Strategic menu engineering for a profitable establishment

By: Mary Pennington, Communications Manager, MenuMax

When it comes to food costing, it all boils down to strategic menu engineering. Though I’m sure every chef hopes for all of his or her recipes to be loved and vastly popular among every patron that walks through the door, the reality is that some menu items just might not make the cut. So at what point do we determine that an item must be permanently taken off the menu, or revisited for potential changes?

In an insightful, yet very mathematical article on the Food Buyers Network , the author goes into intricate detail regarding the formulas on perfect menu engineering. They mention that there are four main categories that each item will fall into:

  1. “Stars” are those menu items that are both the most popular and the most profitable. These are often house specialties and are the menu items that you want to sell most frequently due to their high contribution margin.
  2. “Plowhorses” are menu items that are above average in popularity, but not in profitability.  Overall, these items produce consistent profit for the business, but are not stars because their contribution margin is below average.
  3. “Challenges” are the converse of plowhorses.  They are highly profitable menu items, but not very popular.
  4. Finally, “Dogs” are those items that are neither popular nor profitable, in comparison to your other menu items.  Serious consideration should be given to eliminating these items from the menu.

Ultimately, the secret to keeping your food costs as low as possible, and your profits as high as possible, is to understand how to recognize these four categories, and decide how to position these items to create the most efficient menu at any given time. The challenge in the restaurant business is that the chef must continuously attempt to please as many people as possible and keep their unique interests and dietary needs in mind, while making sure they make enough profit off of each item. Not just an artwork for many anymore, it really is a tough job. But somebody’s got to do it! So let the food tasting and testing begin!

Source: “Menu Engineering: Food Cost Control” Posted by Food Buyers Network on Tue, Jun 15, 2010

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