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 Example 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 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 16 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 17 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 18 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 9 62 Contribution Margin HRT383 6 47 Puzzle 19 Data Trap Winter 08 See Dinner Hand Out for Main 01 14 19 Courses HRT383 20 Main Courses Food Contri Cost bution Cost 42 00 26 59 Lamb 38 00 Chicken Menu Plate Price Rib Eye Popularity Quantity Net Total Margin Sold Income Cost 63 31 15 41 220 9 240 5 849 80 19 28 18 70 49 21 19 30 117 4 446 2 187 90 10 25 26 00 12 91 49 65 13 09 108 2 808 1 394 28 9 47 Duck 32 00 18 70 58 44 13 30 72 2 304 1 346 40 6 31 Swordfish 35 00 12 16 34 74 22 84 160 5 600 1 945 60 14 02 Pork 30 00 13 28 44 27 16 72 109 3 270 1 447 52 9 55 Short Rib 30 00 12 64 42 13 17 36 110 3 300 1 390 40 9 64 Scampi 32 00 13 59 42 47 …