Food and Beverage Control in Restaurants

There are primarily four Food Service categories that need to be controlled in a
restaurant.

1. Food Cost- Food cost is the cost incurred in preparing a dish. The
food cost includes the plate as well as the period cost. It includes the
cost of the raw materials utilized, such as meat, dairy, vegetables, grain,
spices, etc. Non-alcoholic beverages are also included in the Food Cost.
2. Beverage Cost- Beverage cost is the cost related to the alcoholic
beverages served in restaurant and bars.
3. Labor Cost- Labour Cost includes the expenses incurred in maintaining
the restaurant staff. It also consists of the taxes incurred on the payrolls
of the employees.
4. Other Expenses– Other expenses include all the other costs that are
incurred while running a restaurant. These can be utilities, rent, kitchen
equipment, etc.

1. Food Cost Control in Restaurants

The first step of food and beverage control is Food Cost Control. But before you
go ahead and take steps to control your Food Costs, you must analyze your actual
food expenses and your Food Cost Percentage. This can be deduced by using
predefined food and beverage cost control formulas.

Food Cost Percentage is the portion of sales that was spent on food expenses. The
cost of food sold divided by total sales gives you the Food Cost Percentage.

Once you know your exact food cost percentage, you can control your
restaurant’s Food Cost by following certain practices. These are:-

(i) Menu Item Forecasting

Menu item forecasting is an integral part of the Food and Beverage Control. Food
Cost Control begins with forecasting the menu. Forecasting the menu is
ascertaining the demand for different menu items. It is required to make
decisions regarding raw materials to be ordered, the workforce to be supplied,
time to be given, etc. Menu item forecasting will decrease your food waste and
save you the cost of labor and raw materials. Depending on your customer
psychology you must forecast your menu to ensure that your menu bolsters your
sales.

Only after understanding the requirements of a particular item should you decide
how much of a specific item should be prepared in your restaurant. You can
forecast the sales of a dish by calculating its Popularity Index.

Popularity Index= Total number of a specific menu item sold/ Total number of all
items sold
 Predicted Number of Item Sold= Number of guests to visit your restaurant X
Popularity Index

Save some unexpected surprises, it is usually quite easy to predict the number of
guests to visit your restaurant. The footfall depends on several factors that must
be taken into consideration, such quality of your service, competition in your
area, season, etc.

Over a period, you can predict the trend of footfall. Refer to the reports
generated by your POS software that would give you a detailed insight into the
amount of footfall in your restaurant, the busiest time of the day, the most
popular dish, etc. Also, try these 7 Pro Tips to Manage Restaurant Food Costs.

(ii) Standardized Recipes

Simply put, a standardized recipe consists of the detailed procedures to be used
in preparing and serving each of your menu items and is integral to Food and
Beverage Control. They give a set measure of the exact amount of ingredients to
be used, declare the number of servings, set portions for each meal, and of course
the preparation method. They are critical for controlling food and beverage costs
as even a slight imbalance in the servings, cascaded over a period could lead to
a severe dip of your margins.

Apart from controlling Food Costs, Standard Recipes also help in maintaining
consistency across multiple outlets. You can achieve recipe standardization
across numerous outlets and efficiently manage each by investing in
a POS software with a recipe management feature.

(iii) Inventory Management

Stocking up the inventory is the first thing that restaurant owners do to get the
operations going. However, managing the inventory is arguably the most
important part of Food and Beverage Control. Before you go and start stocking up
your inventory, you first need to define what inventory levels are needed in your
restaurant. That is, you need to have a clear understanding of how much stock of
which items would be needed in your restaurant kitchen, and for how long would
those items last. This comes from menu forecasting and yield management. When
you forecast your menu, you determine how much of a dish will be required.
When you manage yield per dish, you estimate how much raw material will be
necessary to avoid wastage. Both of them together will work towards your food
and beverage cost control by determining exactly how much inventory would be
needed.

You need to consider the storage capacity of your inventory and shelf life and
perishability of each item in mind before purchasing. This article will tell you more
about inventory management in your restaurant.
(iv) Purchasing
Much care needs to be given while purchasing inventory items or your food costs
might escalate. You need to have a list of all the items that need to be purchased
and how many to be purchased. You should also order enough to maintain a
steady supply so that you don’t run out of an item. Inventory Management
Software comes extremely handy in such cases. You can mark levels for each item
in the inventory, and set reminders in the POS software that would alert you
when the items run low, thus giving you ample time to order more. It is also
advised to order items in a ‘Purchase Group.’ Purchase Groups because of the
increased number of buyers gives you an edge over the supplier and so you can
bargain for the price better.

You must also adhere to the Product Specifications while purchasing Stock
Items. Product specifications primarily consist of the Product Name, Pricing Unit,
Standard Grade, Weight/Size, Desired Packaging, Container Size, etc.

Another factor that is crucial to Purchasing while keeping food and beverage cost
control in mind is the Product Yield. Product yield essentially gives the amount of
the item ordered that can be used for preparing the dish, that is, the Edible
Portion. You must also consider the Waste Percentage of the item. Few items can
be utilized whole while cooking; a significant portion is often lost while chopping,
trimming, and cooking. Fortunately, you can calculate this loss, and thus order
accordingly.

Waste Percentage is given by,

Waste Percentage= Product Loss/ Total Weight of the item when purchased.

(v) Vendor Management

Before you choose a vendor to supply the raw ingredients to your kitchen, you
need to have the Purchase Order. It is essential to have a Purchase Order (PO) for
all orders, no matter how trivial they are, and their records should be maintained.

Once you have the Purchase Order prepared, you need to decide a b vendor for
supplying the stock to your restaurant kitchen. It is better to purchase from the
same vendor to maintain the quality and taste of your food. Buying from the
same vendor at the same price also helps in keeping the Fixed Cost of your menu.
Also, to lower your purchasing costs order on credit instead of cash. That way you
can order more for a considerably lower price. You can easily manage all your
vendors through your restaurant POS.

(vi) Receiving
Receiving is one aspect of Food and Beverage control that is often overlooked,
but it is just as important. The maximum discrepancy in stock happens while
receiving the order. A not so honest employee may be tempted to steal from the
inventory while receiving the order. Dishonest employees are also known to often
strike an agreement with the Vendor and receive only half the amount of the
ordered items while pocketing the money of the entire order.

To reduce the possibility of thefts, you should ensure that the purchasing agent
and receiving clerk are two different individuals and that the entire purchasing
and receiving procedure is carefully monitored.

Receiving clerks should be adequately trained to verify the weight, quantity,

quality, and price of the products while collecting the stock items. They should be
adequately equipped with the necessary tools for weighing and measurement of
the stock.

(vii) Storage
All Food Costing and Control methods can go in vain if the stock items purchased
are not stored properly, as food items are highly perishable. You must follow
proper stocking practices to ensure longevity to the stocked goods. There should
be separate areas for storing dry, refrigerated, and frozen products. Storage can
be done in the following ways-

First In First Out: In this method, the items that are purchased first and consumed
first. The items that are purchased first are more likely to spoil than the items
purchased later. This method is preferred in cases of grocery, dairy, etc., and is
the most popular method of storage utilization.

Last In First Out: In this method, the items that are purchased last are consumed
first. The idea behind this storage is that certain items such as baked goods are
best consumed when fresh. Last in First Out method helps to maintain quality and
deliver high customer service.

The best way to store your inventory items is to ensure that the items are kept in
a cool, dry, and sterile place. The items should also be appropriately rotated.

2. Beverage Cost Control in Restaurants

The second part of the Food and Beverage Control is Beverage Cost Control. The
process of controlling Beverage costs is pretty much similar to Food Cost control.
Keeping a check on the Beverage Costs can be more tedious as overpouring, and
spilling is quite common and leads to inflated costs. You can track and control
your beverage cost using this formula:-

Cost of beverage sold/ Beverage sold= Beverage Cost percentage

(i) Forecasting Beverage Sales

When you predict the number of guests you will serve and the revenues they will
generate in a given future period, you have created a Beverage Sales forecast.
Doing so will provide you a clear picture of the costs that you are looking at so
that you can take definite steps to ensure there is no wastage or theft, and the
beverage cost is controlled.
(ii) Standardized Drinks and Recipe Portions
The most important aspect of controlling Beverage Costs is setting up a
Standardized drink recipe. You should also have a pouring policy through which
you can regulate the drink size. Standardized portions are essential, and tools
must be ensured to maintain the quality and quantity of the drink. Train your staff
to use measuring cups or jiggers to avoid overpouring.

Also, decide how you wish to serve different types of liquor. For example, do you
want to sell wine by the glass or by the bottle?

3. Labor Cost Control in Restaurants

The Restaurant Industry witnesses one of the highest attrition rates among all
sectors, especially at the junior level, leading to high overall restaurant costs. You
must be able to control your overall restaurant costs, to sustain your restaurant.
Several factors contribute to a high Labor Cost, making it a significant part of the
entire Restaurant Cost. Labor expense includes salaries and wages, but it consists
of other labor-related costs as well such as employee meals, training, uniform,
etc.

Calculate the Labor Cost Percentage of your restaurant using this formula-

Labor Cost Percentage: Cost of labor/ total sales

(i) Assessing and Managing Labor Productivity

While hiring employees for your restaurant, it is important first to determine the
number of staff you’ll be needing. However, it is not just sufficient to employ the
staff and expect everything to fall miraculously into place. You need to assess the
Productivity Ratio of each staff member to maintain a Productive Workforce.

Productivity standards represent what you should reasonably expect in the way of
output per unit of labor input. A productivity standard merely is management’s
expectation of the productivity ratio of each employee. Establishing productivity
standards for every employee is an essential management task and the first step
in controlling payroll costs.

Schedule employees using productivity standards and forecasted sales volume.

Output/Input= Productivity Ratio

Eg: 60 guests/4 servers= 15 guests per server

This article will tell you how to control the labor costs in your restaurant.

(ii) Ensuring Employee Productivity

Follow these tips to enhance employee productivity in your restaurant.
1. Employee selection- Selecting the right employees plays a vital part in
controlling costs. Create a clear Job Description and hiring criteria for each role
and sort the applications on its basis. Conduct detailed interviews and background
checks before getting anyone on board.

2. Training and Supervision- A trained employee is a productive employee. Before

a new employee joins the team, ensure that he/she has been thoroughly trained.
Do not hesitate from on-the-job training and even re-training if the need arises.
Supervise the tasks wherever possible, or assign your manager to oversee the
process.

3. Scheduling- Proper scheduling ensures that the correct number of employees is

available to do the necessary amount of work. If too many employees are
scheduled for a particular time, the productivity ratios will decline. If too few
employees are scheduled, customer service levels may suffer or necessary tasks
may not be completed on time or as well as they should be.

Scheduling efficiency can often be improved through the use of the split-shift, a
technique used to match individual employee work shifts with peaks and valleys
of customer demand.

4. Other Expenses Control

Apart from the Food, Beverage, and Labor, certain other expenses add up to the
overall Restaurant Costs. A lot of you may ask the question of how to control
restaurant costs with the least possible resources. These may seem trivial, but you
need to give just as much attention to these for Food and Beverage Control.
These can be categorized as Controllable and Non-Controllable, and Fixed and
Variable Costs. For example, rent is a Non-Controllable, fixed cost, while repairs
and maintenance are variable costs.

Food and Beverage Control is an integral part of restaurant operations, and the
points mentioned above of Food and Beverage Cost Control, Labor Cost Control,
and Other Costs. Keep track of all the expenses and do the needful to control
them to see how your entire restaurant operation blossoms.

TYPES OF RESTAURANT SERVICE

Table Service
In this type of service, the guests enter the dining area and take seats. The waiter
offers them water and menu card. The guests then place their order to the
waiter. The table is covered in this service. It is grouped into the following types.
English or Family Service
Here, the host contributes actively in the service. The waiter brings food on
platters, shows to the host for approval, and then places the platters on the
tables. The host either makes food portions and serves the guests or allows the
waiter to serve. To replenish the guests’ plates, the waiter takes the platters
around to serve or to let the guests help themselves. This is a common family
service in specialty restaurants where customers spend more time on premise.

French Service
It is very personalized and private service. The food is taken in platters and
casseroles and kept on the table of guests near their plates. The guests then help
themselves. It is expensive and elaborate service commonly used in fine dining
restaurants. This service has two variants −
 Cart French Service − The food is prepared and assembled at tableside. The
guests select food from the cart while sitting at their tables and are later
served from the right. It is offered for small groups of VIPs.
 Banquet French Service − The food is prepared in the kitchen. The servers
serve food on each individual’s plate from guest’s left side. For
replenishment, the servers keep the food platters in front of the guests.

Gueridon Service
In this service, partially cooked food from the kitchen is taken to the Gueridon
Trolly for cooking it completely. This partial cooking is done beside the guest
table for achieving a particular appearance and aroma of food, and for exhibiting
showmanship. It also offers a complete view of food. The waiter needs to
perform the role of cook partially and needs to be dexterous.

Silver Service
In this service, the food is presented on silver platters and casseroles. The table is
set with sterling silverware. The food is portioned into silver platters in the
kitchen itself. The platters are placed on the sideboard with burners or hot
plates. At the time of serving, the waiter picks the platter from hot plate and
presents it to the host for approval and serves each guest using a service spoon
and fork.

Assisted Service
Here, the guests enter the dining area, collect their plates, and go to buffet
counters and help themselves. The guests may partially get service at the table
or replenish their own plates themselves.

Buffet Service
It this type of service, the guests get plates from the stack and goes to buffet
counter where food is kept in large casseroles and platters with burners. The
guests can serve themselves or can request the server behind the buffet table to
serve. In sit-down buffet restaurants, the tables are arranged with crockery and
cutlery where guests can sit and eat, and thenreplenish their plates.
Self Service
In this type of service, the guests enter the dining area and select food items.
They pay for coupons of respective food items. They go to food counter and give
the coupons to avail the chosen food. The guests are required to take their own
plates to the table and eat.

Cafeteria Service
This service exists in industrial canteens, hostels, and cafeterias. The menu and
the space is limited; the cutlery is handed over to the guests. The tables are not
covered. Sometimes high chairs are provided to eat food at narrow tables. It is a
quick service.

Single Point Service

In this type of service, the guest orders, pays for his order and gets served all at a
single point. There may be may not be any dining area or seats. The following are
the different methods of Single Point Service.

Food Court
This is an array of autonomous counters at which the customers can order, eat,
or buy from a number of different counters and eat in adjacent eating area.