How do restaurant managers keep the most precise account of food cost? In a complex, constantly changing business with evolving menu items and consumer demands, the answer is a simple menu explosion sheet. A menu explosion precisely calculates the cost of each entrée or menu item based on the ingredients. It should be created on a spreadsheet program such as Microsoft Excel.
It is called an explosion because it takes an individual entrée (a seafood platter, for example) and explodes out all of the ingredients on a spreadsheet (this might include scallops, shrimp, and crab). Formulas are added into cells of a spreadsheet, so that an operator merely needs to input the number of items sold to yield the amount and cost of each ingredient sold. In our hypothetical example, ten seafood platters sold might equate to the use of thirty scallops, thirty U-10 shrimp, and thirty 3-oz. crabcakes.
A menu explosion can be simple or it can be much more complex. Some operators prefer to cover each ingredient in every menu item. For example, a southwestern-style salad might cover portion sizes for tomatoes, cheese, avocado, and whatever ingredients are included. My recommendation has always been to focus on proteins, and proceed to lower cost items once the process has become routine (or as time permits).
A menu explosion requires a standard recipe to be used at all times, and for that recipe to be recorded on the spreadsheet. Consistency is a hallmark of the well-run restaurant, and tabulating food cost is no exception. There are many reasons that a recipe has to be standardized, but none are more important than controlling food cost.
This requires the General Manager and the Executive Chef to be on the same page, and usually means that the two have to sit down to hash out the exact parameters of a recipe. This recipe has to be followed precisely – no improvising and no cutting corners when the kitchen is busy or has run out of an ingredient. Precision is the key, and the benefits to controlling costs are essential.
Importance of Controlling Food Cost
This is the nuts and bolts of running a business. Most operating costs are fixed. But food costs can vary wildly from month to month. They can quickly get out of control, just as personal spending can suddenly grow for anyone. Individual products are commodities that have varying prices based on an array of factors.
- The growing season
- Market shortages and scarcity
- The monopoly of one provider
- Time of year
Oftentimes, the price of a single product can fluctuate wildly from one week to the next, or even within a given week. A busy restaurant operator can’t possibly stay on top of the price of each product. But when a given cost is exceedingly high (such as meat, seafood, or produce), he has to know what caused the spike and find a quick way to fix it.
Menu explosions help pinpoint costs by providing an accurate reflection of products used. When comparing products used to goods purchased, it becomes clear when waste is occurring or when similar problems have arisen. Goods used should equate to goods sold. A thorough menu explosion roots out discrepancies and pinpoints losses. In this way, the menu explosion is like a stethoscope for a doctor – it can quickly find the reason for an ailing patient.
Another important application is with liquor, which has spiraling costs that can also quickly get out of hand. While liquor prices don’t usually fluctuate, the heavy-handedness of bartenders sometimes does, and minor discrepancies can mushroom over the course of days, weeks, and months.
A liquor explosion breaks down recipes just as expanding a restaurant menu does. Formulas are inserted into cells and exploded out within a spreadsheet. This demands that bartenders and managers be on the same page about recipes. It also reinforces the benefits of jiggers and shot measures, especially when bartenders are brought on board for the liquor explosion process.
The liquor explosion pinpoints precisely when too much of an individual liquor is missing. It’s a great tool for pinpointing theft and bartender heavy-handedness. Since these are problems in many bars around the country, they’re always a good idea.
Keep it Under Control
Menu explosions should be linked to inventory sheets that include costs and product yields. This gives a thorough sense of how much of each item is being used and how each contributes to loss, and therefore to profit. When this process is done every week, it becomes clear right away when there’s a problem – due to theft, waste, or inadequate product being shipped. This is the best way to apply some control in an uncertain business.