The Recession has hit Main Street and one of the most interesting phenomena is the blurring of the lines between Dining Out and Dining In. It was not that long ago that local restaurants advertised "Home Cooking". Now it is quite common to read grocery ads lauding products that "Rival the Dining Out Experience". What a paradigm shift.
Where does this leave the local restaurant? I hope humbled because it is going to take a concerted effort to fight both the economic climate and the competition of the grocery stores which are offering more and more gourmet product. The good news is that the Dining Out experience is the more coveted experience, almost an American birth right at this point. In all the discussions of food costs and portion control in a down economy it is easy to forget what the Dining Out experience really has to offer - Hospitality.
The word has been so institutionalized that few people remember that the real goal of the Dining Out experience is . . . pleasure. Is anyone in your restaurant really tending to this aspect of the business? Are your guests warmly welcomed and provided a clean environment full of cheerful people? Is the service staff well groomed, attentive without being intrusive? Is the food fresh, attractive and presented with pride? I believe the down economy is an opportunity for serious soul searching and change.
One of the biggest areas of neglect has been training of service staff. If you accept that the biggest advantage to Dining Out is pleasure than the importance of your serving staff is paramount. Does your service staff go out of their way to tend to the wants and needs of the customers as if they are guests? Do they understand the menu and wine list if applicable? Do they spend their down time polishing the silverware and straightening the place settings to make the venue shine? How long has it been since you revamped uniforms and dress code?
First impressions are so so important. In this economic climate you can no longer presume that Guests entering your establishment have decided to Dine In. Browsing has become commonplace and customers are skittish about prices. An inviting entrance including clean windows and doors is crucial. Think old fashioned hospitality and make sure all guests are attended to upon arrival whether they have reservations or not. This means having comfortable seating and beverage service for your guests while they are waiting. Think about the ceremony of seating your guests - does it meet the criteria of a gracious welcome? Are your guests happy once served? Are the restrooms not just neat and clean but a pleasurable experience? If not then you have some adjustments to make or you will be losing customers to the new and improved Dining In experience.
--
Marilyn Chapman
Wedding Event Coordinator
Delectables Fine Catering, Inc.
"The Bay Area's Most Prestigious Caterer"
969 Virginia Avenue, Inc.
Palm Harbor, FL 34683
E-mail: info@delectablescatering.com
http://www.delectablescatering.com
Phone: 727-781-1200
Fax: 727-789-3401
Wednesday, July 15, 2009
Monday, July 13, 2009
Basic Recipe Costing - Part 3
I started my consulting company in 1990 to help food service operators with financial troubles. Finding it difficult to get paid, I started looking for work with companies in better shape. I ran into a local consultant, Bob Kaiser, who said I should work with computers since I had a background in accounting and technology.
My first assignment was with one of Bob's clients. This company had two catering facilities and used Eatec software. The chef had zero success building recipes despite purchasing the The Professional Chef
and the Food for Fifty (12th Edition)
modules.
These add on modules were a huge time killer. I found myself gutting sophisticated recipes for chicken, beef and vegetable stocks and replacing the classic recipes with a package of soup base and a gallon of water. After hours of wasted time, I completely destroyed the chef's preliminary efforts and built the recipes from scratch.
I used the Professional Chef book's approach and started with Mise en Place and Stocks. Then I progressed to Soups and Sauces before starting work on entrees. After a week, I had all the major protein work done. The vegetables, starches, breakfast items, baked goods and desserts went much quicker.
During the project, my wife and I began to refer to this gig as "The $4,000 Mistake" since it consumed over 200 hours and 3 round trips (300 miles each trip) to finish.
The Food For Fifty book has a fantastic first chapter which is a must read for anyone trying this exercise for the first time. They focus on quantity food service and use the perspective of a caterer or institutional food service operator. Recipes all yield 50 portions. I took many of the chef's clippings from Bon Appetit and Gourmet and converted them to the 50 portion yield.
Before you start a project on a recipe costing program, you need to be very well organized. Create an outline. Take the most complex recipe and imagine you are building the database. You will find you need to stop work and create other sub-recipes first since you can't purchase many of the stocks, sauces, mixes and blends called for in the recipe. Each of these components requires a recipe.
These individual components called for by the complex recipes are the building blocks of a successful recipe model.
My first assignment was with one of Bob's clients. This company had two catering facilities and used Eatec software. The chef had zero success building recipes despite purchasing the The Professional Chef
and the Food for Fifty (12th Edition) modules.
These add on modules were a huge time killer. I found myself gutting sophisticated recipes for chicken, beef and vegetable stocks and replacing the classic recipes with a package of soup base and a gallon of water. After hours of wasted time, I completely destroyed the chef's preliminary efforts and built the recipes from scratch.
I used the Professional Chef book's approach and started with Mise en Place and Stocks. Then I progressed to Soups and Sauces before starting work on entrees. After a week, I had all the major protein work done. The vegetables, starches, breakfast items, baked goods and desserts went much quicker.
During the project, my wife and I began to refer to this gig as "The $4,000 Mistake" since it consumed over 200 hours and 3 round trips (300 miles each trip) to finish.
The Food For Fifty book has a fantastic first chapter which is a must read for anyone trying this exercise for the first time. They focus on quantity food service and use the perspective of a caterer or institutional food service operator. Recipes all yield 50 portions. I took many of the chef's clippings from Bon Appetit and Gourmet and converted them to the 50 portion yield.
Before you start a project on a recipe costing program, you need to be very well organized. Create an outline. Take the most complex recipe and imagine you are building the database. You will find you need to stop work and create other sub-recipes first since you can't purchase many of the stocks, sauces, mixes and blends called for in the recipe. Each of these components requires a recipe.
These individual components called for by the complex recipes are the building blocks of a successful recipe model.
Thursday, July 9, 2009
NYT Article Focuses on Butchers
This week, the New York Times featured butchers in an article Young Idols With Cleavers Rule The Stage just when everyone thought butchering was a dying art. They interview young butchers from around the country working primarily in boutique butcher shops.
Basic Recipe Costing for Caterers - Step 2
After you have your item list broken down into purchase units (e.g. case) and inventory units (e.g. #10 can), you can begin to visualize the production process. For each ingredient, make a list of units commonly called in recipes. This will vary depending on how many different recipes use each item.
Three common portion methods for recipe ingredients are weight, volume and count. Meat items are often portioned by weight and count. When portioning by the piece, you may have more than one portion size. A strip steak could be sold in two or three portion sizes. For each portion size, imagine the entire strip will be used. You need to answer a simple question. How many steaks would you expect if you only cut the one size from the strip? Repeat the exercise for each portion size.
Use the average weight for popular random weight items. Generally, each case will always have the same number of large cuts (ribs, strips, loins, etc.). The total case weight will vary. Huge weight variances from the average will impact the number of portions per piece. It helps to keep accurate records of the butchering and fabrication process.
Yields may change from week to week. If you expected a 80% yield for a particular cut and you actually hit a 70% figure, your costs would run higher by over 11%. The variance is due to the poor yield alone. Add a price variance and some spoilage and the gross margin will begin to disappear. Portion control steaks provide operators with a consistent yield - one portion. When deciding to purchase portion control meat, you need to consider the hidden costs. Look at the whole picture including labor, equipment, risk of injury, and poor yield in your comparison.
Items portioned by volume or weight are straight forward. It is helpful to know the common conversion units for each method. Volume is expressed in gallons, quarts, pints, cups, liters, fluid ounces, milliliters, shots, tablespoons, teaspoons and fractions of each. Weight may be expressed in pounds, ounces, kilograms, grams, etc. A #10 can has about 6 pints (96 fluid ounces) and often about 6 pounds. Check all weight to volume relationships.
When developing standards, you may find your specifications are different than some of the excellent books. If you trim your produce quickly, the yield will probably be lower than the expectation. One way to reduce the variance is to portion produce items by the piece. A 24 head case of iceberg lettuce will yield 144 wedges if sliced in six pieces per head. Cutting the heads into larger wedges of four per head would yield only 96 portions.
Think of this step as the recipe model equivalent of the prep process. Having accurate recipe costs depends on accurate unit and yield data. The recipe costing programs will re-cost your recipes over and over as prices change. Spend the time initially to get this critical information correct for your operation. Don't worry about benchmarks for portion size. Use your unique portion sizes in determining the conversions between inventory count units and the units called for in recipes.
Three common portion methods for recipe ingredients are weight, volume and count. Meat items are often portioned by weight and count. When portioning by the piece, you may have more than one portion size. A strip steak could be sold in two or three portion sizes. For each portion size, imagine the entire strip will be used. You need to answer a simple question. How many steaks would you expect if you only cut the one size from the strip? Repeat the exercise for each portion size.
Use the average weight for popular random weight items. Generally, each case will always have the same number of large cuts (ribs, strips, loins, etc.). The total case weight will vary. Huge weight variances from the average will impact the number of portions per piece. It helps to keep accurate records of the butchering and fabrication process.
Yields may change from week to week. If you expected a 80% yield for a particular cut and you actually hit a 70% figure, your costs would run higher by over 11%. The variance is due to the poor yield alone. Add a price variance and some spoilage and the gross margin will begin to disappear. Portion control steaks provide operators with a consistent yield - one portion. When deciding to purchase portion control meat, you need to consider the hidden costs. Look at the whole picture including labor, equipment, risk of injury, and poor yield in your comparison.
Items portioned by volume or weight are straight forward. It is helpful to know the common conversion units for each method. Volume is expressed in gallons, quarts, pints, cups, liters, fluid ounces, milliliters, shots, tablespoons, teaspoons and fractions of each. Weight may be expressed in pounds, ounces, kilograms, grams, etc. A #10 can has about 6 pints (96 fluid ounces) and often about 6 pounds. Check all weight to volume relationships.
When developing standards, you may find your specifications are different than some of the excellent books. If you trim your produce quickly, the yield will probably be lower than the expectation. One way to reduce the variance is to portion produce items by the piece. A 24 head case of iceberg lettuce will yield 144 wedges if sliced in six pieces per head. Cutting the heads into larger wedges of four per head would yield only 96 portions.
Think of this step as the recipe model equivalent of the prep process. Having accurate recipe costs depends on accurate unit and yield data. The recipe costing programs will re-cost your recipes over and over as prices change. Spend the time initially to get this critical information correct for your operation. Don't worry about benchmarks for portion size. Use your unique portion sizes in determining the conversions between inventory count units and the units called for in recipes.
Saturday, July 4, 2009
Basic Recipe Costing for Caterers
[This summer, I'd like to engage readers in a unique approach to recipe costing which does require laying some groundwork. Two posts from the Food Cost Control Blog will be posted here to cover the essentials. Once readers have a chance to discuss and comment, this blog will shift to banquet style recipes.]
You may have lots of cookbooks, proprietary recipes, books with food yield statistics, market data, shopping lists, inventory count sheets, supplier quotes, product mix reports, quarterly tracking reports and other documents. A professional recipe model should be designed to integrate all of this useful information. The person working on this project needs to wear many hats: purchasing agent, steward, prep cook, line cook, and chef.
Rather than using a cookbook approach, start with your shopping lists. Use your shopping lists to create a spreadsheet with all your ingredients. Make columns for the name, category, primary supplier, purchase unit, storage area and storage unit.
Since the unit you purchase is used on orders, this is our starting point. It's helpful to know your alternate sources for each ingredient. You may want to categorize each item by the storage method. For example, frozen, refrigerated, dry bulk, canned goods, frozen goods, baked goods, etc. Feel free to add these columns. Its impossible to get too much information for your ingredient list.
[We'll eventually need to know the usage units for each ingredient and portion information. This will be discussed in Part2 (later this month).]
Once the list begins to come together, envision the flow for each item from loading dock to the table. Most items are purchased by the case and are stored as purchased. Some items are immediately transformed into other items through fabrication. Visualize the process of moving from the purchased unit of measure to the storage unit of measure first.
You may simply remove six #10 cans from a case and place the cans in a rack. The purchase unit is case and the storage unit is a #10 can. Focus on the storage unit and the divisor (6 in our example). Breaking down every item you purchase into logical storage units is one of the most important steps in creating a professional recipe costing model.
Each #10 can is valued at 1/6 of the case cost. Don't worry about the actual cost of each can. Focus on the number of storage units in each purchase unit.
Our work will eventually involve many calculations using units of measure, various blends, yield formulas, conversions, reciprocals and standard portion data. The simple exercise of developing a purchase unit to storage unit model is the ideal starting point. Once you complete this exercise, future conversion work will be more intuitive.
You may have lots of cookbooks, proprietary recipes, books with food yield statistics, market data, shopping lists, inventory count sheets, supplier quotes, product mix reports, quarterly tracking reports and other documents. A professional recipe model should be designed to integrate all of this useful information. The person working on this project needs to wear many hats: purchasing agent, steward, prep cook, line cook, and chef.
Rather than using a cookbook approach, start with your shopping lists. Use your shopping lists to create a spreadsheet with all your ingredients. Make columns for the name, category, primary supplier, purchase unit, storage area and storage unit.
Since the unit you purchase is used on orders, this is our starting point. It's helpful to know your alternate sources for each ingredient. You may want to categorize each item by the storage method. For example, frozen, refrigerated, dry bulk, canned goods, frozen goods, baked goods, etc. Feel free to add these columns. Its impossible to get too much information for your ingredient list.
[We'll eventually need to know the usage units for each ingredient and portion information. This will be discussed in Part2 (later this month).]
Once the list begins to come together, envision the flow for each item from loading dock to the table. Most items are purchased by the case and are stored as purchased. Some items are immediately transformed into other items through fabrication. Visualize the process of moving from the purchased unit of measure to the storage unit of measure first.
You may simply remove six #10 cans from a case and place the cans in a rack. The purchase unit is case and the storage unit is a #10 can. Focus on the storage unit and the divisor (6 in our example). Breaking down every item you purchase into logical storage units is one of the most important steps in creating a professional recipe costing model.
Each #10 can is valued at 1/6 of the case cost. Don't worry about the actual cost of each can. Focus on the number of storage units in each purchase unit.
Our work will eventually involve many calculations using units of measure, various blends, yield formulas, conversions, reciprocals and standard portion data. The simple exercise of developing a purchase unit to storage unit model is the ideal starting point. Once you complete this exercise, future conversion work will be more intuitive.
Tuesday, June 30, 2009
38 Year Old Catering Business For Sale
The Montgomery Advertiser reported on the closing of a catering business. Their article highlights the history of Personal Touch as they prepare to close on July 1st(tomorrow). The article ends with a phone number for potential buyers.
Catering Sales Triple
I found a press release in Chain Leader about a Northern California restaurant chain. The release focuses on a tripling of catering sales at the chain.
Sunday, June 14, 2009
Speculative Events
In recent days, I've received three invitations to special events. These invitations were delivered in my email box. In one instance, the event was called off one day before the scheduled time. The same promoter has a new invitation this week.
I suppose their strategy involves filling a space which would otherwise go empty. Generally, I would agree with this strategy. Rather than trying to fill the time slot with a random group, they may want to offer a special offer to a charitable foundation. They could let the foundation use the space for a fund raiser. The foundation would receive a special rate and the caterer would receive free publicity.
Now the empty space will be filled with new prospects and the press.
The caterer who called off the event actually suffered from the attempt to fill a void. They used the same email service to cancel the event. Hundreds of people who had no intention of attending the event know the outcome. I mentioned the series of emails to several of my friends since we enjoy the ethnic cuisine offered by this caterer.
Putting people into seats with no bait just does not work for most caterers. Most months have special occasions including New Years Eve, Valentine's Day, Mother's Day, Columbus Day, etc. Special event caterers often take advantage of these dates. Avoid speculative events and develop a second special event each month for a charity or foundation. These highly visible events will help you succeed as the economy improves.
I suppose their strategy involves filling a space which would otherwise go empty. Generally, I would agree with this strategy. Rather than trying to fill the time slot with a random group, they may want to offer a special offer to a charitable foundation. They could let the foundation use the space for a fund raiser. The foundation would receive a special rate and the caterer would receive free publicity.
Now the empty space will be filled with new prospects and the press.
The caterer who called off the event actually suffered from the attempt to fill a void. They used the same email service to cancel the event. Hundreds of people who had no intention of attending the event know the outcome. I mentioned the series of emails to several of my friends since we enjoy the ethnic cuisine offered by this caterer.
Putting people into seats with no bait just does not work for most caterers. Most months have special occasions including New Years Eve, Valentine's Day, Mother's Day, Columbus Day, etc. Special event caterers often take advantage of these dates. Avoid speculative events and develop a second special event each month for a charity or foundation. These highly visible events will help you succeed as the economy improves.
Monday, June 8, 2009
What Should Our Food Cost Be?
In a suburb of New Haven, CT, I was asked to help an event caterer organize accounting for receivables and payables. During our discussions, he decided to expand the scope of the project to include inventories and cost of goods sold.
Since I needed to gain a knowledge of his operation, I asked what his food cost percentage was the previous month. He said without hesitation: "Our food cost is phenomenal! We run a consistent 22%." I asked if he divided his revenue into components. He said he did not. Just to complete the basics, I asked for the recent beverage cost. I was told: "We shoot for a 10% beverage cost but it can vary depending on cash bars and open bars in any given month."
It was apparent they needed help analyzing alcoholic beverage service.
At this point, I felt it necessary to ask point blank how costs were computed. Event catering is very different from a la carte restaurant service. It is completely false to shoot for a restaurant style benchmark.
After two hours of sifting through financials, it was clear the operation was out of control on both food and beverage. The chef was reporting food cost as a percentage of the entire catering package. The pricing for a package typically covered food, beverage, entertainment, flowers, photographer (optional), limo service (optional) and prime location rental (optional).
Adding together the 22% and 10% to get a F&B total of 32% was my first attempt to get the staff focused on how 22% might possibly be a high number. I explained a restaurant would never divide food cost by the combined food and beverage sales. They then realized the 22% might not be as great as they had imagined. The reply was: "So we're good; not great."
They asked: "What should our food cost be?" I said about $5 per person for most events.
I mentioned my catering background. My remote site feeding background focused on cost per manday. One person in camp per day would be entitled to housekeeping services, food and beverages. We kept all financial data in categories and divided each category's cost by the number of mandays in the period.
We decided to rework the cost of goods sold data. The rework provided a method for tracking costs by event category. Once they had a clearer picture, the food cost swings were more apparent. Eventually, they had a system of control which allowed separate reporting for open bar events and cash bar events.
A second benefit emerged from the project. Precise pricing for clients was possible. Depending on menu mix and selection of entertainment and service options, a quote was provided with a minimum count and a price per attendee.
Their final menu included three layouts on a fixed price basis. Gold, Platinum and Diamond service food choices were offered at three price levels. Regardless of menu choice, clients could choose from the full list of auxiliary services with a per person charge for each.
Once the operation realized their food cost results were not phenomenal, they began to track costs and profits increased.
[Originally posted on the Food Cost Control Blog on March 22, 2006.]
Since I needed to gain a knowledge of his operation, I asked what his food cost percentage was the previous month. He said without hesitation: "Our food cost is phenomenal! We run a consistent 22%." I asked if he divided his revenue into components. He said he did not. Just to complete the basics, I asked for the recent beverage cost. I was told: "We shoot for a 10% beverage cost but it can vary depending on cash bars and open bars in any given month."
It was apparent they needed help analyzing alcoholic beverage service.
At this point, I felt it necessary to ask point blank how costs were computed. Event catering is very different from a la carte restaurant service. It is completely false to shoot for a restaurant style benchmark.
After two hours of sifting through financials, it was clear the operation was out of control on both food and beverage. The chef was reporting food cost as a percentage of the entire catering package. The pricing for a package typically covered food, beverage, entertainment, flowers, photographer (optional), limo service (optional) and prime location rental (optional).
Adding together the 22% and 10% to get a F&B total of 32% was my first attempt to get the staff focused on how 22% might possibly be a high number. I explained a restaurant would never divide food cost by the combined food and beverage sales. They then realized the 22% might not be as great as they had imagined. The reply was: "So we're good; not great."
They asked: "What should our food cost be?" I said about $5 per person for most events.
I mentioned my catering background. My remote site feeding background focused on cost per manday. One person in camp per day would be entitled to housekeeping services, food and beverages. We kept all financial data in categories and divided each category's cost by the number of mandays in the period.
We decided to rework the cost of goods sold data. The rework provided a method for tracking costs by event category. Once they had a clearer picture, the food cost swings were more apparent. Eventually, they had a system of control which allowed separate reporting for open bar events and cash bar events.
A second benefit emerged from the project. Precise pricing for clients was possible. Depending on menu mix and selection of entertainment and service options, a quote was provided with a minimum count and a price per attendee.
Their final menu included three layouts on a fixed price basis. Gold, Platinum and Diamond service food choices were offered at three price levels. Regardless of menu choice, clients could choose from the full list of auxiliary services with a per person charge for each.
Once the operation realized their food cost results were not phenomenal, they began to track costs and profits increased.
[Originally posted on the Food Cost Control Blog on March 22, 2006.]
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