by Restaurant Consultant
I am not a vegetarian because I love animals; I am a vegetarian because I hate plants.
While being interviewed recently for a podcast, menu engineering came up as a subject. The interviewer found a graphic on my blog that I created in order to visually explain what I intend to do should you hire me to do some menu engineering for your fine dining French Bistro. During the interview I (Morpheus) and the interviewer (Neo) soon realized that you can’t be told what the Matrix is, (although my graphic was in fact a matrix) you have to be shown. Thus we now swallow the red pill and follow the rabbit down the hole to Wonderland.
In general, the term menu engineering is used within the hospitality industry (specifically in the context of restaurants), but can be applied to any industry that displays a list of product or service offerings for consumer choice. Typically the goal with menu engineering is to maximize a firm’s profitability by subconsciously encouraging customers to buy what you want them to buy, and discouraging purchase of items you don’t want them to buy. (Thank you Wikipedia) You will also use menu engineering to tweak menu offerings in order to sell more by decreasing prices, tweaking ingredient amounts or be more profitable by increasing prices.
- Stars: Stars are extremely popular and have a high contribution margin. Ideally Stars should be your flagship or signature menu items. Suffice to say don’t touch it, its not broken!
- Plow Horse or Workhorse: Plow Horses are high in popularity but low in contribution margin. Plow horse menu items sell well, but don’t significantly increase revenue. Here some engineering can come into play. You could increase the price but risk your plow horse becoming a dog or you could look at portion sizes and costing in order to maximize the contribution margin of these items.
- Puzzles: Puzzles are generally low in popularity and high in contribution margin. Puzzle dishes are difficult to sell but have a high profit margin. Some more engineering is in order here. Move the item on the menu to a more prominent position, either the first or last line. Perhaps change the name of the dish and its description. Honey glazed “Cochon Museau” sounds much better on the ear and the taste buds than Honey glazed Pigs Snout.
- Dogs: Dogs are low in popularity and low in contribution margin. They are difficult to sell and produce little profit when they do sell. Do you really need these items? Don’t feel nostalgic because your deceased granny enjoyed it, chop these items ASAP!
How To Go About Engineering Your Menu.
- You will have to do a detailed costing on every menu item that you sell first. (See fig. below)
- Next you must consult the oracle. Yes, the all knowing Point Of Sale system will have handy PLU sales history that will be very helpful.
- Once you have your sales history, costings and have calculated contribution margins group the items into:
- STARS – PLOW HORSES-PUZZLES -DOGS
- PLOW HORSES: Adjust these items a bit by either adjusting the portion spec, ingredient cost or increasing the price. These items are often items that are available in every store and your customers will have a threshold as to what they are willing to pay, so tread lightly.
- STARS: As the old saying goes: If it isn’t broken don’t fix it!
- PUZZLES: Rename, move to another area on your menu or actively promote on a table talker or your social media networks.
- DOGS: You know what to with a rabid dog? You put it down! These items might just increase your stock holding and when somebody finally does order the East Patagonian Hamster Giblets they are most definitely going to be expired….