Page 22 - GBC Spring 2020 ENG

David Hopkins
David is the President and Founder of The Fifteen Group Inc., which has the duel functionality of working with existing restaurants to make them more profitable as well as creating, developing and launching exciting new restaurant concepts. Contact David at dhopkins@thefifteengroup.com or 416.597.3173.
Menu engineering is different than menu development. While development is creating the menu items, the flavour profiles, etc., menu engineering is the analysis of the menu that can maximize the profitability of your menu.
HOW IT WORKS
Any time spent in the restaurant industry would have you thinking that food cost should be 30% of sales. As that was the “industry” target, it seems to make sense to price a menu to create a 30% food cost. So, for example, if a club sandwich costs $3.00 to plate, then one would sell it for $10.00 (3 being 30% of 10). If you continue to price all your menu items at a 30% food cost, then you are going to operate with a 30% food cost and all will be good. Right?
Wrong. If you were to do that, then yes, you would have a 30% theoretical food cost, but you wouldn’t be doing the two most important things. First, you wouldn’t be maximizing your menu profitability and secondly, you wouldn’t be providing the best value to your guests. To effectively maximize one’s menu profitability and the guest value proposition, one needs to focus entirely on profit margin in dollars, not percentage. To give you an example of why this matters, look at the chart to the right. As you will see, there are three pasta dishes on the menu.
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