Did you know that a properly (from the point of view of design) prepared menu increases the profitability of the restaurant by at least 5–10%—not to mention the positive impressions left by the visitors of this restaurant for the future?
If you work in the hospitality industry, chances are you've come across the term "menu engineering" before. It refers to the process of thoroughly analyzing each item displayed in the menu. Such indicators as the popularity of the position in relation to other positions, the total revenue from the sale of this dish and the profit are taken into account. After that, we plan to leave the position at this location, move it to another location, or remove this position (food, drink) from sale altogether.
As for where the positions are placed, engineering also includes the process of analyzing the overall impression of the menu. To what extent does the layout of the menu have a well-thought-out design, to what extent does it correspond to the concept and atmosphere of the establishment. It is often the first thing visitors notice. And it doesn't matter if it's a paper (plastic) menu or a bar code - it should be remembered that the menu is the first thing from which the visitor draws his conclusion about the establishment.
What is the purpose of menu engineering?
It will allow the owner to maximize profit, indirectly through the sale of those positions that are the most profitable (marginal). And how to influence the guest's choice using the design and placement of items, so that as a result he orders exactly the dishes he needs, and the process we call menu engineering gives the answer.
And the whole "trick" of engineering to, on par with other factors, leave the guest satisfied and encourage them to visit the restaurant again.
Being a component of your P/L management (management, accounting of profit and expenses), menu development also includes the calculation of the food cost of each specific menu item, based on the purchase prices of the ingredients and their waste rates in the process of cleaning, drying, frying.
Using the capabilities of barcodes (browser-based menus), it is now possible to create so-called pop-ups - information with special offers and recommendations that appears on the smartphone screen after a certain period of time that the guest has spent browsing the menu. And in this way, you can manage the remains of semi-finished products, promoting more actively certain items, which, as a result, will lead to a reduction in the wastage of products and thereby to a general reduction in restaurant costs.
The Menu Matrix will allow you to identify the positions that are good for your business and those that need more improvement. For this, it is necessary to prepare the following information for each position sold, say for 1 month:
- Total income from the sale of this item.
- Total costs for preparation of this item.
- Total profit from the realization of this position.
After that, all your items from the menu are displayed on the graph, where the x-axis shows the total profit from the sale of this item, and the y-axis shows the total sales of this item (in pcs., portions etc.)
A schematic example is shown in the graph below.
After you build such a chart, you will be able to intuitively see certain groups of positions on it. And conditionally divide it into 4 quarters:
- Plow Horses (1) - a group of positions from the upper left corner. These are the positions that are very popular with your visitors, but you don't earn very much from these positions.
- Stars (2) - a group of positions in the upper right corner. These are the positions that are quite popular, and you earn quite a lot on them.
- Dogs (3) - a group of positions in the lower left corner - these positions are "candidates for removing from menu". They are not popular and do not bring enough income.
- Puzzles (4) - positions from the lower right corner of the graph - they are highly marginal, but not popular.
What to do with each of these positions?
Dogs - most likely "on departure", or at least they fly out in the versions as they are presented in the menu. If you personally like them, or you believe that they can still serve - try to change their presentations, or menu placement, etc.
Stars - leave as is.
Plow Horses - a field for optimizing costs, changing ingredients, portions, recipes, etc. But you should remember that these are popular dishes among your customers, so every change you plan should be "considered" from the guest's point of view. So that, as a result, the dish moves in the quarter with the stars, and not in other directions.
Puzzles are those positions that are worth working on. One of the options, "price anchoring" is a technique where a cheaper dish is placed right next to an expensive dish. Or placing this dish at the top of the page or screen. As an option - a pop-up window with information about this dish. In printed menus, it can be highlighted in a frame or printed in a different color.
5 simple recommendations in menu development
- Set a time frame. Over time, you will understand what may or may not be achieved in terms of sales volume for each specific position. Estimate what time suits you and be sure to determine the time frame that is necessary to view the result. Remember that a goal without a time frame is just a dream.
- For some items, use a more detailed description. Such a description makes the guest understand that he has the opportunity to order something really valuable. Sometimes the bigger the description, the better for the presentation of the dish. In addition, a larger description - favorably distinguishes the dish from others. However, of course, you should not add a description to such dishes as most side dishes and fairly simple other dishes.
- Make it a rule to constantly review your menu and arrange dishes according to the matrix described above. The reward for constant work on the menu will be your successful business.
- Communicate with guests and focus on your needs. Sometimes the concept of a restaurant or a brand chef may not take into account the peculiarities of the market, location, preferences of the majority of guests. However, this is not surprising. Therefore, you should constantly communicate with the guests and try to direct the menu in the right direction by means of engineering.
- Train your staff on the basics of menu engineering. Often, personnel collect and process large amounts of information during a long period of work. In addition, they are the ones who directly communicate with guests.
If the staff will know the basics of menu engineering and you will develop a good and trusting relationship with them, they will unwittingly help you to improve the menu and make it more attractive. After all, if they do not know the basics of the engineering menu, they will simply ignore and forget a lot of information.