11.4: Classroom preparation assignments

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Pricing the Menu Exercise $\PageIndex{1}$

Introductory paragraph
Standardized recipes
Method(s) of menu pricing’
Product mix
Product availability
Menu pre-cost

Pricing Example

Pricing Objectives

Our menu requires specialized research and equipment to execute. Therefore, while we want to make a profit, we have to try and recouping the costs first. We also want to be seen as high class, so we have to raise our prices a little. Overall, the menu is priced with a “Status Quo” objective in mind. On the other hand, some of our dishes are priced a little low. This is to encourage their sale. For example, our clarified gazpacho is only 10 dollars. Of the small plates, it has the smallest active time, and can be made well in advance. While we will not be losing money on a bowl, net profit per bowl will only be about 4 dollars.

Standardized Recipes

For our restaurant, consistency will be one of our biggest concerns. For this reason, we will be using standardized recipes, formatted in the same way, using the same units throughout. This way, we can have minimal confusion. The recipes will also have a standard yield in both volume and projected number of orders. All of our food on the menu will be single serving plates. This way, cooks can gauge how much of a recipe they need to make based on the number of reservations. Recipes will have 1x, 2x, and 3x batch ingredient lists in a table format in order of use, this way scaling will not be an issue. Properly trained cooks working with tested recipes will reduce our food costs. Another reason that we will need standardized recipes is that most of the complex pieces of the menu require very fine technique and attention to detail.

Food costs become predictable through standardized recipes. From there we can determine profit per plate. This number does not take labor and other factors into account. However, we can use them to estimate how much money we will make from food sales on this hypothetical night, $5289.00.
Labor Requirements

Our goal is to be highly specialized, which will require greater labor costs. Molecular gastronomy is a time consuming and highly detailed art. Our line cooks, prep cooks, and even our servers have to be educated on each dish. On top of the scientific processes involved, we also need to fabricate items like grouper, swordfish, and ribeye. On a lighter note, much of the prep involved with our menu must be done before service, and then it can be held, through sous vide, steam tables, or lowboys. During the summer, we will not do tableside service; that is one of the goals for the winter menu, though.

Projected Menu Mix

The following table shows the presumed number of small plates, entrees, and desserts sold on an average Friday night, assuming we serve 170 people. Included is the projected food cost and profit per plate. The menu mix will calculate by price, personal experience, buying habits, etc.

Small Plate	Price	Food Cost per Plate	FC%	Profit per Plate	# Sold	Gross Profit	Menu Mix
Gnocchi	$16.00	$6.08	38%	$9.92	21	$208.32	11%
Halloumi	$13.00	$4.81	37%	$8.19	17	$139.23	9%
Bone Marrow	$18.00	$9.36	52%	$8.64	13	$112.32	7%
Pork Belly	$15.00	$6.15	41%	$8.85	34	$300.90	17%
Gumbo	$12.00	$5.88	49%	$6.12	11	$67.32	6%
Gazpacho	$10.00	$5.70	57%	$4.30	26	$111.80	13%
Watermelon	$13.00	$3.77	29%	$9.23	30	$276.90	15%
Chopped	$15.00	$4.05	27%	$10.95	27	$295.65	14%
Strawberry	$16.00	$5.28	33%	$10.72	16	$171.52	8%
Average:	$14.22	$5.68	40%	Total:	195	$1,683.96	100%

Entrée	Price	Food Cost per Plate	FC%	Profit per Plate	# Sold	Gross Profit	Menu Mix
Scallops	$39.00	$14.82	38%	$24.18	11	$265.98	7%
Grouper	$31.00	$13.33	43%	$17.67	23	$406.41	15%
Swordfish	$33.00	$16.50	50%	$16.50	19	$313.50	12%
Ribeye	$28.00	$6.72	24%	$21.28	32	$680.96	20%
Lamb	$26.00	$7.02	27%	$18.98	20	$379.60	13%
Porkchop	$31.00	$11.16	36%	$19.84	14	$277.76	9%
Duck	$27.00	$12.69	47%	$14.31	29	$414.99	18%
Chicken	$24.00	$10.32	43%	$13.68	9	$123.12	6%
Average:	$29.88	11.57	39%	Total:	157	$2,862.32	100%
Desserts	Price	Food Cost per Plate	FC%	Profit per Plate	# Sold	Gross Profit	Menu Mix
Confections	$ 14.00	$2.10	15%	$11.90	12	$142.80	18%
Milk & Honey	$ 10.00	$3.00	30%	$7.00	16	$112.00	24%
Sundae	$ 13.00	$1.56	12%	$11.44	21	$240.24	31%
Gin Alexander	$ 16.00	$2.24	14%	$13.76	18	$247.68	27%
Average:	$ 13.25	$2.23	18%	Total:	67	$742.72	100%

Ingredient Availability

As this menu centers on the summer season, we know that we can get most of the product on a regular basis. We may have to change the fish from week to week, depending on what is available. The supply of lamb, scallops, ribeye, and pork are reliable. From there, the only thing to worry about is
the “chef selection” based menu items. Of most importance is the market salad, which will require split second creativity. We may use it to test product from a potential supplier, or perhaps to push some product on the edge of salability. We will prepare all of our desserts are made in-house and rely on
simple ingredients always available.

Other Factors

There are other pricing possibilities. Private parties and the Chef’s Table pricing will occur on a flat rate per person. The drink sales for the bar will offer a wide variety to the overall revenue. On specialty order items like allergies, special accommodations, etc. we will have to price it separately from off of the menu. This will require cooperation from FOH and the chefs. We will price slightly above our competitors in some areas, and below in others. Priced competitively, this should give us at least a foot in the market. If we can use price alterations and our patrons will accept an increase, or if our bottom
line can take the decrease, then we will.

Conclusion

With a limited summertime menu, we still intend to sell good food. We are offering our menu with food and equipment costs behind the pricing. This menu is set to take advantage of modern food preparation techniques and the season products available in New Orleans. Through proper training and
careful execution, we can make some dining memories.

Discussion Questions $\PageIndex{2}$

What are the five main factors that affect pricing decisions?
Meal components have value. A product may represent only one portion of the total desired benefit. Explain how this works.
How do economic factors affect customer reaction to pricing?
If you were pricing for ‘cash flow’ what action, would you take?
What is ‘status quo’ pricing attempting to achieve?
What is pricing for ‘survival’?
How could you utilize ‘price fences’?
What would be the importance of ‘duration control’?
What is contribution margin? Why is it important