MENU PLANNING

From design to evaluation

1
 Rationale

Everything starts with the menu. The menu

dictates much about how your operation will
be organized and managed, the extent to
which it meet its goals, and even how the
building itself - certainly the interior - should
be designed and constructed.

2
 Objectives

 To explain the importance of a menu

 To explain the basic rules of menu planning
 To identify factors to be considered when
planning a menu
 To identify constraints in menu planning
 To plan and write a menu

3
 Must Satisfy Guest Expectations

 Reflect your guests’ tastes

 Reflect your guests’ food preferences
 Ascertain your guests’ needs

4
Must attain Marketing Objectives

 Locations
 Times
 Prices
 Quality
 Specific food items

5
 Must help to achieve
Quality Objectives
 Quality standards:
flavor, texture, color, shape, flair,
consistency, palatability, visual appeal,
aromatic apparel, temperature
 Nutritional concerns:
low-fat, high-fiber diets, vegetarian

6
 Must be Cost-Effective

 Commercial
financial restraints
profit objectives
 Institutional
minimizing costs
operational budget

7
 Must be Accurate

 Truth-in-menu laws exist in some localities,

cannot mislabel a product
 “butter” must use butter not margarine
 “fresh” must be fresh, not fresh frozen
 “homemade” not purchased “ready-to-heat”
 “USDA Choice” actually “USDA Good”

8
Menu Planning Constraints

9
 Facility Layout/Design
and Equipment
 Space
 Equipment available
 Work flow
 Efficiency

10
 Available Labor

 Number of Employees
 Required Skills
 Training Programs

11
 Ingredients

 Standard recipe
 Availability of the
ingredients required
during the life span of
the menu
 Seasonal ingredients
 Cost
 Miscellaneous cost
(flight charges, storage)
12
 Marketing Implications

 Social needs
 Physiological needs
 Type of service
(fast food, leisure dinning)
 Festival
 Nutrition

13
 Quality Levels and Costs

 Guests’ expectation
 Employees’ skills and knowledge
 Availability of equipment
 Specific ingredients
 Food costs and selling prices

14
 The Menu and
the Food Service Operation

15
 The Menu Helps to Determine
Staff Needs
 Variety and complexity increases, number of
personnel increases
 Production staff
 Service staff
 Back-of-house staff

16
 The Menu Dictates Production
and Service Equipment Needs

Tableside service
 carving utensils, trolleys,
gueridon, salad bowls,
suzette pans, souffle dishes,
soup tureens, large wooden
salad bowl, rechaud, Voiture
(heated cart for serving
roasts) and ......

17
 The Menu Dictates Dining Space

 A take-out sandwich or pizza operation would require no

dining space and the amount of square feet required per
person would be minimal.
 On the other hand, if a restaurant offers a huge salad buffet,
dessert selection or an after-dinner trolley, wide aisles
would be needed to allow guests ease of movement and
moving of equipment.

18
 Purchase Specifications May
Be Dictated By The Menu
 If the menu offers such items as USDA Choice New York
strip steaks, quarter-pound lean beef burgers, grade AA
eggs, freshly squeezed Florida orange juice, or vine-
ripened tomatoes, back -of-house procedures will not only
include receiving, storing, issuing, and producing the
menu items but also purchasing the specific products
described. (When such factors as grade and portion size
are not dictated by the menu, managers and chefs must
determine purchase specifications and related quality
factors.)

19
 How and When Items
Must Be Prepared
 To stimulate guest interest, the menu planner may
offer a dish prepared in a variety of ways:
 Cooking methods
 Poached, broiled, batter-dipped, deep fried
 The finished product must be prepared using the
method indicated on the menu
 Small quantities cooking (a la carte)
 Batch cooking

20
 The Menu is a Factor in the Development
of Cost Control Procedures

 As the menu requires more expensive food

items and more extensive labor or capital
(equipment) needs, the property’s overall
expenses and the procedures to control them
will reflect these increased cost.

21
 The Menu and the Service Plan

 Type and size of dinnerware

 Types of flatware
 Garnishes (place be service or production staff)
 Timing requirement for ordering
 Additional dining service supplies to serve the item
 Special serving produces
 Special information (doneness of the steaks, over
easy or sunny side eggs, etc.)

22
 Menu Design

 First impression is always important, the entire menu

should complement the operation
- Theme
- Interior Decor
- Design (Merchandising)
- Creativity
- Material
- Color
- Space

23
 Menu Design

- Type style and/or lettering

- Names of food items
- Description
- Popular items are at the top of a list
- Clip-ons, inserts (daily specials)
- Operations address
- Beverage service notice
- Separate menus for each meal period
- Separate menu for host/hostess and guests

24
 Menu Styles

 A table d'hôte (a complete meal for one price)

 A la Carte (items are listed and priced separately)
 Combination (combination of the table d'hôte and a
la carte pricing styles)
 Fixed menus: a single menus for several months
 Cycle menus: designed to provide variety for guests
who eat at an operation frequently - or even daily

25
 Types Of Menus

 Breakfast
(offers fruits, juices, eggs, cereals, pancakes, waffles,
and breakfast meats)
 Lunch
(features sandwiches, soups, salads, specials; usually
lighter than dinner menu items)
 Dinner
(more elaborate, steaks, roasts, chicken, sea food and
pasta; wines, cocktails, etc..)

26
 Types Of Menus - Specialty

 Children’s
 Senior citizens’
 Alcoholic beverage
 Dessert
 Room service
 Take-out
 Banquet
 California (breakfast, lunch and dinner menu items on one
menu)
 Ethnic

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 Basic Rules Of Menu Planning

 Know your guest  Know your operation

- Food preference - Theme or cuisine
- Price - Equipment
- Age - Personnel
- Quality standards
- Budget

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 Selecting Menu Items

 Menu category:
 Appetizers

 Salads

 Entrees

 Starchitems (potatoes, rice, pasta)

 Vegetables

 Desserts

 Beverages

29
 Common Sources
For Menu Item Recipes
 Old menus
 Books
 Trade magazines
 Cookbooks for the
home market

30
 Menu Balance

 Business balance
- balance between food cost, menu prices,
popularity of items, financial and marketing
considerations
 Aesthetic balance
- colors, textures, flavors of food
 Nutritional balance

31
 Elements Of Menu Copy

 Headings
- Appetizers
- Soups
- Entrees
 Sub-heading
- Under entree:
 Steak, seafood, today’s specials

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 Elements Of Menu Copy

 Descriptive copy (describe the menu items)

- should be believable and made in
short, easy-to-read sentences
- no description is needed for self-
explanatory item. i.e. Low Fat Milk

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 Truth-in-menu

 Grading (foods are graded by size, quality, in line with

official standards)
 “Freshness” (cannot be canned, frozen or fresh-frozen)
 Geographical origin (cannot make false claims about the
origin of a product)
 Preparation (if the menu says baked, it cannot be fried
instead)
 Dietary or nutrition claims (supportable by scientific data)

34
 Supplemental Merchandising
Copy
Includes information such as:
 Address
 Telephone number
 Days and hours of operation
 Meals served
 Reservations and payment policies
 History of the restaurant
 A statement about management’s commitment to guest service

35
 Menu Layout

 Sequence:
 Appetizers, soups, entrees, desserts
 Depends on the operation (side orders, salads,
sandwiches, beverages)
 Depends on popularity and profitability
 Placement:
 artworks; space; boxes; clip-on; etc.

36
 Menu Layout

Format:
 Menu’s size
 General makeup
Typeface:
 Printed letters
 Font size
 Type face

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 Menu Layout

Artwork:
 Drawings, photographs, decorative patterns,
borders
Paper:
 Texture
Cover:
 Color
 Texture

38
 Common Menu-design
Mistakes
 Menu is too small
 Type is too small
 No descriptive copy
 Every item treated the same
 Some of the operations’ food and beverages are not listed
 Clip-on problems
 Basic information about the property and its policies are not
included
 Blank pages

39
 Evaluating Menus

 Must set standards

 Determine how menu is helping to meet
standards

40
 Menu Evaluation:
Questions Most Often Asked
 Is the menu attractive?
 Do the colors and other design elements match the operation’s
theme and decor?
 Are menu items laid out in an attractive and logical way?
 Is there too much descriptive copy? Not enough? Is the copy
easy to understand?
 Is attention called to the items managers most want to sell,
through placement, color, description, type size, etc.?

41
 Menu Evaluation:
Questions Most Often Asked
 Have guests complained about the menu?
 Have guests said good things about the menu?
 How does the menu compare with the menus of competitors?
 Has the average guest check remained steady or increased?
 Is there enough variety in menu items?
 Are menu items priced correctly?
 Are you selling the right mix of high-profit and low-profit items?

42
 Menu Evaluation:
Questions Most Often Asked
 Is the typeface easy to read and
appropriate to the restaurant’s
theme and decor?
 Is the paper attractive and stain-
resistant?
 Have the menus been easy to
maintain so that guests always
receive a clean, attractive menu?

43
 Menu Pricing

SUBJECTIVE PRICING:
 The reasonable price method: from the guest’s
perspective - what charge is fair and equitable
 The highest price method: sets the highest price that
the manager thinks guests are willing to pay
 The loss leader price method: an unusually low
price is set for an item to attract guests
 The intuitive price method: takes a wild guess,
trial-and-error

44
 Menu Pricing

DESIRED FOOD COST PERCENTAGE PRICING

METHOD:
 manager determines a reasonable food cost percent
 then divides a menu item’s standard food cost by its
reasonable food cost percent

Selling price = $1.50 (item’s standard food cost) = $4.55

0.33 (desired food cost percent)

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 Menu Pricing

PROFIT PRICING:
factors profit requirements and non-food expenses into
menu item selling prices

Allowable = $300,000 - $189,000 - $15,000 = $96.000

food costs (forecasted (non-food (profit
food sales) expenses) requirements)

Budgeted food cost % = $96,000 (allowable food costs) = 0.32 or 32%

$300,000 (forecasted food sales)

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 Menu Pricing

COMPETITION AND PRICING:

 Know competitor’s menus, selling prices, and guest
preferences
 Lower your prices
 Raise your prices
 Elasticity of demand:
Elastic: price change creates a larger % in the quantity
demanded (prices-sensitive)
Inelastic: the % change in quantity demanded is less than
the % change in price

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The Menu:The Foundation For Control
GUEST SATISFACTION BASIC OPERATING ACTIVITIES:
CONTROL POINTS

SERVING MENU PLANNING

HOLDING PURCHASING

COOKING RECEIVING

PREPARING STORING
PRODUCTION ACTIVITIES

ISSUING
48
 The Menu Influences
 Product Control Procedures
every item on the menu represents a product to be controlled
 Cost Control Procedures
careful cost control procedures must be followed,
particularly when expensive products and labor-intensive
service styles are used
 Production Requirement
product quality, staff productivity and skills, timing and
scheduling, and other back-of-the-house functions are all
dictated by the menu
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 The Menu Influences

 Equipment Needs
equipment must be available to prepare products required by the menu
 Sanitation Management
 management must consider menu items in light of possible sanitation
hazards
 Layout and Space Requirements
the physical space within which food production and service take place
- must be adequate for purchasing, receiving, storing, issuing,
producing, and serving every item on the menu

50
 The Menu Influences

 Staffing Needs
as menu becomes more complex, greater demands may be
placed upon the staff
 Service Requirements
the menu affects the skill levels required for service
personnel, along with equipment, inventory, and facilities
needed in the front of the house
 Sales Income Control Procedures
elaborate menus require more stringent controls than simple
menus

51
 Menu Planning
is also.. A Tool for:

 Sales
lists the items an operation is offering for sale
 Advertising
communicates a property’s food and beverage marketing
plans
 Merchandising
target market expectations - products, service, ambience
(theme and atmosphere), perceived value
 Marketing Tool
strive to meet or exceed the expectations of its target market

52
 Priority Concerns Of
The Menu Planner
Priority Concerns of menu Planner

Wants and needs Guest

Concept of Value Quality of Item Flavour

Item Price Consistency

Cost

Object of Property Visit Availability Texture/Form/Shape

Socio-Economic Factors Peak Volume Production Nutritional Content

and Operating Concerns

Demographic Concerns Visual Appeal

Sanitation Concerns
Ethnic Factors
Aromatic Appeal
Layout Concerns

Religious Factors Temperature

Equipment Concerns

53
 Menu Planning Strategies
 Rationalization
its objective is simplification for the sake of operational
efficiency
i.e., cross-utilization menu items use the same raw
ingredients
- Menu when carefully plan can be a streamlining of the
purchasing, receiving, storing, issuing, production, and
serving control points.
- High-quality convenience foods make it easier to offer new
items without having to buy additional raw ingredients

54
 Factors That Influence Menu
Planning Strategies
 Needs and wants of target markets
 Several items from same ingredients
 Storage requirements
 Personnel skill levels
 Product availability / seasonality
 Quality and price stability
 Sanitation procedures

55
 External Factors
That Influence Menu Changes
 Consumer Demands
decide which potential markets wants to attract
 Economic Conditions
cost of ingredients, potential profitability of new menu items
 Competition
many not want to serve next door’s best
 Supply Levels
seasonal items, price to the quality and quantity
 Industry Trends
industry’s response to new demands
56
 Internal Factors
That Influence Menu Changes
 Facility Meal Patterns
existing meal periods - breakfast, lunch and dinner
 Concept and Theme
the image may rule out certain foods that do not
blend with its theme and decor
 Operational System
costs for new equipment to the successful
production and service of new menu items

57
 Pricing Approaches

 Subjective Price Methods

intuition and knowing your guests (failed to relate
profit and costs)
 The Reasonable Price Methods
presumes value to the guest (what charge is fair and
equitable)
 The Highest Price Method
sets the highest price the guests are willing to pay

58
 Pricing Approaches

 The Loss Leader Method

an unusually low price is set for an item (or items)
to bring guests in
 The Intuitive Price Method
wild guess about the selling price
(pricing methods based on assumptions, hunches
and guesses)

59
 Pricing Approaches

 Simple Mark-up Pricing Methods

designed to cover all costs and to yield the desired
profit.
Three Steps:
1. Determine the ingredients’ costs

2. Determine the multiplier

3. Establish a base selling price

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 Multiplier

If food cost is to be 40%

Multiplier = 1 / desired food cost%

= 1 / .40

= 2.5

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 Base Selling Price

If ingredient cost is $3.32

Base Selling Price = Ingredient Cost x Multiplier

$8.30 = $3.32 x 2.5

A base selling price in not necessarily the final selling price

62
 Prime-Ingredient
Mark-Up Method

Base selling price = Prime Ingredient Cost x Multiplier

$8.30 = $1.59 x 5.22

or food cost is about 19%

63
 Mark-Up with
Accompaniment Costs
Entree / Primary Costs $3.15

Plate Cost +$1.25

Food Cost $4.40

Mark-Up Multiplier x 3.3 (30% food cost)

Base Selling Price $14.52

64
 Determining the Price Multiplier

Based upon:
 experience or “rule of thumb”
 contribution margin
 impact of sales mix
 does not reflect higher or lower labor cost
 assume food cost associated with producing menu
item are know

65
 Contribution Margin
Pricing Method
Contribution Margin refers to the amount left after a menu
item’s food cost is subtracted from its selling price.
Two steps in setting base selling price:
1. Determine the average contribution margin
required per guest
Non-Food + Required Profit = Ave. Contribution Margin Required/guest
No. of Expected guests

$295,000 + $24,000 = $3.75

85,000

66
 Contribution Margin
Pricing Method
2. Determine the base selling price for a menu item

Base selling price = average contribution margin + Standard food cost

$7.35 = $3.75 + $3.60

67
 Ratio Pricing Method

The ratio pricing method determines the relationship between food

costs and all non-food costs plus profit requirements and uses
this ratio to develop base selling price for menu items.
Three steps
1. Determine the ratio of food costs to all other cost plus profit
requirements
All non-food costs + Required profit = Ratio
Food costs

$160,000 + $21,000 = 1.34

$135,000

68
 Ratio Pricing Method

2. Calculate the amount of non-food cost and profit

required for a menu item
Non-food cost and profit required = Standard food cost x ratio
$5.03 = $3.75 x 1.34

3. Determine the base selling price for the menu item

Base Selling Price = Non-food cost and profit required + Standard food
cost
$8.78 = $5.03 + $3.75

69
 Simple Prime Costs Method

The term prime cost refers to the most significant costs in a

food service operation: food, beverage and labor.
A simple prime costs pricing method involves assessing the
labor costs for the food service operation and factoring
these costs into the pricing equation.
Three steps:
1. Determine the labor costs per guest
Labour Cost per guest = Labour costs / No. of expected guests
$2.80 = $210,000 / 75,000

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 Simple Prime Costs Method

2. Determine the prime costs per guest

Prime Cost per guest = Labour cost per guest + menu item’s food cost

$6.55 = $2.80 + $3.75

3. Determine base selling price

Base Selling Price = Prime costs Per guest

Desired Prime Costs%

$10.56 = $6.55 / 0.62

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 Specific Prime Cost Method

Specific Prime Cost Method - develops mark-ups for menu

items so that the base selling prices for the items cover
their fair share of labor costs.
 Divide the menu items into 2 categories:
(A) extensive preparation
(B) non extensive preparation
 clean up, and other non-preparation activities

72
 Specific Prime Cost Method

 Allocates appropriate % of total food costs and labor costs

to each category
(A) 60% of the total food cost
(B) 40% of the total food cost
(A) & (B) 55% of all labor costs
45% of all labor costs is incurred for service,

73
 Specific Prime Cost Method -
Calculations
 Operating Category A Category B
Budget Item Budget % (extensive preparation) (Non-extensive
Preparation)
(1) (2) (3) (4)
 Items Items
Food Cost35% 60% of 35% = 21% 40% of 35% = 14%

Labour Cost 30% 55% of 30% = 17% 40% of 13% = 5%

All Other Cost 20% 60% of 13% = 8% 40% of 20% = 8%

Profit 15% 60% of 15% = 9% 40% of 15% = 6%

Total 100% 67% 33%

Mark-Up 100% =2.9% 67% = 3.2 33% = 2.4

Multiplier 35% 21% 14%

74
 Important Pricing Considerations
 The Concept of Value (price relative to quality)

 The Basic Law of Supply and Demand

 Volume Concerns Must be Considered

 Price Charged by the Competition for a similar Product

75
 Evaluating The Menu:
Menu Engineering
Basic Menu Engineering Process:

 Stars - items that are popular profitable

 Plowhorses - items that are not profitable but popular

 Puzzles - items that are profitable but no popular

 Dogs - items that are neither profitable nor popular

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 Defining Profitability

 Contribution Margin

a “high” contribution margin for an individual

menu item would be one that is equal to or greater
than the average contribution margin

Average Contribution Margin = Total Contribution Margin

Total Number of Item Sold

77
 Defining Popularity
Popular Index bases upon the notion of “expected popularity”
For example:
4 items on a menu and each is assumed to be equally popular, the sales of
each would be expected to be 25%
100% ÷ 4 = 25%
Menu engineering assumes that an item is popular if its sales equal 70% of
what is expected..
For example:
a food item is considered popular if its sales is:
25% x 70% = 17.5% of total sales

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 Menu Engineering Worksheet
M enu Engineering W orksheet
Date:
6/10/00_________________
Restaurant: ____________________________ M eal
Dinner
Period:
(A) (B) (C) (D) (E) (F) (G) (H) (L) (P) (R) (S)
M enu Number M enu Item Item Item M enu M enu M enu Menu
Item Sold M ix Food Selling CM Costs Revenues CM CM M M% Item
Name (M M ) % Cost Price (E - D) (D x B) (E x B) (H - G)Category Category Classific-
ation
Chicken Plow-
Dinner 420 42% $2.21 $4.95 $2.74 $928.20 $2079.00 $1150.80 Low High horse
NY Strip
Steak 360 36% 4.50 8.50 4.00 1,620.00 3,060.00 1,440.00 High High Star
Lobster
Tail 150 15% 4.95 9.50 4.55 742.50 1,425.00 682.50 High Low Puzzle
Tenderloin
Tips 70 7% 4.00 6.45 2.45 280.00 451.50 171.50 Low Low Dog

Column N l J M
Totals 1,000 $3570.70 $7015.50 $3444.80
K=l/J O=M/N Q = (100%/items) (70%)
Additional Computations: 50.9% $3.44 17.5%
(Box K = Food Cost %; Box O = Average Contribution M argin)

79
 Improving The Menu
Managing Plowhorses

Items low in contribution margin, but high in popularity

 Increase prices carefully
 Test for demand
 Relocate the item to a lower profile on the menu
 Shift demand to more desirable items
 Combine with lower cost products
 Assess the direct labor factor
 Consider portion reduction

80
 Improving The Menu
Managing Puzzles
Items high in contribution margin but low in
popular
 Shift demand to these items
 Consider a price decrease
 Add value to the item

81
 Improving The Menu
Managing Stars
Items high in contribution margin and high in
popularity
 Maintain rigid specifications
 Place in a highly visible location on the menu
 Test for selling price inelasticity
 Use suggestive selling techniques

82
 Improving The Menu
Managing Dogs
Items that are low in contribution margin and low
in popularity:

Candidates for removal from the menu

83