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Reducing Food Costs - Best Practices

12.17.2015 by Steve Crichlow


In today’s food service environment, controlling costs is more critical than ever.

Much is written on how to control food costs – one of the most important expenditures of running a restaurant. Food costs include: food, beverages and paper costs.
While food costs vary depending on the type of restaurant (from QSR, Coffee Shop, to Fine Dining), there are three common internal practices that apply equally to all. Implementing the following practices can ensure maximum efficiencies for controlling critical costs; all of which reduce the possibilities of spoilage, waste and contamination.

1. Regular Inventories - Including weekly counts, waste accounting system, proper ordering, receiving, and storage. Inventories should include:

  • Weekly counts and cost calculations – this gives management awareness to any variances in their food budget and when corrections need to be implemented.
  • Waste accounting system – no matter how good an operator might be, there will always be waste. Waste occurs from a multitude of causes: incorrect orders made, over production – miscalculating needs for rush, contaminated or spoiled products, etc. Having in place an accounting system to track waste items and costs allows management an opportunity to focus on reducing the cause.

  • Proper ordering encompasses: ordering the correct amount of product. The rule of thumb is to have on hand a 9-day supply of every item. This provides a buffer that covers any unexpected surge in business or delivery shortages. This also avoids over-stocking that can lead to spoilage and waste.

  • Proper receiving: This involves management personally checking in deliveries to ensure what is on the invoice is actually received.

  • Proper storage: This involves storing cold items in freezers or coolers; dry goods on proper shelving (off the floor). It also includes properly dating all goods received to ensure proper rotation – FIFO (first in/first out). Chemicals need to be stored away from food. 

2. Staff Awareness - involves interaction with team members.
In this instance, with attention to food: waste, portions, and costs

  • This interaction entails fully involving team members in the process. Regularly letting them know the status of food costs and waste and how their activities impact and ensure achievement of food cost objectives.
3. Training - Includes proper instructions in: food handling, storage, portioning, retraining and follow-up coaching process.
  • Proper training is essential for employees to effectively fulfill the work tasks that are expected to be complete. The more knowledge an employee has about his/her work position, the better that person performs. The better the person performs, the more efficient that person is. Higher efficiency ultimately leads to a boost in productivity.

Recent studies point out that engaged workers are fully absorbed by and enthusiastic about their work. These individuals also take positive action to further the organization’s interest. Not only will informed and properly trained employees assist in controlling food costs, they tend to become engaged employees who stay longer with the company; thus solving an employment issue as well.

Utilizing these practices will provide you with other benefits, beyond controlling costs of food. You will also engage employees in the process, improving their productivity and roles within the company. 

Learn how to reduce your food costs with Spark Analytics. Our solution provides owner/operators with added visibility into inventory, employee efficiency and food costs. Learn more today.

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