We speak with menu engineering expert Jane Molin from Suusify about menu engineering itself. It's a term you hear more and more often when discussing profitable restaurants. We delve into what it is, why restaurateurs should work with menu engineering, how to get started, how quickly one can see results, and much more.
What is Menu Engineering in brief?
Menu Engineering is an analysis method that identifies revenue-generating products in a restaurant. It's not always the dish with the lowest ingredient cost that is the most profitable. With full control over which products contribute to the margin, strategies are actively developed to increase the sale of these items.
Why do you think restaurateurs should work with Menu Engineering?
On average, Menu Engineering increases profitability by 5–15%. The restaurant industry deserves better profitability, and Menu Engineering is the tool that helps restaurateurs identify which menu items contribute to increasing the overall gross margin. With Menu Engineering, we shift the focus from turnover and ingredient cost percentage to the actual gross profit of sold products.
Many restaurateurs don't currently use Menu Engineering because it has been a time-consuming process. The integration between Trivec and Suusify now allows for automated and streamlined operations, eliminating many of the previous barriers.
Is there a difference in using Menu Engineering depending on restaurant type?
The principle for analysis is the same regardless of the type of restaurant. However, the strategies employed can differ because customer behaviors vary. Menu Engineering is about more than just raising and lowering prices. It's about changing customer behavior using various methods. For example, by designing a menu that highlights dishes with high margins and encourages upselling.
Another vital part of Menu Engineering is making the staff aware of which products contribute most to the restaurant's actual profits. With this awareness and knowledge of how each product contributes to the overall result, the service can consistently highlight and recommend the most beneficial products for the total gross profit.
How do you get started?
Starting with Menu Engineering is easy. The first step is to determine the ingredient cost for each product on the menu.
With Suusify's web-based program for Menu Engineering and restaurant analysis integrated with Trivec, it becomes easy to identify and analyze the most profitable products. And it's possible to work fully automated. Sales data is updated daily, and comparing different periods and product groups against each other becomes quick and easy without manual intervention.
Based on the analysis results, strategic decisions are made about the product's placement on the menu, which products to recommend, etc. If you use our Menu Engineering module, we also provide support in analyzing and developing strategies for increased profitability.
What challenges do restaurants usually face when implementing Menu Engineering?
Menu Engineering produces results by monitoring sales over time, which can become time-consuming when tracked in Excel. Continuity is what restaurateurs often struggle to maintain amidst their daily operations. By using web-based software, this time-consuming aspect is eliminated, enabling quick decision-making that can be implemented immediately.
Are there any quick wins one can see right away?
Absolutely, rapid changes can be observed. A preliminary analysis provides an overview of the most profitable products. Based on these results, one can immediately make proactive decisions in operations to highlight high-margin products to influence the outcome.
In ongoing work, we recommend comparing development over periods of about 4 weeks. This timeframe allows a restaurant to gather enough data to identify customer trends and behaviors. It's these trends and behaviors we aim to influence for increased profitability.
Do you have any examples of restaurants working with Menu Engineering? What results have they seen?
At a bistro in Gothenburg, we have applied Menu Engineering since February 2022. After an initial analysis, menus for both lunch and evening were created. We integrated methods for Menu Engineering into their graphic profile, which promotes high-margin products while maintaining the restaurant's graphic identity.
We track the development of the gross margin every 4 weeks, discuss and implement strategies ranging from menu design, dish placement, to knowledge transfer. The staff always knows which dishes and drinks are most profitable without compromising on quality or service.
We continuously monitor customer purchasing behaviors, aiming for a positive gross margin development. A balance between average spending per guest and product pricing has resulted in a 20% increase in gross profit in May 2023 compared to the same period the previous year.
Any tips you'd like to share?
Invest in working smarter rather than harder by automating the Menu Engineering process and focus on what you know increases your profitability.
Applying Menu Engineering in operations is quick when you know which products drive profit margins. With these simple menu changes, you move the focus from price to highlight strong-margin products.
Focus should not be on the price.
- Remove currency symbols from menu prices and avoid lines between products and prices.
- Product names should have a larger FONT than the prices.
- Use fonts and text size to highlight products with high margins.
- Use storytelling to emphasize products with high margins. Locally produced, signature dish etc.
- Describe high gross profit wines in detail. What can guests expect, and does it pair particularly well with any menu item.
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