1. TACTICS TO COMBAT
RISING FOOD & OPERATIONS COSTS
WARREN DIETEL,
CEO, PUFF ‟N STUFF CATERING, ORLANDO & TAMPA, FL

2. It is a fact of life that food and operations costs continue to rise. The
financial squeeze between the retail price and the cost of food and
operations often results in a reduction of bottom line profits. In today‟s
session we share a number of our best practices for combating these
rising costs while protecting and increasing margin.
Develop standardized systems to reduce costly waste
Use menu engineering when designing cost-effective menus
Determine true production and overhead costs
Different factors to consider when strategically raising prices
Effective purchasing practices
TACTICS TO COMBAT RISING FOOD AND
OPERATIONS COSTS
Presentation available at:
http://www.slideshare.net/WarrenDietel

3. DEVELOP STANDARDIZED SYSTEMS
TO REDUCE COSTLY WASTE

4. • Involve all department managers
• Meet weekly
• Focus on top 3-5 goals per department
• Take ownership & report minutes
• Director of Purchasing
• Identifies cost effective items
• Looks forward to both short & long term needs
• Educates sales – promotions, new recipes, A-B-C list
• Quality Control Team
BUILD A SYSTEMS-FOCUSED TEAM

5. • Form an executive team focused on quality
• Develop Food and Service Standards – every member looking
out for quality, hospitality and service.
• Involve the team in full strategic plan - Great for culture.
• Helps waste with hours, safety, efficiency of decision making,
four eyes on each event
• Entire company knows who the QC Team is.
• Independent person reviews food before departure
QUALITY CONTROL TEAM

6. Velocity Reports
• MPM velocity report by menu item
• Friday report by month, YTD, by concept
• Pricing & purchasing strategy direction
PEAR Report “Post Event Analysis Report”
• Caption completes 8-9 pages
• Average portion/person
• What was returned? (Interview Dishwashers, look at garbage)
• Cost out party after the fact to measure GOP
REPORTING: WORK SMARTER, NOT
HARDER

7. Blend food & labor costs
• Labor is a significant portion of menu cost
• Example: Lobster is a high food cost, low labor cost
Utilize technology to:
• Scale recipes & prep
• Determine required items
Leverage small efficiencies
• How many chefs chop parsley each day?
• Consider offering screw top wine
EFFICIENT TEAMS

8. Search for cost-effective ingredients
• Start with the most costly: Proteins, Produce, Fruit
• Tenderloin: switching from 8 oz. to 7 oz. saves
$1,000/ month
• Look at Cost Cycle and use velocity reports
EFFICIENT MENU ITEMS

9. It‟s not just for meat anymore
Cryovac
Everything!

10. Create hors d‟oeuvres
based on your typical
wasteLeftover and end products of
Cheese, Beef, Fish

11. Grow what you use!
Great marketing and sales tool to
demonstrate fresh product.
Grow a Garden

12. MENU ENGINEERING

13. • Designing Menus for in-season foods
• When food is in-season, what can you make, can or cryovac?
• When designing a Seasonal Menu, Seated Dinner or Suite Experience –
design for use of same product throughout the menu to reduce the amount of
items to purchase and prep labor.
• Considering labor intensive vs. labor efficient menu items
WHAT IS MENU ENGINEERING?

14. The Basics:
• Avoid too much variety and menu waste
• Train to prepare low volume purchases
• Tenderloin – Sirloin – Rib eye
• Cut to first Tenderloin, even if it‟s a smaller portion
• Custom proposals
Bonus:
• Put more expensive Items at end of buffet on the left
• Less people tend to eat these items
STREAMLINE YOUR MENUS

15. • Culinary alerts sales on items that need to be sold
• Weekly menu meetings to discussed featured items
• Strategically develop last minute events menus
based on featured items
COMMUNICATION IS KEY!

16. • Understand your
clientele
• Rural people
• Women drink
coffee, men
indulge in protein
• Portion vs. production
waste
PRACTICE PORTION
CONTROL

17. Chef/Management is allowed to
reduce quantities based on
knowledge of events or guest
counts.
Guests Go Right – for station
events, put more expensive
items to the left and reduce
quantities.
Quantities:
Tricks of the
Trade

18. EFFECTIVE QUANTIFICATION

19. • Start with a common item/sauce/ concept for variations
• High-end menu items can be tailored for the appropriate course and
portion size
• Lobster Mac „n Cheese = 7 service options
• Hors d‟oeuvre (2), buffet, plated, family style & action stations (2)
• Find a winning balance between budget and brilliance!
VALUE ENGINEERING

20. Lobster Mac „n Cheese is a rich
interpretation of a classic comfort food.
This dish debuted on our menu an a
luxurious hors d‟oeuvre Chef Bar
combining fresh Maine lobster meat,
savory pasta, Prosciutto de Parma, petit
pois, and rich cream in a decadent
eighty pound Grana Padana cheese
wheel.
The finished dish is garnished with a
basil leaf and presented to delighted
guests on a crisp Cheddar and Edam
cheese tuile.
LOBSTER MAC „N
CHEESE

21. Options 1 & 2: Hors d‟Oeuvre
• Smallest portion sizes
• Tray passed
• Perfect for large groups

22. • Medium portion size
• Cost effective service style
• Presented in chaffing dish
OPTION 3: BUFFET

23. • Plated meal
• Medium portion size
• Elegant service style
• Introduce refined ingredients to more
simple meals
OPTION 4: FIRST
COURSE

24. Options 5: Family Style
• Presented on a shared platter
• Most generous portion
• Relaxed service style fosters
conversation

25. Options 6 & 7: Action Stations
• Prepared to order vs. pre-prepped
• Most exciting and original presentation
• Most expensive execution
• Cost can be controlled by adjusting chef‟s service
style

26. 1. $ Hors d‟oeuvre – Butler-passed in an edible cup
2. $ Hors d‟oeuvre – Butler-passed as a mini plate
3. $$ Buffet – presented in chaffing dishes
4. $$ Plated – as a first course
5. $$$ Family Style – presented on a platter
6. $$$ Action Station – served from a chaffing dish or cooked to order
VARIED OPTIONS FOR VARIED
BUDGETS

27. DETERMINE TRUE PRODUCTION &
OVERHEAD COSTS

28. REMEMBER THE 80/20 RULE!
20% of Costs - impacted by smart purchasing
Remaining 80% - managed by operational controls
“What you do once products arrive at your backdoor”

29. • When creating menus, we calculate labor, OT and fudge factor into
the mix by historical numbers
• Four kitchens around the city and a Food Truck. Chefs speak to
each other weekly to see what food items we can reuse. Chefs do
cost transfer between profit centers.
• Certain kitchens are slower/busier at different times of the year. Use
those down times to trade staff, save overtime, make and freeze bulk
items that hold up.
• Stagger Staff in and out of parties. Tell staff that they must sign out
at X time and that they need to come to the Captain. Force
efficiency.
HOW TO MAKE YOUR KITCHEN LABOR
WORK FOR YOU

30. Pricing
• Set a base sell price for each menu item
• Use software to mark-up based on venue commission, other factors
• Put a per person “Cleanup and Disposables” charge into every menu
Venues
• Develop different menus for different venues
Labor
• Electronic & smart phone tech for time & attendance
• Stagger labor arriving and departing
• Capture accurate time for work produced
LET YOUR SOFTWARE DO THE HARD
WORK

32. STRATEGICALLY RAISING PRICES

33. • Know what prices went up and what didn‟t
• Know your place - a position of strength vs. weakness
• Raise prices all at once
• Go up on only 1/3 of each menu – by 3 years, all up.
• All prices across board rise 5%.
• Administrative Service charge rise 2%
• Create a cycle, review prices each November
• Menu type and by guest size volume
NOT IF, BUT WHEN YOU RAISE PRICES…

34. • Items with long shelf life
• Bought $35,000 in
disposables because we
knew price was going to
increase by 35%
• High volume usage
• Build menus using hi-yield
items (chile relleno)
PLAY THE MARKET

35. • We have an exclusive agreement with one major purveyor, but we
still constantly shop. Other purveyors still know we can buy from
them and bring us great deals.
• Go direct to manufacturers. Negotiate hard with purveyors.
Remember BATNA for negotiating and Wayne Gretzky.
• Alcohol – saved us a ton of money going with one distributor. Better
price on all products. Great incentives when we need to close and
event or save money. 30 cases of Breckinridge Vodka and Bourbon
for Skin & Bones.
• After negotiating to the bone with one purveyor we asked them to
buy half of our box at Sports Authority Field and they did. It came
from a different budget.
PURCHASING: DON‟T BUY ALL YOUR EGGS
FROM ONE BASKET

36. • Give away less!
• Use a
charity/donation
reponse form
• Donations

37. EFFECTIVE PURCHASING
PRACTICES

38. 1. Build and leverage
relationships
2. Negotiate
3. Manage ordering/payments
4. Manage in-house processes
EFFECTIVE PURCHASING
STRATEGIES

39. THE CARDINAL RULE
“Don’t chase the lowest price.”
Buying from multiple distributors dilutes your purchasing power.

40. THE CARDINAL RULE
• Leverage your volume with a select few
• Create win-win relationships with distributors by
clearly explaining your “definition of success”
• Listen to distributors‟ challenges and needs
• Remember – loyal and educated customers
receive better pricing

41. GROUP PURCHASING
ORGANIZATIONS
• Goal is simple: Contribute to the bottom line of the members while
increasing sales for participating suppliers
• Analyze your organization and specific purchasing history, needs,
and future requirements
• Develop unique purchasing strategies
• Leverage the combined purchasing power with Distributers and
Manufacturers
• Negotiate Master Distribution Agreement with Distributers and
Manufacturer Agreements

42. • Receiving product
• Invoice price
• Product handling
• Portioning/menu item costs
• Waste
• Theft (Industry average =
3%)
• Appropriate pricing
• Implementing systems and
controls
YOUR ROLE

43. FOOD FOR THOUGHT…
Develop your own network of fellow caterers
or restaurants of similar size and philosophy to share
the best practices and learn from each other

44. THANK YOU!
Warren Dietel | warren@puffnstuff.com | 407.629.7833
To download a copy of my slides, go to:
http://www.slideshare.net/WarrenDietel
www.facebook.com/puffnstuffcatering | Twitter: @pscatering