IFWA 1217 Food Production and Planning

1. IFWA 1217Food Production and Planning Virginia Stipp Lawrence, MHM

2. Welcome! • Today’s Notes • Cost Control • Standardized Recipes (introduction)

3. Cost Control - • Calculate Actual Cost; Convert to Cost % • Compare Actual Cost % To: • Industry Average % • Previous Actual Cost % (Past Income Statements) • Operating Budget (Estimated Cost %) • Specific Standard For Your Company • Specific Standard For Your Property

4. Variance From The Standard • First Decide If The Variance Is Significant • Is Standard Cost Greater Than Actual Cost? • Is Actual Cost Greater Than Standard Cost? • What Is The Percentage Variance? • What Is The Dollar Variance? • How Much Of A Variance Is Acceptable To Your Company?

5. Why Is There A Significant Variance? • There Are Many Possible Explanations • The Problem(s) Can Usually Be Traced To: • Arithmetic Error (Sales Revenue Or Costs) • Unexpected Waste • Incorrect Portioning • Purchases Are Off-Spec. • Improper Storage • Stealing

6. Correcting The Variance • How Much Time/Effort Do You Want To Spend? • How Important Is The Problem? • How Specialized Is The Problem? • Are You Sure You’ve Isolated The Right Problem? • Is The Corrective Action Easy To Track?

7. Correcting The Variance • How Much Time/Effort Do You Want To Spend? • How Important Is The Problem? • How Specialized Is The Problem? • Are You Sure You’ve Isolated The Right Problem? • Is The Corrective Action Easy To Track?

8. Management Objectives to Control • Sales Revenue • Profit • Cost Restrictions • Growth • Guest Satisfaction • Employee Satisfaction • Other Constituencies’ Satisfaction • Obligations to the Industry • Obligations to the Community

9. The Control Process • Establish Standards: Cost, Quality • Determine Actual Results • Compare Standards To Actual Results • Determine If there Is A Significant Variance • Corrective Action • Revise Standards If Necessary

10. The Effective Control Process • Measurable, Objective Standards • Meaningful, Realistic Standards • Provides Feedback • Accurate • Timely • Consistent • Tracks The Right Things • Tracks The Most Important Things • Cost Effective • Practical And Appropriate For The Type Of Operation • Flexible • Provides Specific Information • Establishes Authority And Responsibility

11. Cost Control – and Menu Planning • Menu Planning Is The First Control Point In The Restaurant Operation • Other Control Points Are: • Purchasing • Receiving • Storing • Issuing • Preparing • Cooking • Holding • Serving • Guest Interaction, E.G., Cash Collection; Customer Satisfaction; Etc.

12. Major Factors Affecting Menu Planning • Layout And Design Of The Facilities • Availability Of Food And Beverage Ingredients • Type Of Equipment • Labor • Budget • Customer Needs And Desires/Trends

13. Types Of Menus • Day Part Menus (Meal Part) • Cycle Menus • Drink Lists • Dessert Menus • Daily Menus • A La Carte Menus • Fixed Price Menus • Down-Time Menus • Casual Menus • Table Top Displays • Catering Menus • Room Service Menus • Café Menus • Interactive Menus

14. Truth In Menu: Misrepresentations That Should Be Avoided: • Quantity • Quality • Price • Brand Name • Product Identification • Point Of Origin • Merchandising Terms • Means Of Preservation • Means Of Preparation • Illustrations/Graphics • Nutrition

15. Food Production and Planning April 10,2006 Objectives for Today 1. Review Menu Pricing Methods 2. Review Controls Standards 3. Review Standardized Recipe Concepts 4. Complete Standardized Recipe handout Reminders Homework 4 is due next week

16. Menu Pricing • Subjective Methods • Reasonable Price (Usually Copying the Competition’s Prices) • Highest Price • Loss Leader • Lost Leader (delete) • Intuitive (Trial And Error)

17. Objective Method Used To Price The Regular Restaurant Menus - “Multiple” Method • Cost Out Menu Items -- use ingredients method, prime ingredient method, or mark-up + method • Ingredient Method= each ingredient is costed & added together • Prime Ingredient Method=The formula is to add the cost of labor and cost of food, add a percentage for profit. This method is good for dishes that require a lot of preparation. • Mark Up Method=each ingredient has food cost percentage added to it or cost is just multiplied by three (factor method) not including labor or other costs • Multiply Cost By 3 to 7 • Check Out The Competition • Adjust Multiple, If Necessary • Do Menu Engineering Analysis • Adjust Multiple Again, If Necessary

18. Objective Method Used To Price Catering Menus - “Thirds” Method • 1/3 Cost Of Food, Beverage, Other Supplies • 1/3 Cost Of Labor, Overhead • 1/3 Profit • Aggravation Factor? • Shoulder Periods/Down Time?

19. Objective Method Used To Price Catering Menus - “Contribution Margin” Method • Calculate Average CM Needed, Per Guest (This is equal to all expenses -- except F&B -- plus net profit, per guest) • Calculate Cost Of Food And Beverage, Per Guest • Add Together To Determine Price, Per Guest

20. Other Pricing Procedures • Pricing Food And Beverage Daily Specials • Pricing All-You-Can-Eat (Drink) Items • Pricing Merchandise • Pricing Sales Promotions • Corkage Fees-bringing in your own bottle • Pricing Entertainment • Pricing Take-Out, Delivery Items

21. Purchasing and Controls • Security Problems In Purchasing • Kickbacks • Fictitious Suppliers • Unintentional/Intentional Errors • Off-Spec Products • Getting Proper Credit • Other Buyer Dishonesty • Receiving Wrong Products

22. Receiving Controls • Compare Shipment To Copy Of Purchase (Order) Record • Compare To Copy Of Invoice • Check Quality • Check Quantity • Check Expiration Dates • Spot Check AP Prices • If Shipment Acceptable, Sign Invoice, Keep Copy • If Unacceptable, Return And/Or Get Credit Slip • Move “Directs” To Production • Move “Stores” To Warehouse For Later Issue • Update Inventory File in Computer • Update AP Prices in Computer • Update Bar Codes in Computer • Complete Necessary Paperwork • Send Paperwork To Office • Keep back Up Files/Paperwork • Security Problems In Receiving • Off-Spec Products • Expired Products • Wrong Products • Short Counts • Theft/Pilferage • Spoilage • Wrong AP Prices

23. Storage Controls • Determine Which Items To Track (ABCD) • Separate “Directs” From “Stores” • Determine Which Areas/Items Require Tight Controls • Limited Access • Proper Locking System • Practice FIFO Inventory Rotation • Controlled Temperature/Humidity • Follow Health District Guidelines To Avoid Spoilage/Quality Deterioration • Arrange Inventory Conveniently

24. Maintaining Cost And Quality • Specifications • Recipes • Portion Costs • Yields • Portion Sizes • Glass Sizes • Ice Sizes

25. Other Production Controls • Track Expensive Issues And Directs • Keep Training Up-To-Date • Watch Waste (Paper Products, Linen) • Watch Over-Portioning • Make Sure To Use Correct Qualities • Use EDR, Not Eating-On-The-Job • Match Issues With Sales And Mistakes • Watch Crossover Problems On Prep Lines When Planning Menus • Have Appropriate Equipment/Tools • Try To Use Leftovers • Lock Up In-Process Inventory When Closed (Especially At the Bars) • Try To Hire The Correct Personalities

26. Serving Controls • Service Is Affected by: • Type Of Menu • Type Of Production • Style Of Service Required • Layout And Design • Communication Flow • Degree Of Cooperation

27. Service Control Factors • Timing Of Service • Accuracy • Up$elling, Suggestive Selling, Consultative Selling • Keep It As Simple As possible • Stock Side Stands Adequately • Maintain High Seat T/O • Track Expensive Foods/Beverages Served • You Must Have An Expediter • (A Food Checker Is Uncommon These Days) • Allocate Stations Appropriately • Determine Optimal Station Size • Determine Optimal Tip/Tip-Out/Auto-Grad. Systems • Get The Right Computer System

28. Computerized Service Systems • At Very Least, You Need An ECR • Preferably You Will Have A POS System, With Touch Screen Capability And As Much Flexibility As You Need And Can Afford • Make Sure The System Is Correct, That It Meets Your Needs

29. Standardized Recipes

30. Food Production and Planning Standardized Recipes

31. Goals and the Standard Cost Standard costs are one of the most important control tools within F & B operations. The standard cost • ·        that you establish, defines the expected cost.   • ·        acts as a goal.  You can establish standards for: • ·        the operation as a whole   • ·        each individual profit(cost) center • ·        foods alone   • ·        beverages alone   • ·        each meal period   • ·        each particular menu   • ·        each food group on the menu   • ·        each specific menu item The more specific your information (your standard) is: • ·        the more useful for control purposes.   • ·        the more timely and costly to develop, maintain and use.

32. Control Tools First create the menu. • **Based on the menu • there are 5 (five) control tools to use in determining standard food and beverage costs: The Five Control Tools: • 1. Standard Purchase Specifications • 2. Standard Recipes • 3. Standard Yields • 4. Standard Portion Size • 5. Standard Portion Costs

33. Review-What is a Standardized Recipe? • is a detailed formula for producing each menu item, food and beverage. you need precise records of: • a) ingredients • b) amounts • c) procedures. A standardized recipe is a customized recipe developed by a particular establishment describing exactly how they want a dish to be prepared, including specifications of the necessary tools and equipment, the time and personnel involved, and ideally a picture of the item as desired for service.

34. The standardized recipe • should include all relevant information right down to the garnish (if any), plate size and plate presentation. A recipe out of a cook book is NOT a standardized recipe, because • . . . equipment varies from place to place. • identical equipment performs differently from place to place. • utensil availability may vary. • interpretations required: "golden brown", "moderate heat", "cook until done” • raw food products (ingredients) may vary in terms of "types", • flavor, size, and availability.

35. Developing a standardized recipe: 12 steps: • 1 A) Talk through the process with the preparers (cooks, bartenders) as you observe and take detailed notes. • 1 B) Find a recipe that you would like to use (existing files, food magazine, mothers files . . .) • 2)Check if you have the necessary tools and equipment, i.e., is it at all feasible for you to prepare, or do new purchases have to be made? • 3) Cost it out: • -is it feasible for your market? • -is it worthwhile to produce, i.e., is it profitable. • -loss leader? • 4)Try it out in its original format. • Is it OK? • Evaluate: Appearance, tenderness, texture, flavor, overall quality . . . • 5)Convert the recipe to your standard size, specifying portion size,yield and number of portions. • 6)"You" make the converted recipe. • Evaluate again: does it still have the desired quality characteristics? Some recipes do not work well in large • quantity,

36. 7) Make any desired or necessary changes. • 8) Make the batch/converted recipe at minimum 3 times: • is it consistent? • are the flavors and other characteristics the same? • is it functional to produce in this size? • 9)Put into your standardized recipe format. • 10) Have your preparation employees prepare (recreate) it according to the standard format. • Evaluate, adjust, change/clarify directions. • 11) Train your preparation staff. • 12) File and/or start using. • Keep records of • ·        popularity • ·        reproducibility • ·        acceptability.

37. Standardized Recipe- • Pecos Chicken Salad