January 4

Surviving Inflation With Menu Engineering


Optimize Your Restaurant Menu to Combat Inflation With Menu Engineering Tips From the Experts at meez

If it’s not one thing, it’s another. The last four years of compiled labor and supply chain issues have left restaurant operators stuck between a rock and a hard place.

Managing the rising costs of goods and services while keeping menu prices profitable—yet agreeable—to guests is no easy feat.

But, with menu engineering techniques, restaurants can manage the ratio between the cost of goods and menu prices to ensure sustainable business growth, even during economic uncertainty.

To help you get started, we spoke with our friends at meez, recipe management and food costing software, to learn more about menu engineering, how it works, and how it can help your business thrive.

Menu Engineering: What It Is and How To Do It

“Menu engineering is the process of analyzing the total sales, profit margin, and revenue of your menu, as well as associated recipes, ingredient costs, the volume of usage of each recipe and ingredients from a given time period,” Josh Sharkey, CEO and Co-founder of meez, said. “This analysis is then used to identify opportunities to increase profit margins on your menu and lower theoretical food costs.”

Gathering all the data associated with your menu is the most time-consuming aspect, but the insights you’ll gain can be used to make more informed decisions.

“This could be increasing or decreasing prices, identifying items to sell more or less of, as well as improving how you sell high-profit items that aren’t moving enough, improving recipes or portion size optimization, and much more,” Sharkey continued.

Additionally, this type of menu management helps monitor the price of ingredients over time so you can make smarter purchasing decisions or spot opportunities to negotiate prices with your suppliers.

While it’s common in the kitchen, menu engineering can and should be done across all menus, even your bar program. Every opportunity you have to control the costs of goods in your establishment is an opportunity to increase your profit margins.

To understand how menu engineering works, we’ll break down a more in-depth article by meez into three simple steps.

Three Steps To Engineer Your Menu

  1. Identify the food costs of each recipe on your menu

    To find the food cost for each item on your menu, you’ll need to break down the portion cost of each ingredient in a recipe.

    In an example provided by meez, if you buy a 36-count bag of tortillas for $16 for tacos on your menu, then to find the single cost of one tortilla, you divide 16 by 36. You get 0.44 cents for the tortilla. Move on to the next ingredient used to make a single taco and apply the same logic.

    Once you’ve gone through each ingredient, add the individual portion cost in the taco recipe to get the food cost.
  2. Find the Profit Margin and Food Cost Percentage of Menu Items

    Once you have the food cost of each item on your menu, you can compare that to what you’re selling it for to get the item’s profit margin and food cost percentage.

    In meez’s example, if your food cost for a single taco is $1.17, and you’re selling it for $5, you’d subtract the two to get a profit margin of $3.83.

    You can get the food cost percentage by calculating the percentage of $1.17 out of $5 (psst, it’s 23.4%. So the profit margin would be 76.6%.)

    Once you’ve reviewed each item on your menu, list your recipes from highest to lowest profit margins.
  3. Bring in the sales data

    After identifying high and low-profit items, you’ll want to look at each item’s sales volume.

    Most modern POS systems have analytics on this exact thing, which can speed up the process. If you’re working with a new menu—you might have to wait a few weeks to get a feel for what’s hot and what’s not.

Some things to keep in mind:

  • High-profit, high-volume menu items are golden.
  • High-profit, low-volume menu items could use some attention to increase sales.
  • Low-profit, high-volume menu items might need price or portion adjustments to increase profitability.
  • Low-profit, low-volume menu items are doing no favors for your menu.

These categories are traditionally labeled as Stars, Plowhorses, Puzzles, and Dogs.

You can take menu engineering even further and should figure in labor costs when building out pricing. Still, get comfortable with these three steps, and you’re on your way to being an engineering machine.

Managing Inflation With Menu Engineering

I could be wrong—but I’m guessing you didn’t get into the restaurant business because you love spreadsheets, accounting, and finances.

So, if you’re like many chefs, managers, and owners operators out there–inflation can catch you off guard.

With menu engineering, you can stay ahead of pricing changes and keep your menu profitable, especially when inflation is causing all kinds of chaos.

Here are a few ways menu engineering offers an advantage during inflation.

Monitor Price Changes

By engineering your menu, you’re monitoring the cost of goods and profit margins of your menus. This analysis makes it easier to identify when ingredient prices change and the best course of action to maintain profitability.

“The ability to see how price changes of high-usage items in the kitchen (i.e., butter, flour, tomatoes, etc) impact a restaurant’s revenue and profits, in real-time, enables chefs and purchasers to make better buying decisions,” Sergio Hernandez, Culinary Director, and Account Manager at meez said.

Consider buying in volume or negotiating with suppliers to leverage better pricing when experiencing price increases.

Optimize Recipes and Portion Control

Sometimes, working with inflation means tightening up your menu and ingredient needs. Engineering your menu can help.

“You can look to optimize recipes with cross-utilization of products or identify a high-cost ingredient that will have a big impact if you can find a way to save a little, just on that one ingredient,” Sharkey said. “Another opportunity is to assess portion size as often we tend to over-portion.”

With data-driven insights, you are better equipped to optimize your offerings—decreasing food waste and lowering food cost percentages.

Sharkey shared a pro tip when considering portions: “Ask your dishwashers which plates come back most often with the most food still left on them!”

Increase Menu Profitability

“When done holistically, analyzing the impact of changes made to your menu based on your sales volumes, engineering enables chefs and operators to increase profit margins and reduce food costs without changing any part of their day-to-day operations,” Sharkely shared.

Analyzing each menu item’s profit margin and sales volume helps strategically optimize your menu profitability.

For instance, if you’re tightening your menu, you’ll want to know which high-volume items are also high-profit. These are the win-win items. Your customers love them, and the price point is bringing in revenue. On the other hand, a low-profit item with high-volume sales might need some altering. You might look into cheaper ingredients or increasing the sale price to increase profitability during inflation.

“Very small increases in sell price can have a huge impact on increasing your total profits,” Sharkey said.

Organize a Menu Engineering Project

The last step you’ll want to consider when introducing menu engineering as a staple of your business is how you will organize the process.

You’ll want to implement a process that’s easy to use, update, reference, and train—while decreasing the opportunity for human error.

Speaking on menu engineering techniques, Ursula Siker, Account Executive at meez, shared, “I’ve heard everything from classic guesswork to highly sophisticated cost-indexed Excel sheets to hiring consultants. Regardless of the process—until now, it has always had to happen in a combination of spaces to get accurate data with meaningful insights.”

That’s where meez can come in handy.

As one of the most robust recipe management and food costing software on the market, meez helps kitchen operators manage and consolidate everything from inventory, invoicing, recipe management, and—you guessed it, automated menu engineering.

With their new menu engineering feature, restaurants input recipe and ingredient lists, whether for the kitchen or behind the bar, and build, cost, and engineer menus to increase profitability. Additionally, the product lets you project the impact of even the most minor recipe changes in real time—helping you strategize to keep revenue up and food costs low.

This level of menu engineering might not come easy to everyone, but it’s essential to running a successful business. If you want to avoid human error and get your team out of the admin seat and back on the line, an affordable software solution like meez is worth looking into.

Feel free to take an interactive tour of menu engineering by meez, and as always, consider a demo to see if their product is right for you!

About the author


Ashley McNally likes to cook, loves to bake, and is always dreaming of her next meal. With over 13 years of experience working in various roles within a restaurant — McNally has made a home in hospitality.


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