Reducing Food and Beverage Costs
By Amy Bair Career Services Analyst, Florida International University's Chaplin School of Hospitality and Tourism Management | July 28, 2013
This new hopeful economy is giving hoteliers incentive to innovate. What are they experimenting with? How to reduce waste and overhead without alienating customers. Also, how to affordably differentiate in a manner that makes the property appealing to prospective customers/guests? In a presentation from the 2010 AHLA Fall conference, a VP of Food and Beverage stated "We've had a few years to sharpen our pencils, now we have to sharpen our creative pencils, or we'll be behind the curve."
In 2009, Cornell produced a downloadable teaching series titled "The Eight-Step Approach to Controlling Food Costs." This series comes with a self-assessment workbook, participant and trainer guide so you can educate your staff to better control costs in your food and beverage department.
According to J. Bruce Tracey, the author, food costs can take up 40% of your operating budget. Best practices are emphasized in the series.
The first one discussed is ordering. "Order only one what you need." Over-ordering will cause staff to find methods for using the excess food thus increasing the cost of your recipes. This can also lead to increased employee theft. We know instinctively the repercussions of under-ordering. We have all experienced the frustration of visiting a restaurant only to find out our favorite meal is unavailable because they ran out of an ingredient. Sending an employee to the store to buy said item holds its own additional expenses.
How to solve this? Keep diligent track of inventory. Create an inventory sheet with par amounts. Order your food according to par. Additionally, track purchase orders to ensure your deliveries and invoices are accurate. Remember to include staple items such as coffee, paper and condiments.
Another benefit to tracking inventory is you can forecast supply and demand. Why is this important? How about an example? Every December, you hold a Sunday brunch where you offer $1 mimosas. Last year, you sold 2000 mimosas. You would have sold more but you ran out of orange juice and had to make a store run. This also dipped into your profit as retail price for oj is more than you typically pay. Additionally, a server was pulled off the floor to make the trip which caused a bottleneck in serving and created frustration for your guests.