Supply-Chain Management in Food

Production Process
Course Code : SV435_Restaurant Menu Engineering
Menu Engineering
Prepare by Tachaphon S.
เราจะทาให้ มือ้ นีข้ องคุณ “ดีท่สี ดุ ” Bar B Q Plaza Thailand
 Menu Engineering Outline
• What is menu engineering ?
• Why do we need it ?
• When is the right time?
• Where to start ?
– Step 1: Utilization Index
• Extract all menu items and ingredients in the restaurant
• Find correlation and be surprised !!!
• How to improve utilization index
– Step 2: BCG Matrix
• Find and update standard recipe and food cost
• Analyze sales and transactions of each category
• Plot a graph into 4 strategic quadrants
• BCG matrix approach to price increase strategy
– Step 3: “In – Out – Adjust” List
– Step 4: Menu Makeover
• Menu design tips
• Menu localization guideline
• Sharing the result
 What is menu engineering?
Is Your Menu Generating as Much Margin as it Should?
A common method of analyzing and optimizing menu performance, applying strategic
directions to achieve a simple goal, to maximize profit.
Have menu doesn't mean it can make profit
many
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 Why do we need it?
Benefits
• Increase sale by repositioning of menu as result of
BCG matrix analysis and menu makeover design

• Reduce waste of ingredients as a result of improving utilization index

• Simplify cooking process from lesser ingredients to prepare, more storage space,
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• Maximize efficiency of supporting unit by focusing only on things that generate profits
(purchasing, logistic, warehouse)
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Expected Outcome
• A refined printed menu on customer table that can increase
profit of the restaurant

Stephen Covey
One Day At Everyone's Favorite Chain Restaurant: Panda Express
 When is the right time?
• Menu management is a process, not an event.

• Menu should be reviewed and adjusted frequently

(minimum of every year) to ensure that they are
relevant, pricing and marketing strategies are still
appropriate.

• Customer preferences change over time and what was successful last year
won’t necessarily be successful tomorrow.

Key take out

• Start now
 Where to start?
Step 1: Utilization Index
Utilization index is an indicator of ingredients utilization. Wastage can be minimize
by boost up the utilization rate.
Menu items
= Utilization Index
Ingredients SKU

Extracting all menu items and food ingredients in the

restaurant Key take out
• Know your index
For example, BPT has 120 menus and 137 ingredients SKU • The higher, the more utilize
• The index of restaurants can be different
(e.g. casual dining, fast food)
Menu items 120 = Utilization Index • Benchmarking to BPT , the index is in
0.88 range 0.80 – 1.00
Ingredients SKU 137
 Step 1: Utilization Index
Find correlation and be surprised !!!
Combine transaction / Transaction
SKU name Menu, containing the SKU
year / day / store
Jasmine rice Garlic fried rice + Steamed rice 5,695,168 164.24
Garlic fried rice + Salad + Shrimp salad + Fried bacon + Eringi wrapped
Chopped carrot 4,380,443 126.33
Top bacon

5 usage Spring onion

Garlic fried rice + Fried pork neck +
4,080,775 117.69
Eringi with soy sauce

Fried sliced garlic Garlic fried rice 3,841,403 110.78

Fried chopped garlic Garlic fried rice 3,841,403 110.78

Pineapple juice Pineapple juice 22,786 0.66

Frozen assorted bean in syrup Cold & hot assorted bean in syrup 16,064 0.46

Bottom 5 Coffee sachet Hot coffee 2,627 0.08

usage Creamer sachet Hot coffee 2,627 0.08

Sugar sachet Hot coffee 2,627 0.08

Key take out

• Understand the top and bottom usage ingredients
• Recognize specific and versatile (multiple use) ingredients
 Step 1: Utilization Index
How to improve utilization index

Reduce number of ingredients SKU

• Remove ingredients with low usage or replace with other Key take out
ingredients • Firstly, focus on low usage
ingredient and low sale menu.
• Remove low sale menu, then result in reduce amount of • Then, introducing new menu
ingredients can be guided by the BCG
matrix.
Increase number of menu by introducing new menu that use
current ingredients
Step 2: BCG Matrix
BCG Matrix is a model based on product life cycle theory that can be used to determine priorities to be
given in the product portfolio.

It can help prevent a “one size fits all” strategy mistake.

Definition
in lores
High margin / High
Star
transaction

Low margin / High

Cash cow
transaction

Question High margin / Low

mark transaction

Low margin / Low

Dogs
transaction
 Step 2: BCG Matrix
Standard recipe and food cost
Last update:

Prepare by: Menu

Picture
Menu name:

Service plate:
Key take out
Cost per unit, include yield loss
• Find and update
Code Ingredients Quantity Unit Food cost (Bht)
(Bht) • Recipe
XXX Cabbage slice 0.100 G 48 Kg. 4.80 • Selling price
XXX Pork slice 0.120 G 280 Kg. 21.60 • COGS
XXX Bacon 0.050 G 180 Kg 9.00 • Margins
XXX White shrimp 0.050 G 350 Kg 17.50

Selling price 199

COGS (Baht) 52.90

COGS (%) 26.50 %

Margins (Baht) 146.10

Margins (%) 73.50 %

Step 2: BCG Matrix
Analyze sales and transactions of each product categories

Key take out

• Categorized menu

• Transaction record
yearly

• Sales record
yearly
 Step 2: BCG Matrix
Plot a graph by giving
Y bar = Transaction
X bar = Margin Strategy
Then find mean to create intersect
- Highlight in menu to
Star
maintain Star

- Push to Improve margin

- cost reduction
Cash cow - develop new
A la carte menu based on
what customer like

- Try promotion
Set menu Beverages - Improve the product
Question mark - Reduce selling
price to stimulate
transaction

- Improve the product

Special items - No need for promotion
Dogs
Dessert - Reduce priority in menu
- Remove
 Key take out
• Find your star and
Step 2: BCG Matrix cash cow
• Make decision

Economy pork set

Family pork set

Supreme pork set

Miso pork set

Economy beef set

Family pork & beef set Supreme beef & pork set
Family beef set Healthy set
Miso beef set
Supreme beef set
 Step 2: BCG Matrix
BCG Matrix approach to price increase strategy

1. Remain price of high transaction menu and increase price of the rest . Customer
won’t be shocked with new price of their favorite menu.

Key take out 2. Pick up the highest transaction menu and increase price. (e.g. Garlic fried rice,
bottled water)
Customer might not feel the increase in overall
• Use BCG to
menu.
customize pricing
strategy

• Price per piece of After the price increase,

key ingredients
should be • If the menu stay in the same BCG position,
considered It can be assumed customer is satisfied, willing to pay more.

• If the menu falls into different BCG category,

price is already extended to reach its limitation.
 Step 3: “In – Out – Adjust” List

Category: Beverages In Out Adjust SKU (+ in, - out)

Coffee sachet -
Hot coffee - Creamer sachet -
Sugar sachet -
Grape juice - Grape juice -
Pineapple juice - Pineapple juice -
Apple juice - Apple juice -
Lime juice soda +
Plum juice soda +

Category: Dessert In Out Adjust SKU (+ in, - out)

Fruity jelly - Fruity jelly -
Frozen assorted bean in syrup
(Hot & Cold)
- Frozen assorted bean in syrup -
Strawberry ice cream - Strawberry ice cream -
Ice cream (Vanilla, Green tea, Chocolate) Remove chocolate sauce Chocolate sauce -
Thai iced tea float +
 It’s time to evaluate Utilization Index
Before After
Menu Items 120 Menu Items 125
= 0.88 = 0.97
Ingredients SKU 137 Ingredients SKU 128
 Step 4: Menu Makeover
Menus are the most important marketing tools on customer table. It should be designed to optimize
their selling potential.

Menu Psychological approach to attract customer to order what

Design restaurant want
Tips
(e.g. high margin, easy preparation)
The Secret Tale ‘เรื่องเล่ามังกรเฝ้าร้าน’ - Bar B Q Plaza 30 years
 Secret advice from the Bar B Customer spends only 2 minutes to
looks at menu before making decision
Gon King

1 Avoid putting price unit symbol (e.g. Baht, Dollar)

2 Avoid highlight, bold the price number or dotting line to price

3 Hide price number among letters

Use smaller size number than letters. Because number will always give bigger
4
feeling than letters at equal size
Now, You are ready, Bar
5 Romance the menu details
B Gon

6 Location is everything… Find Sweet Spot

Use box, bold font, highlight, big picture to attract attention to high profit items
7

Credit: What is menu engineering? The Restaurant Boss

1 Avoid putting price unit symbol (e.g. Baht, Dollar)

Avoid highlight, bold the price number or dotting line to price

2

Key take out

• Design menu
that make
customer focus
what they want
to eat, not what
they can afford.
3 Hide price number among letters

4 Use smaller size number than letters. Because number will always give bigger feeling
than letters at equal size
5 Romance the menu details
6 Location is everything… Find Sweet Spot
 7 Use box, bold font, highlight, big picture to attract attention

No price unit, no dot line, hide the price number among letters SWEET SPOT

Romance the menu details Use symbols to attract attention

Credit: http://alifakih.com/work/chilis-no-one-does-it-like-chilis/
Sample of BPT menu design
Sample of BPT menu design
Sample of BPT menu design
Sharing the result of BPT
 Objective of Menu Design

1. Food Presentation is WOW , can’t resist

2. Food Presentation for all menu

3. Plus Sales by switching Side Dish to front section

, highlight Side Dish to gain customer awareness

4. Bold recommend and new menu to high margin menu

Executive Summary
Comparing Year on Year Net Sales

+10.7% +15.4% +10.9% +5.8%

StickGon Sales :
149,004,691 B
 %Contribution of BBQ By Category

Jan – Mar vs Apr 2015 Unit Sold

+18.1% Growth

1,984,556 2,344,749
0.2%

0.1%

42%
47%

28%
27%

1% 1%

12% 12%
6%
13% 10%
 %Contribution of Side dish
Jan – Mar vs Apr 2015

AVG Jan-Mar (30 Days) Apr-15 %Growth

Net Sales Unit Net Sales Unit Net Sales Unit
Side dish 2015 15,839,405 241,829 19,815,559 272,137 25% 13%

2014 2015 %Growth

Side dish Net Sales Unit Net Sales Unit Net Sales Unit
April (30 Days) 18,985,335 260,763 19,815,559 272,137 4% 4%
 %Contribution of Side dish
Jan – Mar vs Apr 2015 ( Bold Item)

เกี๊ยวซ่าทอด เห็ดทอดสามสหาย

Unit sold Net sales Unit sold Net sales

Jan-Mar : 15% (37,279) Jan-Mar : 12% Jan-Mar : 5% Jan-Mar : 5%
Apr : 11% (30,197) Apr : 11% Apr : 10% Apr : 10%
Diff : -4% Diff : -1% Diff : +5% Diff : +5%
(Member : 95,762)

ไก่ทอดกระเทียมกรอบ
Unit sold Net sales
Jan-Mar : 3% Jan-Mar : 3%
Apr : 4% Apr : 5%
Diff : +1% Diff : +2%
 %Contribution of Side dish
Jan – Mar vs Apr 2015 ( Bold Item)
กุ้งชุบแป้ งทอด
เห็ดทอดสามสหาย

Unit sold Net sales Unit sold Net sales

Jan-Mar : 4% Jan-Mar : 4% Jan-Mar : 0% Jan-Mar : 0%
Apr : 6% Apr : 7% Apr : 4% Apr : 3%
Diff : +2% Diff : +3% Diff : +4% Diff : +3%

ยารวมเห็ด สลัดผัก

Unit sold Net sales Unit sold Net sales

Jan-Mar : 0% Jan-Mar : 0% Jan-Mar : 2% Jan-Mar : 2%
Apr : 6% Apr : 5% Apr : 1% Apr : 1%
Diff : +6% Diff : +5% Diff : -1% Diff : -1%
 %Contribution of Side dish
Jan – Mar vs Apr 2015 ( New Item)

มันฝรังทอด
่ มันฝรังทอดซอสวาซาบิ
่ คานิ

Unit sold Net sales Unit sold Net sales

Jan-Mar : 0% Jan-Mar : 0% Jan-Mar : 0% Jan-Mar : 0%
Apr : 2% Apr : 2% Apr : 1% Apr : 1%
Diff : +2% Diff : +2% Diff : +1% Diff : +1%

สลัดกุ้งทอด
Unit sold Net sales
Jan-Mar : 0% Jan-Mar : 0%
Apr : 1% Apr : 1%
Diff : +1% Diff : +1%
 %Contribution of
Dessert
Jan – Mar vs Apr 2015

AVG Jan-Mar (30 Days) Apr-15 %Growth

Net Sales Unit Net Sales Unit Net Sales Unit
Dessert 2015 1,298,068 25,075 1,630,801 29,088 26% 16%

2014 2015 %Growth

Dessert Net Sales Unit Net Sales Unit Net Sales Unit
April (30 Days) 1,483,254 27,679 1,630,801 29,088 10% 5%
 ไอศครีมชาเขียวถั่วแดง

Unit sold ถั่วแดงเย็น

Jan-Mar : 8%
Apr : 11% Unit sold
Diff : +3% Jan-Mar :6%
Apr : 14%
Net sales
ไอศครีมวนิลา Jan-Mar : 9%
Diff : +8%
Apr : 11% Net sales
Diff : +2%
ไอศครีมช็อคโกแลต Jan-Mar : 7%
Apr : 15%
Diff : +8%
Unit sold
Jan-Mar : 6%
Apr : 9%
Diff : +3%
Unit sold
Jan-Mar : 7% Net sales
Apr : 9% Jan-Mar : 5%
Diff : +2% Apr : 7%
Diff : +2%
Net sales
Jan-Mar : 5%
Apr : 7%
Diff : +2%
Thank You