Food and beverage costs make up more than 50% of a hotel’s costs. When you consider that F&B costs include food, drinks, employee-related expenses, and utility costs, reducing any of those three will greatly impact your budget.
In this article we will discuss what tips and tactics to apply to your processes so you can keep your food and beverage costs tight, manageable and predictable.
Here we go:
1. Use Smart Technology
Use smart technology to standardize your recipes for food and drinks. It can also be used to actively monitor your inventory, collect sales data on menu offerings, and analyze your food waste.
Restaurant analytics software can give you daily and weekly reports on your food and beverage costs. Using those reports you will be able to make cost-reducing adjustments to it. It may also point out other potential areas of improvement like food supplies orders and employee theft of inventory.
2. Do Your Own Prep Work
If your restaurant orders pre-cut chicken or lettuce, save money and cut it yourself. You can always use the leftover product for a special or create limited time new dishes around them.
Are you paying for sauces to be pre-made for you? Bring it in-house. You may be able to spread the ingredients around to other dishes that you are already preparing in the kitchen and cut costs even more.
Pre-prepared food costs significantly more than the general product. It may take more time to prepare, but if you have the staff there to do it, you should use them.
3. Manage Food Waste
Food waste eats away at your budget and steals your profit. You should know which dishes are being sent back, what food is spilled/dropped on the floor, how much food is being burned in the kitchen, and how much food is lost due to extra portions being thrown away.
When you integrate food analytics software into your operation, you will have insight into how food is being wasted in your kitchen and bar. You can then take action to stop it. Some steps may include training staff to be more careful and mindful of food waste. Also, if certain dishes tend to be sent back a lot, you can reassess them and decide if you want to change them or remove them from your menu.
4. Join A Purchasing Group
If your hotel is not part of a chain, you can still get the F&B discounts they get if you join a purchasing group. Purchasing groups help small and medium-sized restaurants to compete with chains.
The volume of the combined orders of multiple restaurants will give you purchasing power that you can use to negotiate better food pricing and discounts. These kinds of groups will also do well if they have suppliers competitively bid on the services/goods they can supply to the group.
5. Create A Consistent And Profitable Menu
Monitor your menu offerings using restaurant analytics software. Keep track of how often different dishes and drinks are ordered by customers. This information can be used to categorize your dishes into popular, best seller, average, and not preferred. You can also look at how much each dish contributes to your bottom line.
After you have the data, consider whether your best selling and popular dishes may be priced too low. If so, raise the prices. The dishes that are not being ordered a lot may need to be removed from the menu or redesigned so that they are more appealing to your customers.
6. Provide Delivery Menus
You may also choose to expand the services your kitchen offers to the public. If you have really popular dishes that people order for takeaway, consider developing a delivery menu. In short, your kitchen can cater to eat-in customers and take out customers. This kind of operation is called the cloud kitchen business model.
The delivery menu can offer set meal options or you can change them every week based on the changes in your hotel menu. You may also offer specials on food that is going to go bad if you don’t use it.
Need more encouragement? Food prepared for delivery requires less effort from your staff than food consumed in the hotel. So, your staff can generate more revenue and profit for you with about the same level of effort.
7. Standardize Your Food And Drink Recipes
Your food costs may be higher than expected because your staff aren’t preparing the dishes and drinks the same way. To avoid this problem, you can standardize your food and drink menu.
When your staff are preparing the food and drinks, they will have a recipe to work from and there will be less waste. Also, since your food and drinks will be prepared consistently, they will have consistent quality and taste. This consistency will also be useful if you are using or expanding into the cloud kitchen business model.
8. Install Security Cameras
Employee theft is one of the primary causes of high food costs. You need to know if your staff are helping themselves to your inventory, purposely preparing orders incorrectly so that they can eat the food or take it home.
You can greatly reduce employee theft by installing security cameras around the kitchen and food prep area. Employees are less likely to steal if they know that they are being watched. Also, you are more likely to catch thieves with well-placed cameras and be able to remove them from your operation.
9. Cross-Train Your Staff
Staff costs make up at least 50% of a hotel’s F&B budget. If you cross-train your staff, you will be able to use them more efficiently during their working hours because they can work in food or beverage, or they can do different jobs in the kitchen.
Cross-training your staff will also enable you to optimize their schedules and run a more efficient and profitable operation.
The best way to reduce your F&B costs is to use smart technology to identify the places where you are losing money and where you can make more money. You can also expand your operation without compromising the hotel F&B operation by offering a delivery menu.
Streamlining your operation will help to fatten your profit margins. The savings can be used to further tighten up your operations or to develop other streams of income that bolster it.
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Aida Grigoryan is a content writer and content marketer who writes on SaaS and eCommerce marketing. She has contributed to 30+ publications with her articles and guides. The content she writes helps SaaS & eCommerce companies get better at promoting their products.