Menu Analysis Engineering HRT383 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 01 14 19 HRT383 2 Objectives By the completion of this presentation you should be able to 01 14 19 Analyze a menu for profitability Apply menu engineering to menu analysis HRT383 3 Important Terms Menu engineering Plowhorses Puzzles Stars Dogs 01 14 19 HRT383 4 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 2 01 14 19 Must be profitable in terms of individual item profitability Most profitable item must be selling the best HRT383 5 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 entr e as to its profitability gross profit and its sales It then combines these measurements and places each menu item into one of four classifications Star 01 14 19 Plow Horse Do g HRT383 Puzzle 6 Contributing Margin Determine the contributing margin CM of each item Selling Price Food Cost Contributing Margin 01 14 19 CM same as item s Gross Profit Use total food cost include garnish accompaniments served with entr e such as salad potatoes rolls butter etc HRT383 7 Contribution Margin Dollars 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 01 14 19 HRT383 8 Contribution Margin Dollars vs Food Cost Percentage Steak Salmon Which one will should your server sell Selling Price 33 00 23 00 Coffee Cost 20 96 7 12 0 19 Food Cost 63 52 30 69 9 5 Cont Margin 12 04 15 88 1 81 01 14 19 HRT383 2 00 9 Contribution Margin Dollars vs Food Cost Percentage Steak Salmon Coffee Which one will should your server sell 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 01 14 19 HRT383 10 Data Trap Fall 07 See Dinner Hand Out 01 14 19 HRT383 11 Appetizers Contribu Menu Plate Quantity Net Total Price Cost Margin Sold Income Cost 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 37 26 44 117 1372 00 362 97 MENU ITEM Crab Cake 01 14 19 tion HRT383 12 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 01 14 19 HRT383 13 Popularity Contribut Menu Plate Quantity Net Total Price Cost Margin Sold Income Cost 10 00 2 46 24 60 7 54 54 540 00 132 84 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 44 156 1372 00 362 97 MENU ITEM Crab Cake 01 14 19 ion HRT383 6 47 Popularity 16 14 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Popularity 16 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 47 15 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Popularity Ravioli 5 05 24 36 16 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 47 16 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Popularity Ravioli 5 05 24 36 16 Duck 5 75 14 10 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 47 17 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Popularity Ravioli 5 05 24 36 En Croute 7 01 17 31 16 Duck 5 75 14 10 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 47 18 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Popularity Ravioli 5 05 24 36 En Croute 7 01 17 31 16 Duck Dog 01 14 19 0 Cheese 5 75 14 10 6 28 9 62 Contribution Margin HRT383 6 47 Puzzle 19 Menu Engineering ContriMenu Plate Price Cost 10 00 Ravioli Popular bution Quantity Margin Sold 2 46 24 60 7 54 54 540 00 132 84 34 62 STAR 7 00 1 95 27 86 5 05 38 266 00 74 10 24 36 Plow Horse Duck 8 00 2 25 28 13 5 75 22 176 00 49 50 14 10 DOG En Croute 10 00 2 99 29 90 7 01 27 270 00 80 73 17 31 STAR Cheese 8 00 1 72 21 50 6 28 15 120 00 25 80 9 62 DOG SUBTOTAL APPETIZERS 43 00 11 37 26 44 156 1372 00 362 97 MENU ITEM Crab Cake 01 14 19 6 47 HRT383 Net Incom e Total ity Cost Menu Engineering 16 20 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 01 14 19 HRT383 21 HRT383 Dinner Appetizers 100 Plowhorse Crab Cake 7 75 25 69 Increase 9 Tapas Cut Portion Popularity Star Increase 8 Ravioli 5 75 19 66 Cut Portion 5 05 18 8 Goat Cheese 6 52 23 08 16 Prawns 7 20 11 97 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 50 22 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 7 75 34 62 Increase 8 Cut Portion Ravioli 5 05 24 36 Popularity En Croute 7 01 17 31 16 Duck ELIMINATE Dog 01 14 19 0 Cheese 5 75 14 10 ELIMINATE 6 28 …