Fundamentals of Menu Planning

The Purpose of Menus Planning Tool Establishes… Communication Tool customer needs and expectations Prices Type of food Service style Worker’s skill Required equipment Competitors Communication Tool Informs customers about food choices Influences customer choices Creates an impression

Types of Menus

Fixed Menu Offer the same items everyday Many neighborhood restaurants use fixed menus Customers like it because they tend to have favorite dishes they order every time

A la carte Customers can choose exactly what they want as a main course, side dish, appetizer, salad, or dessert Offers freedom to mix and match Often seen at upscale restaurants and hotels Modified A la carte menus serve appetizers and desserts a la carte Typically at causal dining restaurants

California A single menu listing breakfast, lunch and dinner foods Offers the option to choose any item at any time of day Popular with foodservice establishments open 24 hours Also used in hotel room service

Du Jour Lists food only served that particular day Means “of the day” “Soup du jour” The next day a different du jour menu will be available Some restaurants have a du jour menu in addition to a la carte menu

Table d'hôte Offers a complete meal from appetizer to dessert and often includes beverage for a set price Banquets are typically served in this style Diners might choose in advance from four meals (beef, chicken, fish, or vegetarian) Reduces production cost Prix Fixe is the same except diners may be offered choices for one for more of the courses

Cyclical Written for a certain period of time and then repeats itself Might repeat every three weeks Could follow a seasonal cycle and change 4 x’s a year Weekly cycle menus are particularly suited for family, casual, or neighborhood restaurants

Menu Planning Principles

Type of Place and Customers Important to understand your customers and provide food that are appropriate for your type of place and your type of customer Factors to consider: Geography and culture Economics Population Density Age

Facility, Staff, and Equipment Limitations Consider the size of your dining room and kitchen Consider staff knowledge and cost of training Consider the equipment you have available

Balance and Variety Feature different cooking methods Use different tastes and textures Offer cold and hot appetizers, fish and chicken options Offer special dishes for special needs guests like vegetarians or customers with allergies Include recent food trends Offer various price levels

Truthfulness Truth in menu laws: designed to protect consumers from fraudulent claims related to food and menus

Truth in Menu Laws Quantity Quality Price Brand Names Amounts and weights must be accurate Quality “Prime” meat must actually be prime Price Brand Names Must be represented accurately Product Identification If it says it includes lobster, it must include lobster Point of Origin Merchandising Terms Terms used to encourage must be accurate Means of Preservation Methods of Preparation Verbal and Visual Presentation Pictures must be accurate Dietary and Nutritional Info

Organizing and Designing the Menu

Organization Menu categories are listed in the sequence they are eaten Items are also organized within each category Chicken entrees listed together

Design Materials, colors, and images communicate your message as strongly as the words Make sure the menu contains your restaurant’s vitals (name, address, and phone) Design the shape and size of the menu so it is in keeping with your restaurant’s concept Avoid too many photos inside the menu Emphasize the items on the menu not their prices Use print, not hard to read script

Writing a Menu Make sure language reflects concept Make food sound attractive Eliminate all unnecessary words Do not use restaurant jargon Make sure it is easy to read Be positive

Pricing Menu Items Pricing Methods

Pricing Terms Food Cost: per portion cost of all ingredients in the dish Operating Cost: cost of opening the doors Rent, Mortgage, Utilities Labor: employee salary Profit: the amount of money remaining after expenses are paid Margin: difference between profit and operating costs

Food Cost Percentage Method Set the percentage of menu price the food cost must be, then calculate the price that will provide this percentage. An accurate FCP will be different for each menu category. Item Food Cost ÷ Food Cost Percentage = Menu Price

Contribution Margin Method Works for a la carte menus and table d'hôte Uses operation-wide data to determine a dollar amount that must be added to each major menu item’s food cost. Total Operating Costs ÷ # of Customers = CM Contribution Margin + Food Cost = Menu Price

Straight Markup Pricing Managers mark up the costs according to a formula to obtain the selling price. The markup should be large enough to cover operating costs and profit. Each item is priced to help pay for operating costs. Labor + Overhead + Food Cost + Profit = Markup

Average Check Method Managers divide the total revenue by the number of seats, average seat turnover, and days open in one year. This results in an average check amount Gives an idea of the price range of items on the menu The price range can determine each item’s selling price.

Set Dollar Amount Markup Simply adds a fixed dollar amount to the food cost of an item Food Cost + Markup = Menu Price

Set Percentage Increase Method Builds on a set dollar amount market method – once set dollar amount is determined, managers determine what percentage it is in comparison. Food Cost × Percentage = Markup Markup ÷ Food Cost = Percentage

Give it a try… Menu pricing practice

Menu Classifications Stars (menu celebrities) Popular and Profitable Leave these items alone – place them in the prime space of the menu Less price sensitive

Menu Classifications Plow Horses Popular but less profitable Often reason for restaurant’s success (customers see it as a good value) Highly price sensitive

Menu Classifications Puzzles Unpopular but very profitable Help it out by decreasing the price or repositioning it on the menu or renaming it Even if it is not selling well, it is making a lot of money (relatively speaking). If sales can be increased without decreasing the price, it can easily become a STAR!

Menu Classifications Dogs Unpopular and unprofitable Eliminate from menu if possible Can be difficult if it is a influential guests favorite item In that case, leave it off the menu and only carry it in inventory – can be made to order by request and charge the guest more.