Trimming the Fat: Lower Food Purchasing Costs

From renovations to computer systems, equipment to uniforms — restaurant costs have a tendency to add up quickly. We can always keep a renovation basic or chalk up the cost of a new piece of refrigeration equipment to its investment value, but the one area where it can be more challenging to manage is the cost of food.

Jeremiah Higgins When we sit down to discuss operational standards with a restaurant operator, one of the most important line items we cover is how to maintain a kitchen with the freshest, most delicious and sustainable ingredients at a low cost.

 

Over the years, we learned a variety of tips and tricks to keep costs low but menu standards high. There are a few simple things that any restaurant can do to streamline and reduce purchasing costs.

First, start with the delivery area. Operators can eliminate many problems related to food costs right at the back door. Begin by meeting with each vendor. Ask each vendor to build current order guides listing only the product that the restaurant buys from them. Copy this spreadsheet into the foodservice operator's office computer so that the ordering managers can print it out. Include a par for each item, or an amount that should be on the shelf, in the kitchen and in the front of the house. Foodservice operators can get this from running a report of the current month, with last year's dates on their point of sale (POS) systems. Take each menu item and create a spreadsheet with each day of the week on it.

Take the foodservice operation's detailed menu items report the POS system generates and use it to come up with an average for each day of the week and each menu item. For instance, if the restaurant sold five salmon on the first Monday of the month, seven salmon the next Monday, and six and five on the last two Mondays, your average par for a Monday for salmon is six to seven. If the restaurant's sales begin to climb, adjust the foodservice operation's pars to meet the percent by which sales have increased.

When your foodservice managers check their inventories, knowing the par levels will help them understand the amount they need to order and, just as importantly, help prevent over-ordering. Only ordering the product that a restaurant actually sells will keep the business' money in the bank instead of on its shelves. It also has the added benefit of reducing labor hours for the foodservice operation's prep team. Let's face it, many staff members want to get as many hours as the business will allow.

If a foodservice operation continues to over-order products, chances are the staff will prep the extra product. The product will not be as fresh, or it will go into the trash bin. So, essentially, not using pars for product will result in a higher labor cost for the foodservice operation, the use of product that isn't the optimal quality, and even spoilage and waste. Anyway the foodservice operation slices it, the business' hard-earned money ends up in the trash. Additionally, I would also recommend utilizing a day dot system on your entire product, rotating the product appropriately to minimize waste.

Foodservice operators need to keep their inventory tight. Stock sheets should hang on a clipboard in a specified area near the back door. When the delivery person brings in their product, the manager or other designated staff member can take this clipboard and check the inventory order sheet against the invoice, ensuring correct product has been delivered, prices are accurate, and that you are getting ounce for ounce, product for product, what you are paying for.

Next, purchase an industrial foodservice floor scale that can stay in the kitchen prep area to weigh in any product that the foodservice operator buys by the pound. Nearly all delivery people are honest, but during my years in the restaurant business I have caught some dropping light product more times than I care to recall, whether on purpose or by mistake, and as a result I saved thousands on lost product by weighing my deliveries.

I once discovered that a produce purveyor that I had known and trusted for more than six years had started his own produce business with product that I was paying for. He was pulling product from my produce boxes, and other customers, and selling them to his last customer on his route for 50 percent off.

Finally, foodservice operators should try to establish a standard delivery time with their vendors. I suggest that all deliveries arrive between 7 a.m. and 10 a.m. Operators should stress to their vendors that failure to drop within your specified delivery times will result in loss of business for them.

It's important for foodservice operators to stay strict with their drop times because setting specified delivery times stresses the importance of receiving product to both the delivery person and to the restaurant's staff. Foodservice operators pay good money for the products their vendors drop at the back door, and therefore it is important to ensure that the business only accepts the very best quality and the exact amount ordered.

Drivers who show up at their convenience may find the restaurant's manager involved in setting up the kitchen, preparing the dining room for business or on the floor with guests. If the manager gets pulled into checking in a delivery at an odd time, this individual may be, understandably, rushed and may miss important products. A time-stressed manager may skip weighing in the product or fail to consult the purveyor product order sheets. Foodservice operators are charged for the missing product anyway.

I would recommend that a restaurant take delivery of its most expensive products — meaning meats, seafood, etc. — as early as possible because this can help prevent a manager from having any "I-was-too-busy-to-check" excuses. Only the general manager or kitchen manager should check in delivery items.

Additionally, it is a good idea to place key items in a lock box within the cooler, and only give a key to the head chef or general manager. Key items are those items on the menu that run at a higher food cost, and are very tempting to staff members, such as lobsters, steaks, and high-end food items.

As for delivery standards, my delivery reps know that I will hold them up inspecting their product. I will send back the product if it is not up to my specifications and I will require them to return the product if it doesn't meet these specifications. If they know this about you, believe me, they will bring you the very best product to ensure that they can keep their delivery schedule with minimal headaches.

Recently I hired a director of purchasing to follow these guidelines for our seafood restaurant, Arch Rock Fish in Santa Barbara, Calif. In one year, we reduced our food cost by nearly three points and an extra savings to our restaurant of $45,000.

It's all about making small changes that create big, lasting results. Many of the reasons that an eatery's costs can flare is by overlooking simple procedures and tests. It's important to utilize restaurant-wide, cost-insurable standards across each platform of the business. If owners and operators start with these procedures, I can ensure that they will see costs drop and budgets bump immediately.

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