How to Reduce the Food Cost Of a Restaurant
If you own a restaurant, you know the importance of keeping expenses low while maintaining high food quality standards. One way restaurants lower their food cost is by purchasing everything in bulk and preparing as much as they can in-house.
In this blog post, we’ll look at the pros and cons of buying ingredients in bulk, plus some examples of foods and dishes that can be made to cut down on labor time. Lastly, we’ll explore food storage methods to prolong their shelf life.
According to a Natural Resources Defense Council study, 30 to 40% of all food produced in the United States is wasted, costing about $ 165 billion annually. One of the most significant contributors to the food waste problem in the restaurant industry is that garbage can damage your bottom line. By setting the goals for your restaurant and making small changes, such as taking inventory items, changing your food order, and using your food wisely, you can profoundly affect your profit line.
How to Control Food Cost
Reducing the cost of food and waste starts with tracking and monitoring food coming to your restaurant. Most restaurants order food in bulk shipping, but it can be challenging to process all that food before it spoils. To reduce corruption, here are some steps you can take:
Calculate Your Food Costs
Calculating your food costs in a restaurant can be time-consuming, but staying on a budget and calculating your expenses can help you save time, money, and food. When calculating the percentage of food costs, other things are your inventory, the cost of goods sold (COGS), and the percentage of food costs. These things can help you stay on budget & track your profit/loss statement.
How Can I Calculate my Food Cost Percentage?
The best way to calculate your actual cost is to get your COGS divided by your food sales, which is 100 times larger. This will give you the result as a percentage.
Food Expense Formula: (Cost of Sell Goods / Food Sales) x 100
The percentage of healthy food costs is between 25 and 35 percent. However, do not worry if your percentage is higher. If you spend a lot of money on food, you may not be spending much on work or employment – which ends up being eliminated.
Be Consistent When Calculating Inventory
When calculating your inventory, you should track this at the same time of day. For example, it’s best to count your list at the beginning or end of each day. This supports you keep your numbers consistent when calculating inventory and the percentage of your food expenses.
Regularly checking your inventory can show you how your food is being used or wasted. For instance, if you notice that you have salami that is no longer used and will be spoiled, change your food order to a reduced amount to reduce food waste. On the other hand, if you run out of mozzarella cheese before your dinner service starts, you need to increase your food order.
Work with Your Food Suppliers
Once you know how many restaurants you use at a given time, you can work with your suppliers to reduce your food costs. If possible, see which competing providers are willing to offer you. If you have a great relationship with your current provider, ask for a discount or match prices with their competitors.
Another good option would be to set up a system where you buy in bulk, but the order is shipped in multiple shipments rather than one at a time. Ordering food in bulk can save you money, but it can lead to food spoilage, putting aside any money you would have saved by buying in bulk. Your gradual post-delivery ensures you always serve fresh food, reduces the amount of food wasted, and saves money.
Join a Group Purchasing Organization
If you can’t agree with your supplier to buy bulk, consider joining a shopping group. Group buying companies combine many small restaurants to get the highest quality products while keeping costs low. The integrated capital of many restaurants alone is essential, which gives the organization a great advantage when negotiating with suppliers to ensure you get a good deal.
When buying food, there is also the option to cut the middle person and go directly to the source: local farms and farmers’ markets. Food shipments from all over the country are often processed before they are fully ripe and freeze-dried, negatively affecting the taste. Local shopping ensures that you discover new products that are timely and support your local economy.
Manage Your Food Orders
The more you are willing to work hard, the more you can save for food orders. Below are a few suggestions on how to save money while also making good food. Provide a limited menu. By narrowing down your menu, you can cut down on the number of ingredients you need in your kitchen. This not only supports reducing the cost of food and food waste, but it is also good if you adjust your pick-up menu.
Take extra time to do the preparation work yourself. For example, buying a chicken that has already been pulled with bones, skin, and splits will be more expensive than just buying a whole chicken.
Keep track of food rates and how they can affect your shopping list. For example, the drought in California will affect the avocado crop, so it may not be the peak time to introduce guacamole to your menu.
Use seasonal food to save money on the product. Seasonal foods depend on your location, so check out the local farmers market to see what’s new and get inspired by new recipes.
Be aware of your food and product details. In the U.S., food is evaluated and categorized according to its quality, freshness, and appearance. Many times the difference between high marks is only decorated.
Implement Restaurant Portion Control
Controlling portions of your diet is a great way to reduce waste. First, find out how much food is thrown away. This part is essential if your customers cannot finish the meal consistently. Then, use restaurant management tools such as share scales and spoons to serve your customers the right amount of food.
Use the First In, First Out Method (FIFO)
The first, first-served method is straightforward: the first ingredients in your pantries & refrigerators first. This forces you to use the old food first, ensures you always have new elements, and helps prevent food from expiring.
Utilize Your Daily Specials
Everyday specialty can be an effective tool for reducing waste in your kitchen. For example, if you notice food in your container for a while, come up with a recipe that adds or uses that ingredient and then add it to your special daily menu. You can also contact your in-house staff to encourage customers to try daily specials, allowing you to clear your stock while making a profit.
Keep Your Staff Informed
Your employees need to know the price of your food and how their actions can affect what you need. For example, food preparation may involve a lot of unnecessary waste. The cost of such destruction, while seemingly insignificant at the time, can be massive. So if your employees know how much food costs and how to use it properly, they will be cautious when preparing food and distributing dishes.