The Main Principles of Menu Engineering
What Is Menu Engineering and What Is The Importance
Menu engineering takes into account the psychology of how menu items are arranged, priced, and presented. Planning a restaurant men involves factoring in item profitability. It's important make sure the most profitable menu items are featured prominently during menu engineering. The decision making needs to factor in everything from menu pages to whether dollar signs should be used for menu pricing.
The two main elements of menu engineering are demand and margin. They help determine if the pricing of the items sold with return a high profit or if they will need to be adjusted. Monitoring menu performance allows an informed decision about profit popularity.
Using an automation process will retrieve accurate data that analyzes the margin contribution of each menu item and its corresponding success rate. For example, when menu items have high margins they can become the focus of promotions which will generate a profitable menu.
In restaurant management, having a solid understanding of menu engineering is the key to long term success in a highly competitive field. With more customers turning to online orders, having the menu prices set for high profitability is more important than ever.
Menu engineering blends together elements of art, science and psychology to focus on achieving a profitable menu that increases profits. Learning how to manage the data of menu engineering is an important factor of restaurants success.
What Are The Principles of Menu Engineering
To build a profitable menu, you need the right data. Food manufacturing costs, item market price, and popularity of the item will all determine its success rate on the menu. This data will be invaluable for menu engineering.
Menu Costing
The menu engineering process starts with menu costing. This means every item on the menu is broken down to the ingredients list and the cost to create each dish is assessed. Knowing exactly how much a menu item costs to create is important to the menu engineering process. Having the menu costs down to the exact penny will create a better level of profitability when menu engineering.
Doing the menu costing process manually will take time as the cost of each ingredient in the menu dishes will need to be included. Restaurant automation software can calculate the costs in a fraction of the time. Either a POS system will calculate the food cost or accounting software used for inventory management can do the calculations of menu items. By using an automated system to track food costs, it will reduce food waste while optimizing the use of each food item.
From there, the software will add the food cost percentage to the cost of ingredients and the sum will equal the food cost. Labor costs will not be included in the calculations for the menu item.
The primary data collected from each sales transaction will show how many times a menu item sold and at what price point is revenue high. Tracking data over a specific time period will provide better information. The date range used should be consistent every time as the ingredients are the determining factor to high profitability for a menu item.
Maintaining consistent data on menu items will highlight which are the most and least profitable products. It also provides insight into the profit margins. Knowing this information gives room to be creative when menu engineering is begun. Interesting guests in the profitable menu items is challenging but not impossible. Understanding the menu engineering process is a good place to start.
Key Takeaways:
Conclusion of Menu Engineering
- Restaurant management includes knowing how to identify profitable items on the menu to increase sales.
- Menu engineering will identify popular items as the contribution of each menu item is reflected against the bottom line.
- Menu analysis combined with inventory management can increase profitability.