How to Make a Menu Change To Lower Cost? Considerations for Doing it Thoughtfully and Profitably
Rising food costs and uncertainty in the foodservice supply chain has many restaurant operators looking for ways to save money, while maintaining quality, without having to raise menu prices. It’s an ongoing tightrope walk which has recently been escalated due to talks of tariffs, weather events and economic volatility.
According to the National Restaurant Association, menu prices rose 0.4% in February, against a 0.2% increase in food prices, adding to a 3.7% increase over the past year. In some cases, it’s unavoidable but there are options to consider and explore in advance.
For many it means switching out products for a new manufacturer. But that can be a tough decision to make, especially for specialty menu items. The very things many restaurants are known for and helps keep customers coming back.
That’s the situation Mr. Brew’s Taphouse faced. A 12-unit franchise with locations in Wisconsin, Kansas, Kentucky, Arizona, and Tennessee, Mr. Brews prides itself on excellent craft beer and gourmet burgers made with freshly ground meat. That freshly ground meat is topped by soft brioche buns which is a crucial ingredient in a good-tasting burger. And while saving even a little can add up for a company that goes through roughly 4,000 cases of buns a year, any loss in quality and taste could render those savings moot. So any solution couldn’t be based on price alone.
Understanding that changing anything on a menu, including prices, needs to be done thoughtfully and methodically, for those considering making a modification, particularly to one of their specialty items, there’s a few things to consider in advance.
Be willing to consider a change
This may be the hardest part and justifiably so. It’s one thing to switch out where you get your napkins or the lime wedges you use behind the bar. It’s a much bigger decision to change a signature ingredient or menu item. But it’s always a good idea, irrespective of the current climate, to at least consider alternatives that may be available. Especially if they can be found at a better price.
Consider all of the pricing variables
Pricing for restaurant items goes far beyond simply the amount of dollars and sense it costs to buy a case. Are there additional savings that can be found by purchasing a specific volume? Would you find even more savings by partnering with a company that negotiates even better volume pricing based on the purchasing power of multiple brands? What kinds of rebates are available to you?
Make sure there’s enough to go around
It’s one thing to know that the product is available from your distributor. It’s another to confirm that they can get the amount of product you need from the manufacturer to ensure there are no hiccups in the supply chain. This is especially important today. Most operators have long-time relationships with distributors and have an idea of what to expect. So due diligence in advance of any change needs to take place.
It’s about what goes on the plate
Mr. Brew’s Taphouse had more than 50 options for new brioche buns when we worked with them on this project. We helped them narrow down to a handful of choices prior to the next step which is imperative. A taste test with as many stakeholders as possible. Try it out with several chefs at multiple locations and encourage them to be brutally honest with their opinion. Having buy-in from the back of house is so important for the change to be effective. If there’s negative reactions, despite it possibly making the best financial sense, listen to those opinions as they’ll probably match those of your guests.
Clearly, we’re facing a great deal of volatility in our industry right now. From food products to disposables, operators are having to dig in and make some hard choices. But hard choices shouldn’t be driven by panic or uncertainty. And with specialty items that may set operators apart, this is even more crucial.
In the case of Mr. Brew’s Taphouse, the decision to change their brioche bun resulted in a savings of roughly $9,000 a year. That alone might not be a make-or-break number. But when that same strategy was folded into other purchases their cumulative savings was $250,000 a year. So when approaching purchasing issues systematically, with a clear set of goals and parameters, you’ll be in a much better position to make the decisions that work best for both you and your guests.
Chelsea Perrault is the Senior Client Manager, Channel Sales for the Waltham, MA-based Consolidated Concepts. As a Buyers Edge Platform brand, they optimize the foodservice supply chain and provide savings and solutions for multi-unit restaurants and their partners. https://consolidatedconcepts.net/
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