TracRite Software Inc.

Empowering hospitality establishments with operational certainty.

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Cut Costs Without Cutting Corners

Every restaurant aims to do two things especially well, the first is to provide their customers with a quality product or service, and the second is to keep costs as low. While it sounds like these two goals may be at odds with each other, there are ways to control and lower your costs without sacrificing the quality of your product or service. We’re going to dive into a few of the ways that you can do just this.

Effective Inventory Management

A major piece of controlling your costs revolves around effective inventory management. This goes beyond simply counting your inventory and ensuring you have the right amount on hand. Have you not only costed out your recipes, but also kept those costs up-to-date as you have more stock arriving? Have you been able to track waste to the source? Do you know if your actual usage is close to you theoretical? These are all critical elements to your inventory management that could be costing you tens of thousands of dollars in profit each year, each month, or even each week depending on the size of your organization. While this may appear to be a lot of work, utilizing restaurant inventory management software, like Optimum Control, allows the calculations to be automated, and you simply have to enter your numbers. Your savings are twofold to the effect of saving on inventory and labor.

Joining a GPO

If you’re asking “What’s a GPO? And why should I join one?”, then you’ve been missing out on earning potential rebates for your purchases, and better pricing. Yes, that’s right, you get money back for simply placing orders through participating suppliers on certain products. GPOs, or Group Purchasing Organizations, work by leveraging the buying power of their members to secure rebates and more beneficial contracts with suppliers. If you work with specific suppliers, and are loyal to them, you may be able to find a GPO with that supplier in their network. Additionally, certain GPOs may have regionally specific programs. For example, MyDiningAlliance services organizations in the United States, while Alliance Purchasing services Canadian organizations, and it can even go beyond that for how specific a GPO is. Buyers Edge Platform has programs for food and non-food products, and has technology solutions to assist with your restaurant inventory management.

Menu Management

Menu management loops back to your restaurant’s inventory management. By using restaurant inventory control software, you should be able to identify which items are making you money, and which are simply costing you. The items costing you could be reworked by looking into your recipe costing, and seeing if changes can be made to either the recipe (without affecting the quality), or finding new suppliers that can provide the ingredients at a more affordable cost. If neither of these can be done effectively, your only course of action may be to remove the item from the menu. Not only will this lower your costs, but it may also provide you with more storage space for other ingredients.

Track Your Waste

While you may have everything else under control, if you’re not tracking your waste, you could be increasing your food costing by a couple of percentage points, which can lead to thousands of dollars in lost profits. By tracking your waste in your restaurant inventory control software, you’ll be able to find the source of your waste, and change your operations to ensure those losses aren’t continuing in the future.

As you can see, there are numerous ways that you can cut your costs while maintaining. If you’re interesting in learning more about Optimum Control restaurant inventory control software, or GPOs in your region, contact us.

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Making the Move to Inventory Management Software for Your Restaurant

Are you currently using spreadsheets or pen and paper for managing your inventory? We know that making the switch to inventory management software for your restaurant can seem daunting, but the benefits make it worth the effort. We’re going to explore what makes changing your system so beneficial, and what you can ultimately hope to see out of using the system to its fullest capabilities. Let’s dive in!

What can inventory management software do for my restaurant?

Software such as Optimum Control provides you with the full scope of your inventory situation, utilizing a robust suite of features including recipe costing, waste and allergen tracking, par level management, and more. These features provide you with time savings on tasks that would take hours after properly formatting your spreadsheets or doing manual calculations with pen and paper. Every time you enter an invoice (whether manually or through importing a digital copy), and your ingredient costs change, your recipe costs will be automatically updated to reflect these changes; this provides you with the most accurate food costing overall. You may be asking yourself “I do fine as it is, why would I change now?” and to answer that question, we typically see food cost savings between 2 – 5% of your annual food cost when using Optimum Control to its fullest capabilities.

What do I need to do in order to see these benefits?

To attain those food cost savings, you don’t need to be a computer expert or an accountant, all that’s needed is the time to put the elements in place for your chosen software to operate at its greatest capacity. In Optimum Control, this includes creating your items, preps, and products, importing your invoices on a regular basis, and consistently counting and entering your inventories. By doing this, the software will have the most up-to-date and accurate data to provide you with usable information to make your decisions. In the case of Optimum Control, one piece of information this includes is which menu items are your stars, which are the true workhorses, as well as which need work on their costing, and those that should be simply removed entirely. This is just one of the 70+ reports available for you to use in making your operational decisions. If you already know this information, Optimum Control will help you find it faster, and automatically this information when your new ingredient prices are imported from your invoices, so you don’t have to manually recalculate.

In addition to showing where your menu stands in terms of food cost and profitability, we’ll also point you to where your waste is coming from. Using Optimum Control with our suite of complementary restaurant management resources, you’ll be able to track waste straight to the source and make operational decisions based on the information you’re presented with. Approximately 10 – 15% of your inventory ends up as waste, which is 10 – 15% that is coming out of your pocket.

Outside of these direct monetary benefits, switching to an inventory management platform for your restaurant provides you with time savings by streamlining the inventory process, and giving you steps to follow that are simple and straightforward. We developed Optimum Control with this in mind to allow you to get back to managing the rest of your operations, and serving your customer base without having to worry where your inventory stands.

We aim to help you control costs, save time, and in the end, maximize your profits. 

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Book a FREE demo of Optimum Control: https://www.tracrite.net/contact/

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Inventory Control Basics

As a restaurant operator, your daily routines will be much different from that of a clothing or electronics store. You’re preparing a perishable product for consumers to ingest and enjoy. In this way, your inventory management will be much different. Inventory control for restaurants is an important piece of the management puzzle, and responsible for a large portion of your expenses. Throughout this article, we’ll be discussing what effective restaurant inventory control can do for your operations, the basic inventory control measures, advanced measures, and expert measures, as well as exploring how inventory control software can help streamline your operations, and ultimately maximize your bottom line. Let’s jump in!

Why is inventory control so important for restaurants?

You may not know it, but effective inventory management can help you uncover larger issues that may be hiding in the weeds. Here’s a just a few of the important aspects of your restaurant management affected by inventory:

maintaining proper stock levels

upholding quality and freshness

comparing prices between vendors

being able to accurately calculate your cost-of-sales

ability to spot theft

maintaining up-to-date menu costing

Those are just a few of the reasons why, and there are many more, that your restaurant’s inventory controls must be up-to-date and become habitual in order to be effective. While you go through the paces of setting up the steps and routines required of your staff, there are important steps that you must take in order for the systems to work:

You must be patient

Rome wasn’t built in a day, and neither will your inventory management system and its benefits. In order to be undertaken properly, certain steps must be taken to properly implement your restaurant’s inventory controls. This doesn’t mean that new staff must be hired specifically for the role; many, if not all of these steps can be completed by existing staff at varying levels with proper training.

Use an inventory order guide

Set up to provide a list of all tracked items in your inventory, the inventory order guide allows you to track your inventory not only for how much you have on hand, but also for reordering purposes.

To make it easier for counting, you can divide the guide up into different sections based on storage areas, what you’re counting, or any variable that you decide. It’s all about what works in your restaurant. This also allows you to vary the frequency of your counting if you so choose. You may want to count your full inventory on a monthly basis, while fruits and vegetables you may want to count daily, and this allows you to do just that.

Take monthly inventory counts

Counting on a regular basis, and schedule, allows you to not only build a routine, but also allow staff to get acquainted with the new procedures. Staff must also be made aware of the importance of not only counting, but how their restaurant’s inventory management impacts not only the restaurant, but potentially their own jobs.

In order to get the full scope of your restaurant’s inventory and its needs, you need to be able to value your inventory. This can be calculated using:

FIFO (First-In, First-Out)

LIFO (Last-In, First-Out)

Weight Average

Once you’ve determined how you’re going to value your inventory, you’ll need to count what you have on hand. This can all be done on your inventory guide. By multiplying the count by the value, we arrive at the total for that item, and if we summate the total value for each item, we arrive at our category’s total value.

By splitting your inventory into categories, you’re able to see a bird’s eye view of where the majority of the inventory is. The recommended category groups are:

Food Groups

Food

Soft Beverages

Beverage Groups

Liquor

Draft Beer

Bottled or Canned Beer

Wine

These can be drilled down even further if you need or want that information for the rest of your operations.

Calculate the monthly cost of sales

The only way to get an accurate cost of sales is by counting your inventory. The method of calculating your cost of sales is by counting inventory at the beginning of the month, adding your purchases throughout the month, and then subtracting your inventory at the end of the month. To put this in an equation:

Cost of Sales = Beginning Inventory + Purchases – Ending Inventory

Calculate inventory turnover

It’s important to not only know your cost of sales, but how close your inventory is to being accurate on a consistent basis. Having too little means you won’t be able to meet demand, while having too much means that your spoilage will increase. By calculating the inventory turnover rate, you’ll be able to help ensure you have the property inventory levels for your restaurant. In order to calculate this, we use the following formula:

Inventory Turnover = Monthly Cost of Sales / Average Inventory on Hand

Based on this ratio, when looking at what is best for restaurants, the typical turnover rates for optimal performing restaurants are:

Food: 4 – 6x per month (5 – 7 days of product on hand)

Liquor: ~1x per month (varies by concept / sales mix)

Bottled Beer: 2 – 3x per month

Draft Beer: 1 – 2x per month (varies with number on tap / concept)

Wine: ~1x per month

These rates allow a restaurant to control their inventory on a monthly basis, but what about the daily and weekly controls?

Calculate the weekly cost of sales

Taking weekly inventories and calculating your weekly cost of sales provides distinct advantages over only counting monthly. The two primary advantages are:

Being able to identify problems earlier – because you’re counting on a much more frequent basis, you’ll be able to identify them much more quickly.

Tighter control over inventory – by counting weekly instead of monthly, you’ll know how much you’ll need to order on a week-to-week basis instead of estimating month-to-month. This ensures you have more money in the bank instead of in your inventory.

If you think you don’t have time to count, consider that you could be saving 2 – 10% on your bottom line, which could be anywhere from tens of thousands to hundreds of thousands of dollars each year.

Daily key item inventory tracking

If you have inventory items that are key to your operations, and especially your food costing by being high in cost, you should be tracking the sales and purchases of these on a daily basis. By comparing the actual usage vs. theoretical usage, it will allow you to find any areas of wastage, or potential areas in your operations that can be tightened to make that gap smaller. If your actual is close to your theoretical, you’re on the right track, and if it’s equal, you’re in the perfect situation.

Once we’ve addressed monthly, weekly, and daily inventory controls for your restaurant, and can see that they’re working, it’s time to move on to the expert level of inventory management.

Calculate the ideal food cost

The ideal food cost is one that every restaurant strives to attain. This ideal food cost, or theoretical food cost, is what you expect to see over a given period of time should proper portions, yields, and waste are taken into account.

First, we start by determining the cost for each portion, al the way down to the individual ingredients. This is key to determining the ideal cost, as ingredient prices will change over time. Next, you’ll need to determine what your sales mix is. As the mix of low and high cost items change, so too will your ideal cost.

Keeping track of your sales for individual items is a simple task that should be able to be done through your POS, and will provide you with a starting point in determining what your theoretical food cost should be, by breaking out individual ingredients, multiplying them by the units sold and arriving at the total for each.

By taking this theoretical cost, we can compare this to the actual food cost by counting the inventory at both the beginning and end of a period, accounting for purchases, and finding how much was sold, multiplying the number of individual ingredients in recipe items sold by their cost. It’s important to do this, as you can break it down from the overall food cost, to department food cost, down to individual ingredients as needed. By doing this, you don’t have to spend additional labor hours hunting through individual ingredients when a slightly less deep view is required. Actual vs. theoretical is equally important when looking at food, liquor, and even your cleaning products.

Put in place inventory control software

If you have all of your other inventory control measures in place, the next step is to make these processes much more efficient, and this can be done by implementing inventory control software. By using software like Optimum Control, you can have all of your systems centralized, making it easier to access all of your information and analyze it. With these systems however, there needs to be complete buy-in within your organization, from the front-line employees all the way up to management. While some multi-unit organizations may have people dedicated to inventory management specifically, individual locations and many chains will need their employees and management to handle many aspects of this. In addition to this buy-in, employees will need to be meticulous in working the routine of counting inventory in set intervals in order to ensure the software is able to utilize it to its fullest, and provide you with the correct critical information to make the right decisions.

In order to properly prepare yourself for using inventory management software like Optimum Control, there are a few items that need to be addressed:

Inventory Masters: In order to properly utilize your restaurant’s inventory management software, you’ll first need to create an inventory master, which is a list of all ingredients that you purchase. This list needs to include the following information for each ingredient:

Batch Recipes: Each of your prepared items must have batch recipes created for them. These batch recipes will each include a specific quantity of the raw ingredients from the inventory master you created, or other batch recipes. You will also need to calculate your yields for both individual ingredients and batches. This will be a labor intensive process during setup, but will be less intensive when you are adding or removing single items, such as new recipes, or making changes.

Menu Item Recipes: Each of your menu items is composed of either raw ingredients and/or batch recipes, and requires a recipe of its own. In order to ensure your inventory is correctly adjusted when items are ordered, each of these menu items should have a matching description in your POS.

Inventory Locations: You’ll want to set up your inventory storage locations to ensure that physical counts can be undertaken. You’ll be able to print off countsheets for each inventory location, or export to a mobile device to use an application (such as OC Mobile) to conduct counts.

Vendors: All vendors you purchase from will need to be entered into the software and assigned their own vendor ID for each purchased product. In many cases, your chosen inventory management software will be able to interface with the vendor systems in order to get these numbers.

POS System Setup: In order to accurately track ingredient usage in menu items, you need to enter your menu items into your POS system. This includes any modifiers or substitutions that may be possible, such as onion rings instead of fries, or adding bacon and cheese to a burger. Daily specials, special features, and other modifiers need to be programmed in, as well as when new recipes are added. This presents more actions for your staff to enter orders, and for programmers to try and track ingredient usage.

Description

Pack and Case Size

Purchase Unit

Purchase Price

Par-Level of Inventory to have on-hand (when you record purchases, the quantity on-hand will increase)

As you can see, inventory is an important piece of your restaurant management puzzle, and one that should not be taken lightly. The slightest change to a recipe or your operations can create a ripple effect through your entire organization; as such, needs to have an established set of procedures and systems in place to ensure everything runs smoothly and efficiently so that you can control your costs and maximize your profits.

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Book a FREE demo of Optimum Control: https://www.tracrite.net/contact/

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Are Plant-Based Proteins the Way Forward?

As society evolves, the restaurant industry must evolve alongside it. In its current state, we’re seeing more restaurants offering plant-based proteins to consumers looking to either change their diets, align their dining options with their ethical values, or just try something new. This presents an interesting situation for some restaurants, as there are a number of variables in play that determine whether this is a viable course of action to take.

The first variable to take into account is consumer demand. Is there a large enough demand to not only make it worth developing menu items based around these alternative proteins, but enough so that with competition you’ll still be able to turn a profit. If the demand for such a product exists, but not enough to use the levels of inventory required, any unused inventory will spoil, leading to a potentially catastrophic loss. Before any other planning takes place, such as building out recipes, to working out your food costing and prices, you need to start by taking a deep dive into your market to find out what is driving them to purchase plant-based proteins, what their price sensitivity is, and the likelihood that they would buy from you. Once the overall demand is determined, you’ll want to do a competitor analysis to find out if any of your competitors are offering plant-based proteins. Is the number of offerings by competitors too high? Then it may not be worth your while unless you can provide unique dishes and a quality that goes above and beyond your competitors.

The second variable is quality. This quality exists in two forms for our purposes, those of the protein itself, and those of the dishes created with it. If the raw protein lacks the quality to be used in dishes, and does not stand up to the quality expected of your restaurant, then you should not attempt to make it fit for the sake of having it on your menu. By doing so, you stand to make a dish that comes off as disingenuous and can ultimately give you a negative image. This quality of the raw protein extends to the longevity of it. Quality ingredients should be able to last; however, you may need to reorganize your storage spaces to make space for this new set of ingredients, which will ultimately change your workflows and day-to-day operations.

This brings us the area of expertise for Optimum Control: inventory management. For some restaurants, inventory management may be the tipping point for surviving, and adding a new protein to store and manage may be the straw that breaks the camel’s back. You need to consider questions like “How much do I have on hand?”, “How much should I order?”, and “How much can I physically store and make space for?” These  are important questions to consider, as they can drastically change your operations from a chef’s workflow, to a manager’s counting procedure. By moving storage locations, everyone has to adapt quickly in order to minimize the impact on service. Knowing how much to order, and when to order, can eventually be worked down to a science; but, in the beginning, having restaurant inventory management software like Optimum Control can make the process less of a chore, especially with a product that is relatively unknown to you, and moving forward, can allow you to save time and focus on other pressing matters.

One of those pressing matters is pricing. While Optimum Control has built-in tools to help you with your recipe and food costing, you will ultimately set the prices for customers. These prices will need to strike a balance, they need to be profitable, yet affordable. Your market research and competitor analysis will give you an idea on what the market will bear when it comes to plant-based proteins. In many cases, consumers are willing to pay more for these proteins, as they align with their ethical values. This being said, there is a point where you will encounter price resistance, whether that be due to the nature of the dish, or of the existing prices of dishes in your restaurant. Price these dishes too far out of your existing price range, and customers will have a harder time attempting to rationalize them, even if it aligns with their ethical values.

Our final point brings us to the impact of ethical values when it comes to the decision of incorporating plant-based proteins on your menu. Unlike the other variables, this one is especially unique with regard to non-meat proteins, as it can be a decisive factor when it comes to a customer choosing to dine with you, as it’s an immensely personal decision. If you’re going to include plant-based proteins, and state your ethical reasons behind it, it needs to be genuine, and make sense. A steakhouse offering plant-based proteins and providing ethical reasons for doing so comes off as disingenuous, and exploitative.

With these variables all coming into play, do we believe that plant-based proteins are the future? That remains to be seen. Many fast-food establishments have tried them, and removed them without any mention of a return. While we do believe that they may have some place in the future, the key variables right now that are holding them back are the price, quality, and ethical values. Many organizations have met resistance when it comes to introducing plant-based proteins, believing they’re only doing it because it’s the popular thing to do. In addition to this, the perceived health benefits were not as people made them out to be, and on top of this, the quality did not match the prices that were attached to them. This leads us to believe that while there may be a place for plant-based proteins to take a much larger piece of the pie, an improved product must be attained, along with economies of scale in order to bring the prices down for restaurants, and ultimately consumers.

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Book a FREE demo of Optimum Control: https://www.tracrite.net/contact/

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In a day and age where convenience is a deciding factor for many, the question that remains for many restaurants is “is it worth it to implement our own delivery / take-out system, or use a 3rd party platform?” In order to determine this, you need to undertake a critical analysis of your needs and capabilities, looking at everything from food costing, to pricing, and even inventory management to gauge the viability of using such a service. By doing this, you’ll have a much greater understanding of how delivery and take-out will affect your operations, and ultimately your bottom line. We’re going to take a deep dive into what needs to be considered before adopting either solution, or none at all.

3rd Party Platforms

We’ll begin by looking at what is associated with adopting a 3rd party platform such as UberEats or SkipTheDishes. These differ from traditional delivery / take-out systems in that their presence is almost entirely digital, the ordering process is largely out of the restaurant’s hands, and customer service is handled through the platform provider instead of on a one-to-one basis. Let’s start by looking at what these platforms bring to the table that will benefit you as a restaurant operator.

Pros

At their core, these services provide an additional revenue stream to your restaurant if you do not currently have a delivery and/or take-out program in place. For those of you currently operating your own system, it may prove to be more beneficial to use a 3rd party platform depending on your restaurant’s operations. Why?  We attribute this in part to the cost constraints of hiring staff on an hourly basis to run deliveries, and maintain the delivery / take-out system, as well as the cost of implementing the system itself.

In many cases, the platform provider will provide the hardware in order to run the system. This generally comes in the form of a table to manage orders. As many people are familiar with tablets, the training in the operation of such systems can be adopted at a much faster rate than learning something like a new POS system. This then leads to a faster turnaround on implementing the system and using it to its fullest capacity.

One of the largest yet ultimately unsung benefits of using a 3rd party platform is the built-in advertising. By being listed on their marketplace of restaurants, you’re provided with what essentially free advertising to tens, if not hundreds, of thousands of potential customers, all of which are looking for your product. While this benefit can be difficult to track on an ROI basis, the increase in sales that cannot be directly attributed to the service could be partially attributed to this brand awareness.

Cons

On the other side of this coin, there are potential downsides to operating delivery / take-out by using a 3rd party platform The primary issues are fee structures, inventory management issues due to variable demand, and technology glitches.

The fee structures for many 3rd party platforms, these can be quite substantial, reach heights of 30-40% of sales. For many restaurants, this additional cost can drive them into the red on every order, and is simply unsustainable. In this case, you have 3 potential courses of action. The first is to simply abandon the platform and either not offer delivery / take-out options, or offer them in-house. The second is to take a closer look at your inventory management and food costing processes to see if the cost of dishes can be further honed to create larger margins. The final option, which can be a difficult pill to swallow for many restaurants, is to increase your prices. The reasoning behind this being the final option, and somewhat of a last resort, is that it has the greatest direct impact on your customer base, and can generated the largest negative impact via word of mouth.

The second issue is inventory management. Managing your restaurant’s inventory levels can be a difficult process as it stands. by adding in delivery and take-out from a 3rd party platform, it becomes even more difficult to gauge the demand and order properly. Ultimately, you may be left with too much inventory that eventually goes to waste, or too little and not being able to meet demand. Using restaurant inventory management software like Optimum Control can help to combat some of this variable demand, making your processes and operations run smoother, with less hiccups along the way.

The final issue that presents with 3rd party platforms is that of technology, and its potential to fail at times. As these platforms are exclusively web-based, if there is an issue with system updates, hardware failures, or internet connections, then these systems will fail to operate and sit dormant. This leads to not only a loss in orders, but also customer discontent, as they will be frustrated by not being able to order from you. In this sense, being technologically advanced can be the downfall for some restaurants.

In-House Take-Out / Delivery

In looking at in-house take-out and delivery options, there are a wide variety of options available, ranging from custom built ordering websites and online ordering software, to simple phone orders with paper slips. Each of these systems have their benefits and drawbacks that make them as unique as the restaurants that use them.

Pros

In-house delivery systems, much like their 3rd party counterparts, offer an additional revenue stream that may not have been previously available due to either a lack of capital to implement, or the capacity in which to operate such a system. If your restaurant has the capacity in its operations, but not in its seating, this is when implementing a delivery / take-out system may be advantageous, and when indoor seating is unavailable, necessary to remain open.

The second advantage to going in-house is the ability to either implement or craft a system that works specifically for your needs. By using a 3rd party system, your operations have to confirm to their specifications. This may not be ideal, or even possible, for many operations based on staffing levels or restaurant layout. By being able to pick and choose what you need for your restaurant specifically, you’ll be able to design a system that works within your existing operations, and abilities.

Cons

Operating your own in-house delivery / take-out system does have its potential shortcomings, especially if you’re not prepared to deal with them on your own.

The first of these issues begins in how you develop your system. 3rd party systems provide you with a roadmap of implementation, and while creating and implementing your own system provides you with flexibility, it does present a unique set of challenges. The first of which is forcing you to take a critical look at how both your front and back of house operate, and create a plan that works both in, and with, your existing systems. The reason this is a challenge, is because it may expose weak points within your operations that need addressing before the system can be built out.

No In-House Take-Out / Delivery

While this may limit your possibilities for adding a potential revenue stream, not all restaurants may be able to handle having a delivery / take-out component to them. Perhaps your operation can’t handle the additional orders coming in, or you don’t have the ability to make such an offering profitable due to scheduling or hiring the appropriate number of stuff to handle the delivery and management aspects. You can only optimize your food costing to a certain degree before other aspects must be focused on to ensure profitability in such an undertaking.

The key to operating in-house delivery and take-out is that no matter how large or small that aspect of your operation, and how important you may see it becoming, it must be profitable in order to make sense. Whether that be creating your own system, or implementing a 3rd party system, you’ll need to take the path that provides you with the greatest earning ability.

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Most Effective Ways to Count Inventory

While everyone has their own ways of counting inventory that may work for them, there are some methods that may make your counting process work much more efficiently, and allows you to count with greater accuracy.

The first method we recommend using is organizing your storage areas by types of ingredients. This makes it easier to not only find ingredients during prep and service, but also to locate any inaccuracies or errors between your actual vs. expected. In addition to this, it will make it easier for you during the counting process, as you won’t be jumping from place to place in order to count product, ultimately saving you time.

The second method would be using digital counting methods, such as barcode scanners, mobile inventory applications such as OC Mobile – Inventory, and digital scales. By using these options, there is a lower likelihood of errors in transcribing from paper to your inventory management software. It also makes it much more efficient for you to count your inventory, as you won’t need to transcribe, merely import or allow your inventory management application to sync up.

The third method would be to establish an inventory calendar. By knowing when you’ll be counting inventory, you’ll be able to prepare yourself and the restaurant for when those days come; whether that means moving inventory around so it is easily accessible, and by determining whether you’re doing a full inventory count, or a count of specific high-traffic items. If doing a full count, you may want to split the count up among multiple staff members vs. doing a smaller count that can be handled yourself.

The fourth method would be to establish lists of inventory items that you want to keep close track of and periodically spot check them to ensure they’re accurate. Knowing your inventory is accurate between established counting times helps to ensure that inventory is correct on a consistent basis and not just on days when staff know the inventory will be counted.

These are four methods to help you count effectively, and ensure your inventory is accurate on a consistent basis. This will help you reduce inventory losses, maximize profit, and grow your business.

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What’s the Ideal Menu Size?

Have you ever looked at your menu and wondered if it’s too large, or perhaps too small? By having an appropriately sized menu with a layout that makes sense, you could be making that much more money. Join us as we explore why having the largest menu isn’t the best course of action for your business.

If we look at a menu from a customer’s perspective, a large menu can be overwhelming and will take longer to go over each item in order to decide what they’d like. In addition to this, a larger menu can confuse customers depending on the layout, leaving them to take even more time to figure it out, or having their server explain it. This in turn affects the business’ ability to serve more customers in turning tables.

From a business’ perspective, the larger the menu size, the more inventory you have to carry in order to create all these dishes. This is not ideal, because if there is a lack of customers ordering a certain item, that inventory will go to waste, resulting in a large amount of wasted cash flow and potential profits. The slowed turnover of tables will also cut into profits, as there will be less revenue coming in. So in this line of thought, why do some restaurants continue to have large menus?

For some restaurants, having a larger menu means they offer a wider variety of options to a greater number of people. This too, can be a dangerous way to think and operate, as with anything, if you try to be everything to everyone, you’ll be nothing to no one. It’s difficult enough for restaurants to master a smaller menu, so by expanding your menu, any increased quality you had on that smaller menu would be spread out across the larger menu.

Are there select circumstances where a larger menu works? Yes, though they are rare. In order to be truly successful with a large menu, you need to have a few key components for it to work: a large enough customer base, the foot traffic to justify it, and last but certainly not least, the labour capacity to meet the requirements of such a menu. If you can’t prepare that style of menu on that scale, then what’s the point in trying?

What can we conclude from this? Your menu size should match your foot traffic, potential market size, and the number of staff you have, along with their skill potential. By having this correct fit, you’ll have a greater ability to turn tables, and make money in the long run.

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How to Set Yourself up for Success in Inventory Management

When looking at how to set yourself up for success in managing your restaurant’s inventory, there are a number of key areas to examine and address to maximize your ROI. The BC Cook Articulation Committee identified five steps to effective inventory management.

Set up systems to track and record inventory.

Develop specifications and procedures for ordering and purchasing.

Develop standards and procedures to efficiently receive deliveries.

Determine the frequency and processes for reconciling inventory.

Analyze inventory data and determine areas for improvement.

We’re going to examine each step of this process, and examine how each allows you to maximize your bottom line. To begin, you need to set up a system that not only works, but works within your organization.

When looking at step one, you need to find a system that fits exactly what you need in terms of features and capabilities. Optimum Control is one such system that allows you to track your inventory, along with many other value-generating and money-saving features. In addition to this,  we offer a number of free resources to help set your organization up for successful restaurant inventory management. These include waste log templates, yield charts, daily intake value reference sheets, and more. Using these resources, a restaurant inventory management system, and provided count sheet templates, you can help set yourself up for success.

The second step is determining how you’re going to handle ordering and purchasing. This includes determining your forecasting method, your valuation method, who you’re going to purchase particular products from, and more. This step is essential to building relationships with your suppliers. By doing this, you may end up having access to greater discounts for buying in certain quantities, among other benefits. If you don’t establish your procedures and guidelines, and there is more than one person responsible for purchasing and ordering, each may have their own methods and reasoning, leading to irregularities, and potential issues. This step is key to ensuring that you order and purchase the quantities needed to maintain the optimal inventory levels.

The third step is how the deliveries are received. Do you have a standardized procedure for when your deliveries arrive on location? This includes the staff on hand to do the receiving, the location for the stock to be received in, the steps taken to actually receive the stock, and how many issues (damage units, incorrect product, etc.) will be handled and tracked to receive credit for them. Without this step, potential issues with your orders may go unnoticed, leading to shortages or overages that you may or may not have been charged for.

The fourth step is subjective, as it resolves around how often you count, and the processes that are used to conduct the counting. Whether you’re counting daily, weekly, monthly, or yearly, your counting process should follow the same steps each time to ensure accuracy and consistency are maintained. The frequency by which you count will ultimately rely on how busy your organization is, the number of staff you have available to count, the number of items to count, and more. Both the frequency and counting processes need to be consistent in order to not only purchase and order properly, but also to operate at capacity.

The fifth and final step is when you step back and examine the results of the previous 4 steps to determine where you’re doing well, and where you can improve your systems. From here, it’s a matter of overhauling of fine tuning your systems.

These 5 steps deal primarily with ordering, counting, and receiving, but how do you ensure that your current inventory doesn’t go to waste or go under utilized?

There are a number of solutions available to help reduce your inventory losses that are due to preventable causes. One of these is to ensure that your storage areas are dated and labelled consistently, whether that be when the product was first received, first prepared, or first packaged. This allows you to ensure that older products are used first, either before it goes bad or is over-ordered in the future.

In addition to properly labeling your ingredients and products, you’ll want to ensure that your storage areas are not only up to code, but to the optimal standard in order to ensure product longevity is at a maximum. This reduces waste and allows you to maximize your return on that inventory.

Another solution is to be much more analytical with your par levels, and where to set them. If your par levels are set too high, you may be ordering more product than is needed. When setting your levels, you’ll want to take into account any upcoming events or promotions, and whether you should be ordering more than your standard par levels. You’ll want to establish standard par levels for your operation to streamline your purchasing and ordering processes with the flexibility to adapt to sudden changes or new events that may pop up suddenly.

These are a few of the simple solutions available to help set you on the path to inventory management success. While there are more complex solutions available to achieve success, we found that these were easier and simpler for staff to learn and adapt to the new processes and procedures.

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Chef’s Tables/ Open Kitchen: Helpful or Hindering?

Chef’s tables have been an institution in many restaurants for years, and open kitchens are starting to make a resurgence, so we decided to examine whether these are a hindrance for kitchen staff, or a method of accountability? Naturally, we would believe that this causes a hindrance, as having more eyes on you will increase stress levels, leading to the potential for more mistakes to be made. In addition to this, staff will be unable to use any kitchen shortcuts that may be standard in the industry, but would potentially be frowned upon by the general public.

If we accept this notion, kitchens will need to run a much tighter ship in order to remain both profitable and acceptable for viewing. This provides both customers and businesses advantages as customers will be allowed to experience the kitchen, while restaurants will be allowed to hone their craft and optimize the areas that they can in order to be efficient and presentable to those either at the chef’s table, or seated near the open kitchen.

If we continue to look at this from a business perspective, it allows you to weed out the staff that are either under performing, or aren’t following recipe and prep instructions, and either help them improve, instruct them to follow the instructions, or terminate their employment. It gives you a rough “grading” system to work with in order to optimize your staff to get the quality you demand.

Why do some customers enjoy seeing the inner workings of a kitchen? Sometimes this boils down to enjoying the atmosphere and energy of the kitchen, they’ve watched Hell’s Kitchen and want to experience it first hand, and some are just intrigued by the kitchen’s inner workings. Regardless of the reasons, customers enjoy being close to the action and being able to see the effort that goes into their food.

The question that ultimately remains is whether it’s a hindrance to restaurants, or another layer of accountability. This really comes down to the restaurant and how they operate. If the restaurant is on the up-and-up, this wouldn’t be an issue. If they are not, and either need facility improvements or to ensure their staff are properly trained, this is the perfect opportunity to do just that.

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Allergen and Nutrition Tracking: Why is it Important?

In a day and age where allergies to ingredients are becoming more and more common, being able to track these ingredients along with their nutritional information from prep to product is essential. By doing this, you’ll be able to safely, and accurately, list dishes properly on your menu; this in turn makes it easier for your customers to order dishes they can eat, and recommendations your staff can make based on customer allergies.

Nutritional information is important, as it gives chefs the ability to create not only health-conscious options, but also options that fulfill different diets such as Atkins or Keto, or those with Celiac Disease. It is important for a restaurant to say, with certainty, that those ingredients are in the recipe, or are not in the recipe.

The tools offered in Optimum Control allow you to track allergens through recipes and preps effectively and efficiently. By allowing you to print nutritional labels, you know exactly what you’re using, and what the nutritional value is. If you previously had a system in place, or no system at all, you would be flying by the seat of your pants. This is not a safe or reliable method for restaurants, as it only creates the potential to harm your customers by giving them ingredients or dishes that they may be allergic to unknowingly.

In order to make the most of these tools, you’ll need to ensure your entire kitchen is on board, as this will be an ongoing process that requires the investment from all staff. Labels should be placed in the same location on each container, box, and bag to ensure consistency and efficiency when locating ingredients and preparing the final products. If you’re changing suppliers or brands, you’ll need to ensure that the nutritional information and allergens listed on the label still match your information on file. If even one ingredient is different, the entire recipe could be incorrectly categorized, leading to potentially disastrous consequences for all involved.

You’ll also want to ensure that the system is appropriate for your operations. If you’re running a small pop-up with a minimal menu, and little to no regard for allergy accuracy or nutritional information, then you’ll see little to no benefit from being able to track them. Is nutritional information and allergy tracking really that important? It depends on how important this information is to your customer base. If you do need these features, Optimum Control has a solution for you, regardless of your organization’s size.

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Best Practices in Prepping

Prepping for service can be chaotic, and sometimes things get missed. We've provided 4 tips to help you prep in the best way possible, and to ensure that your margins are maximized instead of eaten.

1. Clean Prep Surfaces

A dirty prep surface can lead to product being spoiled and needing to be thrown out. Remember to clean your surface between preparing ingredients to avoid cross-contamination, as food wastage reductions can lead to a large change in your margin in a positive way.

2. Establish Portion Standards

By establishing portion standards, those doing the prep work are able to follow a guide and efficiently prepare portions on a consistent basis. This allows customers to anticipate the portion sizes in advance, and allows the kitchen to keep margins tight by not providing too much product.

3. Date and Label EVERYTHING

By dating and labeling all ingredients and preps, you will know exactly what you have, and when it was prepared. This is of great importance as you not only want to reduce the level of waste by minimizing expired product, but you also want to ensure that you're serving the best possible product in line with your food costing method.

4. Have Defined Recipes and Prep Instructions

Operating without a plan of action or a defined set of guidelines does not work anymore. In order to prep properly and ensure your margins are maintained, having well defined recipes and preparation instructions are a must. Similar to portioning guidelines, they allow you to have a guide for staff to follow and it allows guests to enjoy a consistent experience from visit to visit.

While each restaurant may have their own ways of doing things, and tweaks to the system, these are a few methods we identified as being essential to allowing prep to make your margins larger instead of smaller.

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Recipe Costing 101

Recipe costing is an important piece of the restaurant business; if you're not utilizing it, then you may be costing yourself tens of thousands of dollars in lost profit each year. We're going to go into more depth as to what recipe costing is, what it has to offer, and what not doing it could be costing you.

What is Recipe Costing?

Recipe costing is just as it sounds: determining what the cost of each recipe is by summing the individual elements of a recipe and their respective costs. That's a simple explanation of what recipe costing is, but there's a lot that goes into it.

Why is Recipe Costing important?

Without recipe costing, you would have no idea how much you stand to make from selling a particular dish. You could, in fact, be selling it at a loss and not have any idea you're doing so until it's too late. By not recipe costing, you won't know how much each dish needs to be sold for in order to break even, let alone turn a profit.

How can you make Recipe Costing easier?

Recipe costing can be made easier by using applications to help you streamline the process and give you steps to follow. There are a number of different applications that offer this feature, including Optimum Control. The recipe costing features offered in Optimum Control allow the results to be used across other features offered within the software.

What should you look for in a software solution?

The process and software should be straightforward and easy to use, but robust enough to give you the information you need. By making the process convoluted and confusing, it defeats the purpose of using software. It should also be accurate; we recommend costing out a recipe by hand, and then use the software to ensure they're close if not the same.

If you're looking for recipe costing features and inventory management software, then Optimum Control has a solution for you. We have software for single-location establishments, multi-unit organizations, and multi-revenue center locations. Contact us today for more information.

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Where Does a Menu Price Come From?

While there are those in the restaurant business who know where a menu price comes from, we created this short guide to provide information to those curious about how a chef goes from ingredient prices to menu prices.

To begin, we’ll start with the menu cost equation, and then explain the individual elements that make up that menu cost.

Menu Price = (Fixed Cost Per Unit + Labour Cost Per Unit + Food Cost) x (1+margin percentage)

This may look complicated, but once each element is explained, the equation will make sense. The components are:

Fixed Costs These costs are one of the most difficult to attribute to menu prices, as they must be attributed based on expected sales. An overestimate on the sales means the prices will be below the breakeven point, and an underestimate on the sales means your margins will be much larger in actuality. These costs include rent, utilities, internet, insurance, etc., and are all costs that don’t change as a total based on the number of units sold.

Labour Costs Many times, labour costs are overlooked by onlookers, and yet they make up a large portion of the menu price. Like fixed costs, they are attributed based on a per unit basis, and while technically fixed, are broken out separately, allowing for additional analysis. These labour costs include not only the chefs and servers, but also the host and hostesses, maintenance staff, management, and anyone else that helped make your experience possible.

Food Costs The element that most people directly associate with menu costs is the food cost, as it’s what they’re consuming. What most people don’t realize is that the food cost is typically between 30–40% on average, meaning there is only 60–70% of that cost attributed to other elements.

Delivery/Takeout Platform Service Fees You’ll notice that this component was not added into the menu price calculation. These fees can account for up to 40% of sales through the platform, and while some restaurants choose to add it onto their online menu price on each platform, others will continue with their original pricing and eat the cost. For this reason, we have left it out.

After all of these individual elements are accounted for, the final price is determined by taking these costs, adding them all together, and multiplying by (1+margin percentage) to attain our final menu price. If the desired margin was 30%, you would multiply by 1.30)

As you can see, the menu price equation is simple at its core, but is fundamental to operating a successful restaurant. If you need help with menu costing, Optimum Control updates your recipe costs automatically with your latest inventory costs.

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10 Tips to Reduce Inventory Costs

In a world where cutting costs and minimizing losses is becoming more and more important, we’ve come up with a list of 10 tips to help reduce preventable inventory losses and maximize your value on return.

1. Keep Waste Logs By keeping waste logs, you’ll be able to track where you’re losing money, and where your processes can be fine tuned; whether that’s through recipe costing or physical process enhancement, there’s always areas that can be improved upon, which leads into our second point.

2. Analyze Your Operations for Weak Points Look at your operations from the top down, including everything from when the inventory is ordered and received, to when the customer’s order is placed, all the way through to when the customer receives their meal. By performing a critical analysis, you can see where there are areas that inventory losses can be avoided, whether that be through misuse, spoilage due to over-ordering or incorrect preparation. Finding the weak points in your chain can make inventory management much easier and efficient.

3. Date and Time Labels on Ingredients In order to avoid ingredient spoilage, the most effective, and simplest, way of doing this is to place dates and time of when the ingredient was either received at your location, or when the product was prepared. By doing this, you’re able to ensure that your oldest product is used first, and avoiding large amounts of spoilage. If a product has been continually underused and gone bad, it may be time to remove that item from your menu.

4. Using Store Brand Ingredients If you’re able to use store brand ingredients without compromising your product’s quality, and are able to get them at a cheaper price than your current supplier, this is one very effective way to cut inventory costs. This will bring your recipe costs down, while maintaining a healthier margin.

5. Recipe and Menu Costing If you’re not costing out your individual recipes and overall menu, you could be losing thousands, if not tens of thousands, of dollars each year. With accurate recipe costing, you can save upwards of 7%, if not more, on your food cost.

6. Negotiate with Suppliers to Buy in Smaller Pack Sizes If you’re using less of one ingredient, and the rest is going to waste before you can use it, see if you can negotiate with your suppliers to buy in smaller case sizes. By doing this, not only do you lay out less cash in the short term, you also don’t risk wasting product and throwing money down the drain.

7. Ensure Staff are Properly Trimming Meats While staff in the kitchen are typically well trained in their craft, ensuring steaks and other cuts of meat are properly trimmed to hit their maximum yield will help keep your inventory costs down, as improperly trimmed cuts will either anger customers, or be laid by the wayside to go unused.

8. Shrink Your Portion Sizes As 17% of diners’ food goes uneaten (SOURCE), shrinking your portion sizes will not only make your margins larger, it will allow you to maximize the number of dishes that can be prepared from the same order size of ingredients.

9. Ensure Your Recipe Book is Up-to-Date with the Latest Preparation Methods A small yet crucial detail in cutting inventory losses is ensuring the preparation methods your kitchen is using are in sync with those in your inventory management system. The slightest deviation between the two can lead to large losses on individual dishes, and your net revenue.

10. Use a Security System While no one wants to believe that their staff are stealing product, it does happen. By pairing inventory management software like Optimum Control with a security system such as Solink, you’re able to pinpoint where your losses are coming from, and investigate further as to whether it was misuse, a mistake, or theft, and act accordingly.

Utilizing these tips while using inventory management software like Optimum Control will help your business minimize preventable inventory losses, and allow you to maximize your profit-making potential.

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How do Delivery Apps Change the Restaurant Business Model?

In the past few years, delivery and takeout platforms have taken the world by storm. While this has provided restaurants the opportunity to service customers in areas not previously available, whether that is due to logistics or choice, underestimating the systems can be dangerous too. The right choice boils down to a number of factors, and we’re bringing to light those that have the potential to either grow your restaurant’s business exponentially, or cripple it.

The first factor that many restaurants will need to examine is their operations. Depending not only on the size of the kitchen, but that of the team, a restaurant may already be running at capacity, and not have the ability to fulfill delivery and takeout orders. If they are not at capacity, how many additional orders can the kitchen handle? This capacity also extends to the front of house, as a member of staff will be required to manage and maintain the platform’s application, and the orders when couriers arrive to collect the orders. A process must be created, or modified, for these orders to take priority placement in the kitchen’s workflow, potentially causing disarray in order to determine feasibility of the platform working there.

In addition to the operational changes required to fulfill the needs of a delivery and takeout platform, the piece of the puzzle that many restaurateurs see as the primary driver is the revenue generation opportunity. While there is revenue to be generated from these platforms, restaurants do need to be aware of the fee structures, and possibility of additional fees and penalties that may arise with certain situations. For many smaller restaurants and lounges, the percentage of sales that the platform provider takes in service fees is unsustainable (in some cases 30–40% of sales.) From the very beginning, many establishments will be losing money on every order, or simply breaking even; however, this struggle can be made even worse through the platform imposing unreasonable fines / penalties. These penalties can be assessed due to not having the order ready when the courier arrives, or mistakes made due to special instructions from the customer either not being included or not followed. If the person expediting the online ordering platform is not doing their job properly, the effect on the business could be devastating.

Payouts to the service provider are not the only financial risk; because you are launch a new service offering, your customer base will have to be made aware of this. While some may come across your restaurant on the listings provided on each platform, advertising dollars will need to be spent to get the word out across a variety of advertising methods. It’s a catch-22, as you’re spending money to potentially get little to no reward in some cases.

It’s not all sunshine and roses, or doom and gloom either for that matter. In order to make the most of your delivery platforms, we offer a few solutions to help mitigate the financial and operational impacts.

In order to maximize both in-store and platform traffic, your restaurant’s inventory will need to be managed effectively, and we recommend using an inventory management software designed specifically for restaurants. Using this software to its fullest capabilities can help save 2–5% on your food costs, which will help cut into the percentage taken by the platform provider for delivery and takeout sales, while helping increase your margin on in-store sales as well.

Our second recommendation is to negotiate your fee structure with your platform provider. If you can show them that your sales volume will create significant returns, even at a lower percentage fee, they may be willing to accept a lower rate.

Our final solution is one that should be considered last, as it has the potential to anger your existing clientele. A price increase on your online menu will allow you to recoup some of the difference in margin between an online sale and an in-store sale. The price increase could be seen as a “convenience tax” and anger your customer base that have been frequenting your location.

So is using a delivery and takeout platform right for your establishment? Only you can make that decision, but we advise taking a close look at your operations and business model before doing so. A wrong decision could devastate your business, while the right one could take it to new heights.

If you need help with your inventory management, Optimum Control helps to streamline the process and give you the information required to make critical business decisions.

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Food Trucks: Inventory Dream or Nightmare?

Food trucks have grown in popularity at an exponential rate alongside the growth in social media usage; but are they an inventory management dream scenario, or a nightmare waiting to happen? We’re going to look at the different elements that will help you make that final decision. Let’s jump in and start with potential issues that may arise.

Over/Under-Ordering

The larger issue of the two is over-ordering. As space is limited on food trucks, any additional inventory not on the truck must be stored in appropriate storage locations. This required storage creates not only an immediate additional cost, but also a potential loss on perishable inventory that may not be used before going bad. While you may have additional inventory on hand if you should run out on the truck, it’s a large risk to take. On the flip side, you may be over-ordering in order to meet a supplier imposed minimum, as opposed to running the risk of incurring penalties.

The other half of this issue is under-ordering to meet demand based on historical numbers, or you have much higher demand than expected, creating a potential shortage of inventory, and running under capacity. This means that if the truck runs out of ingredients, some popular dishes may have to be removed from the menu, or the truck may have to close entirely until more inventory is available. If you want to stay open and not remove those dishes until your next order of inventory arrives, you’ll need to run out to a store and spend more on your ingredients than you originally would.

Variable Demand

While over and under-ordering are key issues when it comes to managing inventory on your food truck, these issues can be attributed to the overarching issue of the variable demand and nature of food trucks. Weather, location, and general demand of the final product, among other variables, have great effects on the overall inventory requirements of the truck. Due to this variability, it may be difficult to order based on historical data or making general estimations.

Now that we’ve looked at some of the difficulties of food truck inventory management, there are silver linings that exist.

Limited Menu

By having a limited menu, you’re able to make recipe and menu costing a straightforward process. Using many of the same ingredients across many recipes allows you to minimize the time counting the individual ingredients, leaving less room for error.

Waste is Minimized

If ordering is done properly, inventory levels will be such that inventory turnover will occur frequently, leading to lower levels of waste, and ultimately a lower food… and who doesn’t love a lower food cost?

Fewer Storage Areas

Provided you don’t have secondary storage, you’ll only have one location to count inventory, and that’s on your truck. This makes it faster and easier to track inventory losses, making it easier to get accurate counts. If you do have secondary storage, your areas should still be fewer than that of a restaurant with a permanent location. Ideally, you would have storage areas for dry, refrigerated, and frozen, and finally on your truck.

As we can see, there are upsides and downsides to managing inventory on a food truck, and having a software solution, such as Optimum Control, makes the process easier and streamlined. Whether it’s a nightmare or dream is dependent on your business practices, and how your operations are organized.

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Restaurant Trends in 2020

As 2020 progresses, many restaurants have a question mark hanging over them. COVID-19 has changed the way that business must be done; whether that be for better or worse. The following trends are those we observed prior to COVID-19, those during the pandemic, and those we see continuing to persist after the pandemic ends.

Delivery and Takeout Demand Surges

Through 2019 and into early 2020, delivery and takeout services such as UberEats, DoorDash, and SkipTheDishes began to grow steadily in popularity. The ability to have popular restaurants menus at your fingertips without sitting in the restaurant, or even leaving your home, fit perfectly into what we like to call the “age of convenience.”

As we entered the COVID-19 pandemic, this popularity of such services grew exponentially, only this time it was out of necessity and not convenience. Now that we have entered a time where delivery and takeout are not only the sole source of service, but also revenue generation, restaurants and lounges must shift their operations to embrace this change moving forward. As the World begins to recover from COVID-19, having this solidified workflow for delivery and takeout will provide an additional revenue stream, as opposed to the only one. We fully expect to see delivery and takeout surge forward for long after the end of pandemic.

Fast Casual / QSR Format Will Continue to Take the Top Spot

We previously spoke about being in an age of convenience, and our next trend falls into that age of convenience quite well. We’ve seen quick service and fast casual restaurants rise in popularity in recent years; consumers enjoy a quality product, but don’t necessarily enjoy the appeal of making an entire night of the experience. This is where quick service and fast casual restaurants come in.

Quick Service, also known as “fast food” has been the most popular format for some time, as it’s fast, it’s simple, and consumers get consistency with the product. Fast Casual takes the second spot, offering a high-quality product with a higher price point, while still emphasizing the speed of service. What makes both these formats popular is the convenience and speed of them, and moving forward, our belief is that these formats will continue to flourish in the future, especially so if health authorities emphasize on minimizing contact for the foreseeable future.

Increases in Portion Control

As the restaurant industry tightens, so too will the need for stricter portion control. As we have seen with many restaurants, portions are too large for customers to consume in a single sitting, with 17% of diners’ meals going uneaten. (SOURCE) This represents a large amount of wastage that could be staying in your pockets.

Due to this, we expect to see an emphasis on recipe and menu costing, allowing restaurateurs and chefs to manage their food costs effectively and efficiently. A restaurant’s ability to survive in our current climate can be determined by shaving one or two points off this cost, and as such, we expect to see plate sizes shrink in 2020

Biodegradable / Plant-Based Containers and Utensils Will Become Commonplace

Prior to 2020, we saw the beginning of the end for single-use plastics in restaurants and bars. The greatest shift in this trend was the replacement of plastic straws with plant-based ones in many QSRs. We see this trend continuing with not only the adoption of plant-based straws, but also in more takeout containers, and even more so with single-use utensils.

While these plant-based alternatives cost more than their plastic counterparts, the environmental benefits and goodwill associated with the use of them outweigh their cost, and may ultimately shift business in your direction if you adopt early enough. Those businesses late to adapt may LOSE revenue, as their customers choose to give their dollars to establishments that embrace the change early.

Adoption of Plant-Based Meat Replacements Slows

Prior to 2020, we saw a large push for meat replacements including Beyond Meat; however, in the final days of 2019, this adoption slowed. Tim Horton’s removed their meat replacements from the menu, and other organizations slowed their marketing push for these products.

As we move through 2020, we expect this trend to continue, and as people will tend to stick to their comfort foods when life around them is uncertain. This does not mean that plant-based meat replacements will be disappearing completely, but the push for organizations to adopt them and market them heavily will slow and businesses will push products that are tried and true.

Smaller Menus

To pair with the smaller portion sizes, we expect to see menus shrink in size in order to make inventory a much more manageable task. In the past year, we have seen restaurants choosing to go with small menu sizes as opposed to the books used in the past by companies such as The Cheesecake Factory.

Having a smaller menu also means that restaurants are able to adapt and change their menu in a short period of time, as new ingredients become available, and others become unavailable, a chef can make the changes to one or two dishes, instead of reworking many different recipes. This smaller number of ingredients can also translate to making recipe and menu costing a much more efficient process.

Moving to Smaller Locations

As the trend of less people dining in at restaurants continues, we expect to see newer restaurants, or existing ones, looking at smaller locations as opposed to much larger ones that can seat as many covers as possible. By doing this, restaurateurs allow themselves to manage costs much more easily, as their required inventory will be lower.

This lower inventory ensures that there’s less wastage, greater inventory turnover, and inventory management becomes less time consuming. In addition to inventory, depending on the location, rent may be lower in these smaller locations, freeing up greater capital for room improvements, staffing, or kitchen upgrades.

As we can see, the restaurant and lounge world is seeing seismic shifts in how business is being done, from business models, to menus, to locations, everything is changing rapidly both out of willingness, and necessity. We’re less than halfway through 2020, and we look forward to seeing what the future holds for everyone in the industry!