Menu Analysis & Engineering HRT383 Dinner Fall 08

Menu Analysis & Engineering

HRT383

Dinner Fall 08

04/19/23 HRT383 2

References

Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

CD-ROM TX911.3.M45 D79 2002

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Objectives

By the completion of this presentation you should be able to: Analyze a menu for profitability Apply menu engineering to menu analysis

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Important Terms

Menu engineering Plowhorses Puzzles Stars Dogs

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Introduction

This presentation explains how to evaluate a menu

When measuring a menu to see if it is successful 2 criteria must be met to declare it a winner:

1. Must be profitable in terms of individual item profitability

2. Most profitable item must be selling the best.

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Stars, Plowhorses, Puzzles, & Dogs

Method, called menu engineering, developed by Donald Smith Ph.D., Westin Hotels Distinguished Professor at Washington State University

This method rates the menu by measuring each entrée as to its profitability (gross profit) and its sales. It then combines these measurements and places each menu item into one of four classifications.

Plow Horse

Dog

PuzzleStar

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Contributing Margin

Determine the contributing margin (CM) of each item

CM same as item’s Gross Profit Use total food cost (include garnish,

accompaniments served with entrée such as salad, potatoes, rolls, butter etc.).

Selling Price – Food Cost = Contributing Margin

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Contribution MarginDollars vs. Food Cost Percentage

Steak Salmon Coffee

Selling Price $33.00 $23.00 $2.00

Cost $20.96 $7.12 $0.19

Food Cost % 63.52% 30.69% 9.5%

Cont. Margin $ $12.04 $15.88 $1.81

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Which one will/should your server sell ?Steak Salmon Coffee

Selling Price $33.00 $23.00 $2.00

Cost $20.96 $7.12 $0.19

Food Cost % 63.52% 30.69% 9.5%

Cont. Margin $ $12.04 $15.88 $1.81

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Which one will/should your server sell ?Steak Salmon Coffee

Selling Price $33.00 $23.00 $2.00

Cost $20.96 $7.12 $0.19

Food Cost % 63.52% 30.69% 9.5%

Cont. Margin $ $12.04 $15.88 $1.81

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Example

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Appetizers

Menu Plate

Contribu

tionQuantit

y Net Total

MENU ITEM Price Cost % Margin Sold Income Cost

Crab Cake 10.00 2.46 24.60% 7.54 54 540.00 132.84

Ravioli 7.00 1.95 27.86% 5.05 38 266.00 74.10

Duck 8.00 2.25 28.13% 5.75 22 176.00 49.50

En Croute 10.00 2.99 29.90% 7.01 27 270.00 80.73

Cheese 8.00 1.72 21.50% 6.28 15 120.00 25.80

SUBTOTAL APPETIZERS 43.00 11.3726.44

% 1171372.0

0 362.97

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Popularity

Average Popularity

80% of the average item sales per appetizer:

100 / 5 X 80% = 16%

Popularity of each menu item:

Number of portions sold divided by total number of meals sold

Crab Cake : 54 / 117 = 34.62%

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Popularity

Menu Plate

Contributio

nQuantit

y Net TotalPopulari

ty

MENU ITEM Price Cost % Margin SoldIncom

e Cost

Crab Cake 10.00 2.46 24.60% 7.54 54 540.00132.8

4 34.62%

Ravioli 7.00 1.95 27.86% 5.05 38 266.00 74.10 24.36%

Duck 8.00 2.25 28.13% 5.75 22 176.00 49.50 14.10%

En Croute 10.00 2.99 29.90% 7.01 27 270.00 80.73 17.31%

Cheese 8.00 1.72 21.50% 6.28 15 120.00 25.80 9.62%

SUBTOTAL APPETIZERS 43.00 11.37 26.44% $6.47 1561372.0

0362.9

7 16%

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HRT383 Dinner AppetizersPlowhorse

Star

*Crab Cake$7.75/34.62%

Dog Puzzle

100%

16%

Popularity

0 Contribution Margin $6.47

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Star

*Crab Cake$7.75/34.62%

Dog Puzzle

100%

16%

Popularity


*Ravioli$5.05/24.36%

* Duck $5.75/14.10%

* En Croute$7.01/17.31%

*Cheese$6.28/9.62%

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Menu Engineering

Men

u Plate

Contri-

butionQuantit

y Net TotalPopularity Menu

MENU ITEMPric

e Cost %Margi

n SoldIncom

e Cost Engineering

Crab Cake10.0

0 2.4624.60

% 7.54 54540.0

0 132.84 34.62% STAR

Ravioli 7.00 1.9527.86

% 5.05 38266.0

0 74.10 24.36% Plow Horse

Duck 8.00 2.2528.13

% 5.75 22176.0

0 49.50 14.10% DOG

En Croute10.0

0 2.9929.90

% 7.01 27270.0

0 80.73 17.31% STAR

Cheese 8.00 1.7221.50

% 6.28 15120.0

0 25.80 9.62% DOG

SUBTOTAL APPETIZERS

43.00 11.37

26.44% $6.47 156

1372.00 362.97 16%

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The Four Key Menu Categories

Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

Stars have both high popularity and high CM Puzzles have relatively low popularity and high

margins; lower price. Dogs are both low in popularity and CM; eliminate

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Star

*Crab Cake$7.75/34.62%

Dog Puzzle

100%

16%

Popularity


*Ravioli$5.05/24.36%

* Duck $5.75/14.10%

* En Croute$7.01/17.31%

*Cheese$6.28/9.62%

Increase $ $8 - ?Cut Portion ?

ELIMINATE ?

ELIMINATE ?

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Data Trap Fall ‘08

See Dinner Hand Out for Main Courses

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Main Courses

MENU ITEMMenu Price

Plate Cost

Food Cost %

Contribution

MarginQuantity Sold

Net Income

Total Cost

Popularity

Menu Engineerin

g

Loin Steak 45.00 23.00 51.11% 22.00 59 $2,655$1,357.0

0 13.50%

Lamb 32.00 16.26 50.81% 15.74 64 $2,048$1,040.6

4 14.65%

Chicken 26.00 13.14 50.54% 12.86 42 $1,092 $551.88 9.61%

Halibut 35.00 17.71 50.60% 17.29 57 $1,995$1,009.4

7 13.04%

Pork 30.00 15.00 50.00% 15.00 73 $2,190$1,095.0

0 16.70%

Ravioli 24.00 17.33 72.21% 6.67 32 $768 $554.56 7.32%

Rabbit 28.00 14.85 53.04% 13.15 22 $616 $326.70 5.03%

Paella 30.00 13.32 44.40% 16.68 35 $1,050 $466.20 8.01%

Duck 32.00 17.51 54.72% 14.49 53 $1,696 $928.03 12.13%

SUBTOTAL MAIN DISHES 53.05% 14.88 437 $14,110 $7,329

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Popularity

Average Popularity

80% of the average item sales per appetizer:

100 / 9 X 80% = 8.88%

Popularity of each menu item:

Number of portions sold divided by total number of meals sold

Rib Eye : 59 / 4.97 = 13.5%

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Main Courses

MENU ITEMMenu Price

Plate Cost

Food Cost %

Contribution

MarginQuantity Sold

Net Income

Total Cost

Popularity

Menu Engineerin

g

Loin Steak 45.00 23.00 51.11% 22.00 59 $2,655$1,357.0

0 13.50%

Lamb 32.00 16.26 50.81% 15.74 64 $2,048$1,040.6

4 14.65%

Chicken 26.00 13.14 50.54% 12.86 42 $1,092 $551.88 9.61%

Halibut 35.00 17.71 50.60% 17.29 57 $1,995$1,009.4

7 13.04%

Pork 30.00 15.00 50.00% 15.00 73 $2,190$1,095.0

0 16.70%

Ravioli 24.00 17.33 72.21% 6.67 32 $768 $554.56 7.32%

Rabbit 28.00 14.85 53.04% 13.15 22 $616 $326.70 5.03%

Paella 30.00 13.32 44.40% 16.68 35 $1,050 $466.20 8.01%

Duck 32.00 17.51 54.72% 14.49 53 $1,696 $928.03 12.13%

SUBTOTAL MAIN DISHES 53.05% 14.88 437.00 $14,110 $7,329 8.88%

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Exercise

Please work with your fellow students and come up with suggestions/decisions.

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HRT383 Dinner M/CPlowhorse

Star

Dog

Puzzle

100%

8.88%

Popularity


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Main Courses

MENU ITEMMenu Price

Plate Cost

Food Cost %

Contribution

MarginQuantity Sold

Net Income

Total Cost

Popularity

Menu Engineerin

g

Loin Steak 45.00 23.00 51.11% 22.00 59 $2,655$1,357.0

0 13.50%

Lamb 32.00 16.26 50.81% 15.74 64 $2,048$1,040.6

4 14.65%

Chicken 26.00 13.14 50.54% 12.86 42 $1,092 $551.88 9.61%

Halibut 35.00 17.71 50.60% 17.29 57 $1,995$1,009.4

7 13.04%

Pork 30.00 15.00 50.00% 15.00 73 $2,190$1,095.0

0 16.70%

Ravioli 24.00 17.33 72.21% 6.67 32 $768 $554.56 7.32%

Rabbit 28.00 14.85 53.04% 13.15 22 $616 $326.70 5.03%

Paella 30.00 13.32 44.40% 16.68 35 $1,050 $466.20 8.01%

Duck 32.00 17.51 54.72% 14.49 53 $1,696 $928.03 12.13%


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Main Courses

MENU ITEMMenu Price

Plate Cost

Food Cost %

Contribution

MarginQuantity Sold

Net Income

Total Cost

Popularity

Menu Engineering

Loin Steak 45.00 23.00 51.11% 22.00 59 $2,655$1,357.0

013.50

% STAR

Lamb 32.00 16.26 50.81% 15.74 64 $2,048$1,040.6

414.65

% STAR

Chicken 26.00 13.14 50.54% 12.86 42 $1,092 $551.88 9.61%PLOW

HORSE

Halibut 35.00 17.71 50.60% 17.29 57 $1,995$1,009.4

713.04

% STAR

Pork 30.00 15.00 50.00% 15.00 73 $2,190$1,095.0

016.70

% STAR

Ravioli 24.00 17.33 72.21% 6.67 32 $768 $554.56 7.32% DOG

Rabbit 28.00 14.85 53.04% 13.15 22 $616 $326.70 5.03% DOG

Paella 30.00 13.32 44.40% 16.68 35 $1,050 $466.20 8.01% PUZZLE

Duck 32.00 17.51 54.72% 14.49 53 $1,696 $928.0312.13

% PLOW HORSE


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The Four Key Menu Categories

Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

Stars have both high popularity and high CM Puzzles have relatively low popularity and high

margins; lower price. Dogs are both low in popularity and CM; eliminate

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Main Courses

MENU ITEMMenu Price

Plate Cost

Food Cost %

Contribution

MarginQuantity Sold

Net Income

Total Cost

Popularity

Menu Engineering

Loin Steak 45.00 23.00 51.11% 22.00 59 $2,655$1,357.0

013.50

% STAR

Lamb 32.00 16.26 50.81% 15.74 64 $2,048$1,040.6

414.65

% STAR

Chicken

Increase $

26.00 13.14 50.54% 12.86 42 $1,092 $551.88 9.61%PLOW

HORSE

Halibut 35.00 17.71 50.60% 17.29 57 $1,995$1,009.4

713.04

% STAR

Pork 30.00 15.00 50.00% 15.00 73 $2,190$1,095.0

016.70

% STAR

RavioliEliminate24.00 17.33 72.21% 6.67 32 $768 $554.56 7.32% DOG

RabbitEliminate28.00 14.85 53.04% 13.15 22 $616 $326.70 5.03% DOG

PaellaLower $30.00 13.32 44.40% 16.68 35 $1,050 $466.20 8.01% PUZZLE

Duck

Increase $

Reduce size

32.00 17.51 54.72% 14.49 53 $1,696 $928.0312.13

% PLOW HORSE


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Up Selling

Your Favorite

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Placement

Two Schools of thought

1. Menu Sequence Menu should follow progression of meal

2. Focal Points Use focal points on the menu to push certain

menu items

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Focal Points

Focal Point

Focal Point

Single Sheet Menu Twofold Menu

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Focal Points

2

3

4

5

Focal Point

Threefold Menu

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Specials

Larger Bolder type than the rest of menu Longer description Concept of Closure

people’s eyes are drawn to what ever is enclosed by a box

Color, illustration, and/or pictures, bullets can be used to draw attention to signature items.

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Branding

Fast food Coke / Pepsi TGIF Jack Daniels

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Menu Pricing

Odd-Cents pricing Majority of prices end in either a “5” or a “9”

Price rounding. Within certain price bands, price increases have

little negative impact on customers

Placement

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Price Placement

Baked Chicken……….$8.99

Lemon Sole………….$11.99

Lamb Steak………….$12.99

Swordfish Steak…..…$14.99

BAKED CHICKENTender pieces of chicken breast

$8.99

LEMON SOLEFresh filets sautéed with lemon caper sauce

$11.99

LAMB STEAK Center cut of lamb served on a bed of rice

$12.99

SWORDFISH STEAKCharcoal grilled served with beurre blanc

$14.99

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Price Placement

BAKED CHICKENTender pieces of chicken breast

Eight dollars and ninety nine cents

LEMON SOLEFresh filets sautéed with lemon caper sauce

Eleven dollars and ninety nine cents

LAMB STEAK Center cut of lamb served on a bed of rice

Twelve dollars and ninety nine cents

SWORDFISH STEAKCharcoal grilled served with beurre blanc

Fourteen dollars and ninety nine cents

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Conclusion

Menu analysis is important If demographic studies, internal capacities, cost cards, and

markups have been executed correctly, the score should be a good one

Analysis should be done using either the Smith or the Hurst methods to ascertain the profitability of the menu

If the analysis shows a poor menu, make improvements Good menu: first step has been taken toward running a

profitable operation. It’s just that simple

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Where to Get More Information

Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

CD-ROM TX911.3.M45 D79 2002 Most Menu & F&B Management Books

Documents

Menu Analysis & Engineering HRT383 Dinner Fall 08