How many food operations don’t know their recipes cost? I have heard estimates of 80%-90% of food service operations don’t. In an industry with a high failure rate, this seems incomprehensible.
Food cost is one of our biggest controllable costs and understanding the expected cost of recipes is fundamental to managing and planning in a food business. Costing recipes is made easier with software solutions such as Write-a-Recipe (www.writearecipe.com).
A good recipe costing software solution will allow you create sub/batch recipes that can be used as an ingredient in other recipes, reducing duplication and allowing costs to flow through to the primary recipe.
It is also important you are able to factor yields into your recipe costs. Many ingredients used in recipes “yield”/output a lesser usable amount after the production process. Meat is a classic example, where butchering, trimming and the cooking process make a material impact on the amount which is plated. Some software solutions allow you to factor the yield on each ingredient, others factor yield on the total output of the recipe/sub-recipe.
Ingredients are often measured in different ways. For example, you may purchase flour by the kilogram, but use it by the gram. Your recipe costing solution should allow you to specify the unit of measure (UoM) for the different ways in which ingredients are used. It is also important that the system allow you to control the conversion between the different UoMs.
Your solution should also enable you to analyse the performance of your recipe in the context of the menu as a whole. A balanced menu has a mixture of high margin and lesser margin items that provide a balance between customer value and profitability. Techniques such as “Menu Engineering” enable operators to monitor this balance and identify menu items that require attention, or just aren’t working.
The food service industry engenders a lot of passion from dedicated operators. However we all need to keep sight of the fact that we are in a tough business and passion needs to be balanced with adequate management.
Thanks a good deal for sharing the great concepts!