 6-8 adequate for most establishments Salads Preferred starter in many restaurants Entrees At least 8 in a table-service restaurant Desserts Can be purchased, made, or finished off in-house Matching/pairing Couple a type of wine with a general class of food

14 MENU TYPES Dinner-house Separate similar entrees A la carte Individually priced items, most often used menu Table d’hote Selection of several dishes from which patrons make a complete meal at a fixed price Cyclical Repeat every few days, used in institutions California Can order any menu item at any time of day Tourist Used to attract tourists to a particular restaurant Degustation A sample of the chef’s best dishes

15 MENU ANALYSIS Should be a balance between a menu too high in food cost and too low in food cost Menu engineering Best menu items are those with highest contribution margin per unit and highest sales It is recommended to analyze by: Individual menu items Categories of menu offering Meal periods or business categories

16 PRICING GUIDELINES Use odd increments for cents Do not right price increases over old prices Resist increases that raise the dollar amount of an item Give items that have been drastically increased in price a less noticeable menu spot Try to reduce large portions before raising prices Never increase price of whole menu Put “market price” on items that fluctuate Do not list menu items according to cost

17 DESIGN AND LAYOUT Range form one to several pages Variety of shapes Generally 9x12in or 11x17in Printing and artwork should harmonize with theme of the restaurant Easy to read and understand Strong focal point

18 FOCAL POINTS Focal point of a single- page menu Focal point of two- or four-page menu

19 The End