How can a food cost calculator improve your F&B cost control?

Food cost calculator is one of the tool as an indicator to achieve a better COGS. But the main aspect to achieve a sustainable healthy COGS are; 1. Are the team trained well enough on the standardisation of the receipts? 2. Is the team well aware of the yield output from each ingredient? 3. Are the equipment in right shape? Storage temp, efficency of machines.....

Food Cost calculators don't need to be a fancy software if you are starting out. The truth is I have come across MANY restaurants that don't even calculate or know their food costs. A Google Sheet or Excel can do just fine. Key items to list is to know your Raw Material cost, Overhead expenses so you can then calculate your menu pricing and then find your profit. These will help you know what your sales projections should look like, what your profit margin is (it should be no lower than 30%) and what your overhead is. This later is data that you can plug into sheet to get your menu engineering and sales analysis to see what is the best selling product. It provides you data to make data informed decisions.

A stand-alone restaurant may opt for an inexpensive spreadsheet that includes these basic features: 1. Ingredient cost tracking: a periodically updated list of all products purchased, unit of measure, price, and supplier. 2. Sub-recipes engineering: (e.g. batch sauces) a calculation of how much of each ingredient, at what cost and how much wastage (or yield) it takes to produce a certain standard quantity of said batch recipe. 3. Menu items engineering: similar process as the sub-recipe engineering where the latter is included in the final product (the portioned completed dish). 4. Menu cost analysis: a cost calculation obtained by adding menu items together to reach a cost target % by matching it with a preferred price.

Food and Beverage Category Industry Benchmark Food Cost % Overall 20 – 40% Food 25 – 40% Non-alcoholic beverage 10 – 30% Wine 30 – 50% Draft beer 20 – 40% Bottled/canned beer 30 – 35% Liquor 10 – 20% Mixed drinks 5 – 25% understand the profitability of your menu Items through food costs After you determine where the cost of your own food falls along with ideal benchmarks, you will be able to understand the profitability of your dishes

Best ways is once you know your food cost and your margins. - Focus on training staff (kitchen staff for portioning, food handling & order accuracy), (FOH staff in terms of ordering, extras and additionals and changes) - Food rotation (inventory) - Portioning - Talk with providers about deals, promos as well as giving them Data & Spec sheets to abide by for product and delivery standards. - Have seasonal menus - Consistently create checks and monitor waste and sales. There needs to be consistent and efficient communication between the suppliers, person doing ordering and stocking, kitchen staff , foh and accounting in order to detect stop or manage any issue or in-congruency. This way you work as a team to improve, educate & involve staff

One of the most practical ways is to run an Actual vs Theoretical analysis. Actual cost is calculated by: - Opening count + purchase + transfers (in or out) - closing count Theoretical cost (without POS linkage): - Number of menus sold x menu cost The variance between these two numbers to make 5 quick diagnostics: 1. Over/under pouring. 2. Products quality/yield fluctuation (products supplied) 3. Menu items engineering inaccuracies. 4. Ingredients price updates. 5. Fraud.

Menu Engineering: Use food cost data to engage in menu engineering, a process that involves strategically placing high-profit items on the menu. By understanding the relationship between cost and profit, you can design menus that drive revenue and enhance overall profitability.

You can’t control what you can’t measure. So a proper tool to measure food cost is important. If we are not aware of the potential wastages, we will make ill-informed choices. Data driven decisions are always better.

If we analyse specifically standalone food and beverage units who doesn’t have trained manpower are struggling to maintain day to control, because they themselves don’t discuss and disclose most of the information which leads to long term losses which they realise when they lose almost 60-70% potential profit. I think any individual entering in food and beverage business need to take basic education or use professionals to set up procedures long and short term goals etc