3.1: Controlling Food Costs
Food service establishments are businesses. In order to stay in business, everyone involved with the enterprise should have at least a basic idea of how costs are determined and how such costs have an impact on an operating budget.
Food costs are controlled by five standards to which all employees and managers must adhere:
- Standard purchase specifications
- Standard recipes
- Standard yields
- Standard portion sizes
- Standard portion costs
To calculate the cost of each item, you need to understand the relationship between standardized recipes , standard portions, and yield tests. All of these play a role in calculating the cost of each item on your menu.
After goods are ordered, there should be no surprises when the goods arrive. The more specific the order, the less the chance of receiving supplies that are too high in price, too poor in quality, or too many in number.
Specifications can include brand names, grades of meat, product size, type of packaging, container size, fat content, count per kilogram, special trimming, and so on. The specifications should be specific, realistic, and easy to verify.
Precise specifications can:
- Reduce purchasing costs as higher quality products need not be accepted
- Ensure constant quality in menu items
- Allow for accurate competitive bidding among suppliers and so reduce costs
Specifications usually do not include general delivery procedures or purchase price. Directions and prices can change quickly. Specifications should be well thought out and are usually not subject to quick change.
Standardized Recipes
A standardized recipe is one that holds no surprises. A standardized recipe will produce a product that is close to identical in taste and yield every time it is made, no matter who follows the directions. A standardized recipe usually includes:
- A list of all ingredients including spices and herbs
- Exact quantities of each ingredient (with the exception of spices that may be added to taste)
- Specific directions for the order of operations and types of operations (e.g., blend, fold, mix, sauté)
- The size and number of portions the recipe will produce
Standard Yields
The yield of a recipe is the number of portions it will produce. Standard yields for high-cost ingredients such as meat are determined by calculating the cost per cooked portion. For example, a 5 kg roast might be purchased for $17 a kilogram. The cooked roast is to be served in 250 g portions as part of a roast beef dinner. After trimming and cooking, the roast will not weigh 5 kg, but significantly less. By running a yield test , the cost per portion and unit weight, and the standard yield and yield percentage, can be determined.
Standard Portions
A standard recipe includes the size of the portions that will make up a serving of the recipe. Controlling portion size has two advantages in food management: portion costs for the item will be consistent until ingredient or labour costs increase, and customers will receive consistent quantities each time they order a given plate or drink.
Standard portions mean that every plate of a given dish that leaves the kitchen will be almost identical in weight, count, or volume. Only by controlling portions is it possible to control food costs. If one order of bacon and eggs goes out with six rashers of bacon and another goes out with three rashers, it is impossible to determine the actual cost of the menu item.
Adhering to the principles of standard portions is crucial to keeping food costs in line. Without portion control, there is no consistency. This not only could have drastic effects on your food costs (having no real constant costs to budget for) but also on your customers. Customers appreciate consistency. They expect that the food you prepare will taste good, be presented properly, and be the same portion size every time they order it. Consider how the customer would feel if the portion size fluctuated with the cook’s mood. A cook’s bad mood might mean a smaller portion or, if the cook was in a good mood because the work week was over, the portion might be very large. It may be hard to grasp the importance of consistency with one single portion, but consider if fast-food outlets did not have portion control. Their costs as well as their ordering and inventory systems would be incredibly inaccurate, all of which would impact negatively on their profit margin.
Strict portion control has several side benefits beyond keeping costs under control. First, customers are more satisfied when they can see that the portion they have is very similar to the portions of the same dish they can see around them. Second, servers are quite happy because they know that if they pick up a dish from the kitchen, it will contain the same portions as another server’s plate of the same order.
Simple methods to control portion include weighing meat before it is served, using the same size juice glasses when juice is served, counting items such as shrimp, and portioning with scoops and ladles that hold a known volume. Another method is using convenience products. These products are received usually frozen and are ready to cook. Portions are consistent in size and presentation and are easily costed out on a per unit basis. This can be helpful when determining the standard portion costs.
Note : Using convenience products is usually more costly than preparing the item in-house. However, some chefs and managers feel that using premade convenience products is easier than hiring and training qualified staff. But always keep in mind that if the quality of the convenience item is not comparable to an in-house made product, the reputation of the restaurant may suffer.Standard portions are assured if the food operation provides and requires staff to use such tools as scales, measured ladles, and standard size scoops. Many operations use a management portion control record for menu items, similar to the one shown in Figure 8. The control record is posted in the kitchen so cooks and those who plate the dishes know what constitutes standard portions. Some operations also have photographs of each item posted in the kitchen area to remind workers what the final product should look like.
Figure 8: Portion control record
| Item | Purchased Size | Yield % | Cooked Yield | Portion Size | No. of Portions |
|---|---|---|---|---|---|
| Baked ham | 6-7 kg | 50% | 3.0-3.5 kg | ||
| Lunch | 50 g | 60-70 | |||
| Dinner | 85 g | 35-41 | |||
| Prime rib | 9-12 kg | 40% | 3.6-4.8 kg | 150 g | 24-32 |
| Fillet of sole | 500 g | 100% | 500.0 g | ||
| Lunch | 50 g | 10 | |||
| Dinner | 85 g | 6 | |||
| Potatoes: | 50 kg | ||||
|
75% | Peeled – 37.5 kg | 100 g | 375 | |
|
56% | Peeled – 28.0 kg | 100 g | 280 | |
| Daily veg | 5 kg | ||||
| Green beans | 80% | Trimmed – 4 kg | 50 g | 80 | |
| Carrots | 80% | Peeled – 4 kg | 50 g | 80 |
Standard Portion Costs
A standard recipe served in standard portions has a standard portion cost. A standard portion cost is simply the cost of the ingredients (and sometimes labour) found in a standard recipe divided by the number of portions produced by the recipe. Standard portion costs change when food costs change, which means that standard portion costs should be computed and verified regularly, particularly in times of high inflation. If market conditions are fairly constant, computing standard portion costs need not be done more than every few months.
Details about recipe costs are not usually found on a standard recipe document but on a special recipe detail and cost sheet or database that lists the cost per unit (kilogram, pound, millilitre, ounce, etc.) and the cost per amount of each ingredient used in the recipe or formula.
The standard portion cost can be quickly computed if portions and recipes are standardized. Simply determine the cost of each ingredient used in the recipe and ingredients used for accompaniment or garnish.
The ingredients in a standard recipe are often put on a recipe detail sheet (Figure 9). The recipe detail sheet differs from the standard recipe in that room is provided for putting the cost of each ingredient next to the ingredient. Recipe detail sheets often have the cost per portion included as part of their information, and need to be updated if ingredient costs change substantially. They can also be built in a POS system database or spreadsheet program that is linked to your inventory to allow for the updating of recipe costs as ingredient costs change.
Figure 9: Menu item – Seafood Newburg
Yield:
10 portions
Portion size:
125 g of seafood
Selling price:
$12.99
Cost/portion:
$4.07
Food cost %:
31.3%
| Ingredients | Quantity | Units | Cost/Unit | Extension |
|---|---|---|---|---|
| Lobster meat | 500 g | kg | $38.00 | $19.00 |
| Scallops | 250 g | kg | $25.00 | $6.25 |
| Shrimps | 250 g | kg | $14.00 | $3.50 |
| Sole | 250 g | kg | $8.50 | $2.13 |
| Cream, heavy | 250 mL | L | $4.00 | $1.00 |
| Fish Velouté | 750 mL | L | $1.00 | |
| Butter | 250 g | 500 g | $2.85 | $1.43 |
| Pepper and salt | ||||
| Paprika | 5 g | $0.15 | ||
| Sherry | 250 mL | 750 mL | $12.00 | $4.00 |
| Egg yolks | 6 | 12 | $2.00 | $1.00 |
| Patty shells | 10 | each | $0.12 | $1.20 |
| Total | $40.66 |
Procedure: Quarter the scallops, dice the lobster meat, halve the shrimps, and chop the sole before sautéing well in melted butter. Add sherry and simmer for a few minutes. Add the fish velouté sauce and paprika and continue to simmer. Combine the egg yolks and the heavy cream before adding them slowly to the simmering pan. Season to taste with salt and white pepper. Serve in patty shells.
Note that the portion cost and selling price used in Figure 9 is for the Seafood Newburg alone (a true à la carte price) and not the cost of all accompaniments found on the plate when the dish is served.
For example, the cost of bread and butter, vegetables, and even garnishes such as a wedge of lemon and a sprig of parsley must be added to the total cost to determine the appropriate selling price for the Seafood Newburg.
Costing Individual Items on a Plate
If you need to determine the total cost of a plate that has multiple components, rather than a recipe, you can follow the procedure in the example below.
Example 11
Standard order of bacon and eggs: the plate contains two eggs, three strips of bacon, toast, and hash browns.
The cost of ingredients used for accompaniment and garnish can be determined by using the standard portion cost formula, which is the purchase price of a container (often called a unit) divided by the number of portions in the container. That is,
standard portion cost = unit cost ÷ portions in the unit
An example is a carton of eggs. If eggs cost $2.00 a dozen and a standard portion in a menu breakfast item is two eggs, the standard portion cost can be found.
Recall the equation:
standard portion cost = unit cost ÷ portions in the unit
Now, find the portions in the unit.
portions in the unit = number in unit ÷ number in a portion
= 12 ÷ 2
= 6
That is, there are six 2-egg portions in a dozen eggs.
Substitute the known quantities into the equation.
standard portion cost = unit cost ÷ portions in unit
= $2.00 ÷ 6
= $0.33
You could get the same answer by calculating how much each egg in the dozen is worth ($2.00 ÷ 12 = $0.17) and then multiplying the cost per egg by the number of eggs needed ($0.17 × 2 = $0.34). No matter what method is used, the standard portion of two eggs in this order of bacon and eggs has a standard portion cost of $0.34.
You can find the standard portion cost of the bacon in the same way. If a 500 g package of bacon contains 20 rashers and costs $3.75, the standard portion cost of a portion consisting of four rashers can be found quickly:
portions in the unit = 20 ÷ 4
= 5
standard portion cost = unit cost/portions in unit
= $3.75 ÷ 5
= $0.75
The bacon and eggs on the plate would have a standard portion cost of $1.09. You could determine the cost of hash browns, toast, jam, and whatever else is on the plate in the same manner.
Often, restaurants will serve the same accompaniments with several dishes. In order to make the costing of the entire plate easier, they may assign a “plate cost,” which would include the average cost of the standard starch and vegetable accompaniments. This makes the process of pricing daily specials or menu items that change frequently easier, as you only need to calculate the cost of the main dish and any specific sauces and garnishes, and then add the basic plate cost to the total to determine the total cost of the plate.
Figures 10 and 11 provide an example for calculating the basic plate cost and the cost of daily features.
Figure 10
| Mashed potatoes, one serving | $0.50 |
| Mixed vegetables, one serving | $0.75 |
| Demi-glace, one serving | $0.30 |
| Herb garnish | $0.20 |
| Total basic plate cost | $1.75 |
Figure 11
| Day | Feature | Feature Cost per Portion | Basic Plate Cost | Total Cost |
|---|---|---|---|---|
| Monday | Roast beef | $5.00 | + $1.75 | = $6.75 |
| Tuesday | Pork chop | $3.75 | + $1.75 | = $5.50 |
| Wednesday | Half roast chicken | $4.00 | + $1.75 | = $5.75 |