2. Rationale
Everything starts with the menu.
dictates how your operation will be
organized and managed,
the extent to which it must meet its goals,
and even how the building itself - certainly
the interior - should be designed and
constructed.
2
3. Objectives
To explain the importance of a menu
To explain the basic rules of menu planning
To identify factors to be considered when
planning a menu
To identify constraints in menu planning
To plan and write a menu
3
4. Must Satisfy Guest Expectations
Reflect your guests’ tastes
Reflect your guests’ food preferences
Ascertain your guests’ needs
4
5. Must attain Marketing Objectives
Locations
Times
Prices
Quality
Specific food items
5
6. Must help to achieve
Quality Objectives
Quality standards:
flavor, texture, color, shape, flair,
consistency, palatability, visual appeal,
aromatic apparel, temperature
Nutritional concerns:
low-fat, high-fiber diets, vegetarian
6
7. Must be Cost-Effective
Commercial
financial constraints
profit objectives
Institutional
minimizing costs
operational budget
7
8. Must be Accurate
Truth-in-menu laws exist in some localities,
cannot mislabel a product
“butter” must use butter not margarine
“fresh” must be fresh, not fresh frozen
“homemade” not purchased “ready-to-heat”
“USDA Choice” actually “USDA Good”
8
12. Ingredients
Standard recipe
Availability of the
ingredients required
during the life span of
the menu
Seasonal ingredients
Cost
Miscellaneous cost
(flight charges, storage)
12
13. Marketing Implications
Social needs
Physiological needs
Type of service
(fast food, leisure dining)
Festival
Nutrition
13
14. Quality Levels and Costs
Guests’ expectation
Employees’ skills and knowledge
Availability of equipment
Specific ingredients
Food costs and selling prices
14
16. The Menu Helps to Determine
Staff Needs
Variety and complexity increases, number of
personnel increases
Production staff
Service staff
Back-of-house staff
16
17. The Menu Dictates Production
and Service Equipment Needs
Tableside service
carving utensils, trolleys,
gueridon, salad bowls,
suzette pans, souffle dishes,
soup tureens, large wooden
salad bowl, rechaud, Voiture
(heated cart for serving
roasts) and ......
17
18. The Menu Dictates Dining Space
A take-out sandwich or pizza operation would require no
dining space and the amount of square feet required per
person would be minimal.
On the other hand, if a restaurant offers a huge salad buffet,
dessert selection or an after-dinner trolley, wide aisles would
be needed to allow guests ease of movement and moving of
equipment.
18
19. Purchase Specifications May
Be Dictated By The Menu
If the menu offers such items as USDA Choice
New York strip steaks, quarter-pound lean beef
burgers, grade AA eggs, freshly squeezed Florida
orange juice, or vine-ripened tomatoes,
back -of-house procedures will not only include
receiving, storing, issuing, and producing the menu
items
but also purchasing the specific products described.
19
20. How and When Items
Must Be Prepared
To stimulate guest interest, the menu planner may
offer a dish prepared in a variety of ways:
Cooking methods
Poached, broiled, batter-dipped, deep fried
The finished product must be prepared using the
method indicated on the menu
Small quantities cooking (a la carte)
Batch cooking
20
21. The Menu is a Factor in the Development
of Cost Control Procedures
As the menu requires more expensive food
items and more extensive labor or capital
(equipment) needs, the property’s overall
expenses and the procedures to control them
will reflect these increased cost.
21
22. The Menu and the Service Plan
Type and size of dinnerware
Types of flatware
Garnishes (placed by service or production staff)
Timing requirement for ordering
Additional dining service supplies to serve the item
Special serving produced
Special information (doneness of the steaks, over
easy or sunny side eggs, etc.)
22
23. Menu Design
First impression is always important, the entire
menu should complement the operation
- Theme
- Interior Decor
- Design (Merchandising)
- Creativity
- Material
- Color
- Space
23
24. Menu Design
- Type style and/or lettering
- Names of food items
- Description
- Popular items are at the top of a list
- Clip-ons, inserts (daily specials)
- Operation’s address
- Beverage service notice
- Separate menus for each meal period
- Separate menu for host/hostess and guests
24
25. Menu Styles
A table d'hôte (a complete meal for one price)
A la Carte (items are listed and priced separately)
Combination (combination of the table d'hôte and a
la carte pricing styles)
Fixed menus: a single menus for several months
Cycle menus: designed to provide variety for guests
who eat at an operation frequently - or even daily
25
26. Types Of Menus
Breakfast
(offers fruits, juices, eggs, cereals, pancakes,
waffles, and breakfast meats)
Lunch
(features sandwiches, soups, salads, specials;
usually lighter than dinner menu items)
Dinner
(more elaborate, steaks, roasts, chicken, sea food
and pasta; wines, cocktails, etc..)
26
27. Types Of Menus - Specialty
Children’s
Senior citizens’
Alcoholic beverage
Dessert
Room service
Take-out
Banquet
California (breakfast, lunch and dinner menu items on one
menu)
Ethnic
27
28. Basic Rules Of Menu Planning
Know your guest Know your operation
- Food preference - Theme or cuisine
- Price - Equipment
- Age - Personnel
- Quality standards
- Budget
28
30. Common Sources
For Menu Item Recipes
Old menus
Books
Trade magazines
Cookbooks for the
home market
30
31. Menu Balance
Business balance
- balance between food cost, menu prices,
popularity of items, financial and marketing
considerations
Aesthetic balance
- colors, textures, flavors of food
Nutritional balance
31
32. Elements Of Menu Copy
Headings
- Appetizers
- Soups
- Entrees
Sub-heading
- Under entree:
Steak, seafood, today’s specials
32
33. Elements Of Menu Copy
Descriptive copy (describe the menu items)
- should be believable and made in
short, easy-to-read sentences
- no description is needed for self-
explanatory item. i.e. Low Fat Milk
33
34. Truth-in-menu
Grading (foods are graded by size, quality, in line
with official standards)
“Freshness” (cannot be canned, frozen or fresh-
frozen)
Geographical origin (cannot make false claims
about the origin of a product)
Preparation (if the menu says baked, it cannot be
fried instead)
Dietary or nutrition claims (supported by scientific
data)
34
35. Supplemental Merchandising
Copy
Includes information such as:
Address
Telephone number
Days and hours of operation
Meals served
Reservations and payment policies
History of the restaurant
A statement about management’s commitment to
guest service
35
36. Menu Layout
Sequence:
Appetizers, soups, entrees, desserts
Depends on the operation (side orders, salads,
sandwiches, beverages)
Depends on popularity and profitability
Placement:
artworks; space; boxes; clip-on; etc.
36
39. Common Menu-design
Mistakes
Menu is too small
Type is too small
No descriptive copy
Every item treated the same
Some of the operations’ food and beverages are not
listed
Clip-on problems
Basic information about the property and its
policies are not included
Blank pages 39
41. Menu Evaluation:
Questions Most Often Asked
Is the menu attractive?
Do the colors and other design elements match the
operation’s theme and decor?
Are menu items laid out in an attractive and logical
way?
Is there too much descriptive copy? Not enough? Is
the copy easy to understand?
Is attention called to the items managers most want
to sell, through placement, color, description, type
size, etc.?
41
42. Menu Evaluation:
Questions Most Often Asked
Have guests complained about the menu?
Have guests said good things about the menu?
How does the menu compare with the menus of
competitors?
Has the average guest check remained steady or
increased?
Is there enough variety in menu items?
Are menu items priced correctly?
Are you selling the right mix of high-profit and
low-profit items?
42
43. Menu Evaluation:
Questions Most Often Asked
Is the typeface easy to read and
appropriate to the restaurant’s
theme and decor?
Is the paper attractive and stain-
resistant?
Have the menus been easy to
maintain so that guests always
receive a clean, attractive menu?
43
44. Menu Pricing
SUBJECTIVE PRICING:
The reasonable price method: from the guest’s
perspective - what charge is fair and equitable
The highest price method: sets the highest price that
the manager thinks guests are willing to pay
The loss lender price method: an unusually low
price is set for an item to attract guests
The intuitive price method: takes a wild guest,
trail-and-error
44
45. Menu Pricing
DESIRED FOOD COST PERCENTAGE PRICING
METHOD:
manager determines a reasonable food cost percent
then divides a menu item’s standard food cost by its
reasonable food cost percent
Selling price = $1.50 (item’s standard food cost) = $4.55
0.33 (desired food cost percent)
45
47. Menu Pricing
COMPETITION AND PRICING:
Know competitor’s menus, selling prices, and
guest preferences
Lower your prices
Raise your prices
Elasticity of demand:
Elastic: price change creates a larger % in the
quantity demanded (prices-sensitive)
Inelastic: the % change in quantity demanded is
less than the % change in price
47
48. The Menu:The Foundation For Control
GUEST SATISFACTION BASIC OPERATING ACTIVITIES:
CONTROL POINTS
SERVING MENU PLANNING
HOLDING PURCHASING
COOKING RECEIVING
PREPARING STORING
PRODUCTION ACTIVITIES
ISSUING
48
49. The Menu Influences
Product Control Procedures
every item on the menu represents a product to be controlled
Cost Control Procedures
careful cost control procedures must be followed,
particularly when expensive products and labor-intensive
service styles are used
Production Requirement
product quality, staff productivity and skills, timing and
scheduling, and other back-of-the-house functions are all
dictated by the menu
49
50. The Menu Influences
Equipment Needs
equipment must be available to prepare products required by
the menu
Sanitation Management
management must consider menu items in light of possible
sanitation hazards
Layout and Space Requirements
the physical space within which food production and service
take place - must be adequate for purchasing, receiving,
storing, issuing, producing, and serving every item on the
menu
50
51. The Menu Influences
Staffing Needs
as menu becomes more complex, greater demands may be
placed upon the staff
Service Requirements
the menu affects the skill levels required for service
personnel, along with equipment, inventory, and facilities
needed in the front of the house
Sales Income Control Procedures
elaborate menus require more stringent controls than simple
menus
51
52. Menu Planning
is also.. A Tool for:
Sales
lists the items an operation is offering for sale
Advertising
communicates a property’s food and beverage marketing
plans
Merchandising
target market expectations - products, service, ambience
(theme and atmosphere), perceived value
Marketing Tool
strive to meet or exceed the expectations of its target market
52
53. Priority Concerns Of
The Menu Planner
Priority Concerns of menu Planner
Wants and needs Guest
Concept of Value Quality of Item Flavour
Item Price Cost Consistency
Object of Property Visit Availability Texture/Form/Shape
Socio-Economic Factors Peak Volume Production Nutritional Content
and Operating Concerns
Demographic Concerns Visual Appeal
Sanitation Concerns
Ethnic Factors Aromatic Appeal
Layout Concerns
Religious Factors Equipment Concerns Temperature
53
54. Menu Planning Strategies
Rationalization
simplification for the sake of operational efficiency
cross-utilization : menu items use the same raw
ingredients
streamlining of the purchasing, receiving, storing,
issuing, production, and serving control points.
High-quality convenience foods make it easier to
offer new items without having to buy additional
raw ingredients
54
55. Factors That Influence Menu
Planning Strategies
Needs and wants of target markets
Several items from same ingredients
Storage requirements
Personnel skill levels
Product availability / seasonality
Quality and price stability
Sanitation procedures
55
56. External Factors
That Influence Menu Changes
Consumer Demands
decide which potential markets wants to attract
Economic Conditions
cost of ingredients, potential profitability of new menu items
Competition
many not want to serve next door’s best
Supply Levels
seasonal items, price to the quality and quantity
Industry Trends
industry’s response to new demands
56
57. Internal Factors
That Influence Menu Changes
Facility Meal Patterns
existing meal periods - breakfast, lunch and dinner
Concept and Theme
the image may rule out certain foods that do not
blend with its theme and decor
Operational System
costs for new equipment to the successful
production and service of new menu items
57
58. Pricing Approaches
Subjective Price Methods
intuition and knowing your guests (failed to relate
profit and costs)
The Reasonable Price Methods
presumes value to the guest (what charge is fair and
equitable)
The Highest Price Method
sets the highest price the guests are willing to pay
58
59. Pricing Approaches
The Loss Leader Method
an unusually low price is set for an item (or items)
to bring guests in
The Intuitive Price Method
wild guess about the selling price
(pricing methods based on assumptions, hunches
and guesses)
59
60. Pricing Approaches
Simple Mark-up Pricing Methods
designed to cover all costs and to yield the desired
profit.
Three Steps:
1. Determine the ingredients’ costs
2. Determine the multiplier
3. Establish a base selling price
60
62. Base Selling Price
If ingredient cost is $3.32
Base Selling Price = Ingredient Cost x Multiplier
$8.30 = $3.32 x 2.5
A base selling price in not necessarily the final selling price
62
63. Prime-Ingredient
Mark-Up Method
Base selling price = Prime Ingredient Cost x Multiplier
$8.30 = $1.59 x 5.22
or food cost is about 19%
63
64. Mark-Up with
Accompaniment Costs
Entree / Primary Costs $3.15
Plate Cost +$1.25
Food Cost $4.40
Mark-Up Multiplier x 3.3 (30% food cost)
Base Selling Price $14.52
64
65. Determining the Price Multiplier
Based upon:
experience or “rule of thumb”
contribution margin
impact of sales mix
does not reflect higher or lower labor cost
assume food cost associated with producing menu
item are know
65
66. Contribution Margin
Pricing Method
Contribution Margin refers to the amount left after a menu
item’s food cost is subtracted from its selling price.
Two steps in setting base selling price:
1. Determine the average contribution margin required
per guest
Non-Food + Required Profit = Ave. Contribution Margin Required/guest
No. of Expected guests
$295,000 + $24,000 = $3.75
85,000
66
67. Contribution Margin
Pricing Method
2. Determine the base selling price for a menu item
Base selling price = average contribution margin + Standard food cost
$7.35 = $3.75 + $3.60
67
68. Ratio Pricing Method
The ratio pricing method determines the relationship between
food costs and all non-food costs plus profit requirements
and uses this ratio to develop base selling price for menu
items.
Three steps
1. Determine the ratio of food costs to all other cost plus
profit requirements
All non-food costs + Required profit = Ratio
Food costs
$160,000 + $21,000 = 1.34
$135,000
68
69. Ratio Pricing Method
2. Calculate the amount of non-food cost and profit
required for a menu item
Non-food cost and profit required = Standard food cost x ratio
$5.03 = $3.75 x 1.34
3. Determine the base selling price for the menu item
Base Selling Price = Non-food cost and profit required + Standard food cost
$8.78 = $5.03 + $3.75
69
70. Simple Prime Costs Method
The term prime cost refers to the most significant costs in a food
service operation: food, beverage and labor.
A simple prime costs pricing method involves assessing the labor
costs for the food service operation and factoring these costs
into the pricing equation.
Three steps:
1. Determine the labor costs per guest
Labour Cost per guest = Labour costs / No. of expected guests
$2.80 = $210,000 / 75,000
70
71. Simple Prime Costs Method
2. Determine the prime costs per guest
Prime Cost per guest = Labour cost per guest + menu item’s food cost
$6.55 = $2.80 + $3.75
3. Determine base selling price
Base Selling Price = Prime costs Per guest
Desired Prime Costs%
$10.56 = $6.55 / 0.62
71
72. Specific Prime Cost Method
Specific Prime Cost Method - develops mark-ups for menu
items so that the base selling prices for the items cover
their fair share of labor costs.
Divide the menu items into 2 categories:
(A) extensive preparation
(B) non extensive preparation
clean up, and other non-preparation activities
72
73. Specific Prime Cost Method
Allocates appropriate % of total food costs and labor costs to
each category
(A) 60% of the total food cost
(B) 40% of the total food cost
(A) & (B) 55% of all labor costs
45% of all labor costs is incurred for service,
73
74. Specific Prime Cost Method -
Calculations
Operating Category A Category B
Budget Item Budget % (extensive preparation) (Non-extensive
Preparation)
(1) (2) (3) (4)
Items Items
Food Cost35% 60% of 35% = 21% 40% of 35% = 14%
Labour Cost 30% 55% of 30% = 17% 40% of 13% = 5%
All Other Cost 20% 60% of 13% = 8% 40% of 20% = 8%
Profit 15% 60% of 15% = 9% 40% of 15% = 6%
Total 100% 67% 33%
Mark-Up 100% =2.9% 67% = 3.2 33% = 2.4
Multiplier 35% 21% 14%
74
75. Important Pricing Considerations
The Concept of Value (price relative to quality)
The Basic Law of Supply and Demand
Volume Concerns Must be Considered
Price Charged by the Competition for a similar Product
75
76. Evaluating The Menu:
Menu Engineering
Basic Menu Engineering Process:
Stars - items that are popular and profitable
Plowhorses - items that are not profitable but popular
Puzzles - items that are profitable but not popular
Dogs - items that are neither profitable nor popular
76
77. Defining Profitability
Contribution Margin
a “high” contribution margin for an individual
menu item would be one that is equal to or greater
than the average contribution margin
Average Contribution Margin = Total Contribution Margin
Total Number of Item Sold
77
78. Defining Popularity
Popular Index bases upon the notion of “expected popularity”
For example:
4 items on a menu and each is assumed to be equally popular,
the sales of each would be expected to be 25%
100% ÷ 4 = 25%
Menu engineering assumes that an item is popular if its sales
equal 70% of what is expected..
For example:
a food item is considered popular if its sales is:
25% x 70% = 17.5% of total sales
78
79. Menu Engineering Worksheet
Menu Engineering Worksheet
Date: 6/10/00 _________________
Restaurant: ____________________________ Meal Period: Dinner
(A) (B) (C) (D) (E) (F) (G) (H) (L) (P) (R) (S)
Menu Number Menu Item Item Item Menu Menu Menu Menu
Item Sold Mix Food Selling CM Costs Revenues CM CM MM% Item
Name (MM) % Cost Price (E - D) (D x B) (E x B) (H - G) Category Category Classific-
ation
Chicken Plow-
Dinner 420 42% $2.21 $4.95 $2.74 $928.20 $2079.00 $1150.80 Low High horse
NY Strip
Steak 360 36% 4.50 8.50 4.00 1,620.00 3,060.00 1,440.00 High High Star
Lobster
Tail 150 15% 4.95 9.50 4.55 742.50 1,425.00 682.50 High Low Puzzle
Tenderloin
Tips 70 7% 4.00 6.45 2.45 280.00 451.50 171.50 Low Low Dog
Column N l J M
Totals 1,000 $3570.70 $7015.50 $3444.80
K=l/J O=M/N Q = (100%/items) (70%)
Additional Computations: 50.9% $3.44 17.5%
(Box K = Food Cost %; Box O = Average Contribution Margin)
79
80. Improving The Menu
Managing Plowhorses
Items low in contribution margin, but high in popularity
Increase prices carefully
Test for demand
Relocate the item to a lower profile on the menu
Shift demand to more desirable items
Combine with lower cost products
Assess the direct labor factor
Consider portion reduction
80
81. Improving The Menu
Managing Puzzles
Items high in contribution margin but low in
popular
Shift demand to these items
Consider a price decrease
Add value to the item
81
82. Improving The Menu
Managing Stars
Items high in contribution margin and high in
popularity
Maintain rigid specifications
Place in a highly visible location on the menu
Test for selling price inelasticity
Use suggestive selling techniques
82
83. Improving The Menu
Managing Dogs
Items that are low in contribution margin and low
in popularity:
Candidates for removal from the menu
83
