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 Lamb Salmon Coffee Selling Price 24 00 22 00 2 00 Cost 10 78 5 97 0 19 Food Cost 44 92 27 14 9 5 Cont Margin 13 22 16 03 1 81 01 14 19 HRT383 8 Contribution Margin Dollars vs Food Cost Percentage Lamb Salmon Coffee Which one will should your server sell Selling Price 24 00 22 00 2 00 Cost 10 78 5 97 0 19 Food Cost 44 92 27 14 9 5 Cont Margin 13 22 16 03 1 81 01 14 19 HRT383 9 Contribution Margin Dollars vs Food Cost Percentage Lamb Salmon Coffee Which one will should your server sell Selling Price 24 00 22 00 2 00 Cost 10 78 5 97 0 19 Food Cost 44 92 27 14 9 5 Cont Margin 13 22 16 03 1 81 01 14 19 HRT383 10 Data Trap Spring 06 See Dinner Hand Out 01 14 19 HRT383 11 Menu Engineering 1 2 Menu Item Number Sold 3 4 Item Sales Food Cost Percentage Price Soup Salad 5 Total Sales 2 X 3 6 10 Total Food C M Cost 4 X 5 Crab Cake 38 10 00 12 9 380 49 02 8 71 Tapas 19 8 00 18 9 152 28 69 6 49 Shrimp 30 10 00 32 9 300 98 70 6 71 G Cheese 37 8 00 36 0 296 106 56 5 12 Ravioli 34 7 00 30 6 238 76 76 4 86 1 366 355 73 158 7 Food Cost Percentage 6 5 25 8 8 Total Contribution to Margin 5 6 1010 27 9 Average Contribution Margin Customer 8 2 6 39 10 Contribution Margin per menu Item 5 6 2 01 14 19 HRT383 12 Popularity 11 Average Popularity 80 of the average item sales per appetizer 100 5 X 80 16 12 Popularity of each menu item Number of portions sold divided by total number of meals sold Crab Cake 38 158 24 05 Ceviche 19 158 12 03 J Shrimp 30 158 18 99 G Cheese 37 158 23 42 Ravioli 34 158 21 52 01 14 19 HRT383 13 HRT383 Dinner Appetizers 100 Plowhorse Star Popularity 16 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 39 14 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity 16 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 39 15 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity 16 Tapas 6 49 12 03 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 6 39 16 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 17 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 G Cheese 5 12 23 42 Popularity Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 18 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 G Cheese 5 12 23 42 Popularity Ravioli 4 86 21 52 Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 19 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 20 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity Reduce portion G Cheese 5 12 23 42 Ravioli 4 86 21 52 Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 21 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity Reduce portion G Cheese 5 12 23 42 Ravioli 4 86 21 52 Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 22 HRT383 Dinner Appetizers 100 Plowhorse Star Crab Cake 8 71 24 05 Popularity Reduce portion G Cheese 5 12 23 42 Ravioli 4 86 21 52 Shrimp 6 71 18 99 16 Tapas 6 49 12 03 01 14 19 Dog 0 Contribution Margin HRT383 6 39 Puzzle 23 Data Trap Winter 06 See Dinner Hand Out for Main Courses Desserts 01 14 19 HRT383 24 Exercise Please work with your fellow students and come up with suggestions decisions 01 14 19 HRT383 25 HRT383 Dinner Main Courses 100 Plowhorse Star Popularity 13 33 Dog 01 14 19 0 Puzzle Contribution Margin HRT383 14 14 26 HRT383 Dinner Main Courses 100 Plowhorse Star Sirloin 13 75 40 62 Popularity Salmon 16 03 14 14 13 33 Dog 01 14 19 0 Chix Pork 10 85 12 08 Lamb 13 22 11 31 14 48 11 05 Risotto 14 91 10 80 Contribution Margin HRT383 14 14 Puzzle 27 The Four Key Menu Categories Plowhorses are items that are relatively popular but have a high contribution margin Items …