Menu_Engineering (1)

Menu Engineering is the process of using a marketing assessment to help generate additional gross profit from a restaurant’s menu. COMPILED BY RCHS-MUMBAI, 2020

• menu engineering refers to the specific restaurant menu analysis methodology • By using guest demand (also called the menu mix) and gross profit margins, the relative performance of each menu item is determined, and assigned one of the following terms: COMPILED BY RCHS-MUMBAI, 2020



• Stars • Stars are extremely popular and have a high contribution margin. Ideally Stars should be your flagship or signature menu item COMPILED BY RCHS-MUMBAI, 2020

• Plow Horse • Plow Horses are high in popularity but low in contribution margin. Plow horse menu items sell well, but don’t significantly increase revenue. COMPILED BY RCHS-MUMBAI, 2020

• Puzzles • Puzzles are generally low in popularity and higher contributions. Puzzle dishes are very difficult to sell, but are have a high profit margin. COMPILED BY RCHS-MUMBAI, 2020

• Dogs • Dogs are low in popularity and low in contribution margin. Basically they are difficult to sell and when you do they are not all that profitable. • Several variations to this methodology have been developed at hotel and restaurant schools around the country which have had qualified results. COMPILED BY RCHS-MUMBAI, 2020

• doing something/anything to improve menu engineering. In simpler terms I would describe the process as the methodical selecting, costing, pricing and evaluating of your menu items. menu performance”, COMPILED BY RCHS-MUMBAI, 2020

• Menu engineering provides the manager with information about a menu item’s profitability, as well as popularity, so that proactive planning, recipe design and customer pricing decisions can be made. COMPILED BY RCHS-MUMBAI, 2020

• Menu engineering is not a substitute for proper purchasing, food rotation, standard recipes or any of the other basic kitchen controls that can negatively impact your costs. Rather it is a method of evaluating every item on your menu relative to its present contribution to bottom line rupees • , thereby allowing managers to recognize the items they want to sell! COMPILED BY RCHS-MUMBAI, 2020

Contribution Margins • While the concept of food cost percentage (an item’s ingredient cost divided by it’s menu price) is the most commonly used criteria for assessing effective cost controls, the concept of contribution margin (an item’s menu price less it’s food cost) is the basis of menu engineering COMPILED BY RCHS-MUMBAI, 2020

• simple question should make the distinction clear. If you could sell one more item before your restaurant closed today, would it be a fish n chip for Rs200 that costs you Rs 80 or a plate of Masala Dosa for Rs100 that costs you Rs20. While the food cost percentage of the Dosa is 20% versus 40% for the fish n chip, the fish n chip will contribute Rs120 to gross revenue as opposed to Rs80 for the Dosa. I’ll take the Rs120… thank you very much. Contribution margin then is based on the rupees you take to the bank. COMPILED BY RCHS-MUMBAI, 2020

• I’ll take the Rs120… thank you very much. Contribution margin then is based on the rupees you take to the bank. COMPILED BY RCHS-MUMBAI, 2020

Accounting for the Popularity of Menu Items • While a menu item's contribution margin tells us how many rupees each individual sale of the item contributes to the cash register, you need to know how popular the item is to determine the total rupees it contributes to the restaurant’s revenue. COMPILED BY RCHS-MUMBAI, 2020

• A popular item with a high contribution margin is a “star” while an unpopular item with a low contribution margin would fairly be called a “dog”. COMPILED BY RCHS-MUMBAI, 2020

How to Take Action Based on the Results • Let’s start with the obvious. Keep the STARS and dump the DOGS. COMPILED BY RCHS-MUMBAI, 2020

Your creativity is now required dealing effectively with your PUZZLES and PLOWHORSES. • Lets start with the PUZZLES . • These items are profitable but relatively unpopular. Your “challenge” is to make them more popular. There are many ways to accomplish this including changing the preparation (SRLOIN STEAK may be more popular than LAMB CHOPS, but still just as profitable). Re-naming or re-plating the item to make it sound and/or appear more appealing is another alternative. Alternatively you might want to create a whole new menu item using the same “center of the plate” ingredient, but doing it in a way that will be more appealing to your customers. COMPILED BY RCHS-MUMBAI, 2020

PLOWHORSES they are popular items with less than ideal profit margins • Here is where your best opportunities lie. Your job is to re-engineer the menu item to reduce its cost while not sacrificing what makes it popular. This can involve substituting a single relatively expensive ingredient for a one that is less costly (e.g BEKTI in a FISH N CHIPS for Pomfret. It may involve substituting one cut of meat for a less expensive one knowing that the preparation is what makes the item popular. It might be as simple as using a less expensive garnish. How about increasing the items selling price? Your chef’s imagination and talent takes over here. COMPILED BY RCHS-MUMBAI, 2020

• Stars These are the most profitable items on your menu. One should maintain rigid specifications for quality, portion size and presentation. These items should be in a highly visible position on the menu and well be your restaurant's signature items. COMPILED BY RCHS-MUMBAI, 2020

• Plowhorses These items are popular, even though they do not yield a high contribution margin. They are normally items popular with your price-conscious clientele. COMPILED BY RCHS-MUMBAI, 2020

• Puzzles These items are low in popularity yet yield high contribution margins. You may have to consider whether these items should be on your menu at all. COMPILED BY RCHS-MUMBAI, 2012

• Dogs These are your losers - they are both unpopular and yield low contribution margins. These items may have to be eliminated or their price increased to see whether they can at least reach the status of Puzzles. COMPILED BY RCHS-MUMBAI, 2020