There are two areas where we can identify major food cost problems. Focusing on these and taking corrective actions can put dollars in the bank

1. CHRONIC WASTE
If a restaurant features lots of specials, and if they account for more than one-third of its volume, there is probably a significant waste expense. Forecasting is much more complex with menus featuring market-based entrée specials.

Many menus focused on specials create chronic waste. The cost of each bad decision usually is not immediately recognized. These mistakes are frozen, rehashed, served on buffets, and fed to employees. Some executives praise chefs and kitchen managers for their talent with using leftovers. It’s okay to creatively use a modest amount of overproduction. Chronic waste starts when over-production becomes routine

Once an operation starts producing too much product due to poor forecasts, the focus is more on mistakes than successes. Waitstaff are asked to recommend last night’s poorly received fifth choice rehashed into tonight’s number-one choice. At an extreme, companies spend capital resources on greater freezer capacity.

How do we end this cycle of progressive and chronic waste? One way is to develop and feature a solid slate of popular entrées on the base menu. Use specials judiciously to highlight seasonal favorites (preferably using low-cost seasonal ingredients).

It’s okay to offer some variations on a theme, but try to use fewer meat and seafood raw ingredients. Waste expands as the variety of protein ingredients increases in the walk-in cooler. Operators with limited menus experience little waste because they offer the same entrées and sandwiches day after day. Study this simplicity before revising your menu strategy.

2. LOW-VOLUME PERIODS
There is an adage in the restaurant industry that states: Volume hides mistakes. I prefer to take the statement and twist it a little. What are these hidden costs? Why does volume hide them so well? Is there a benefit to eliminating these profit killers?

Hidden costs often involve food consumption unexplained by menu analysis. Finding the food consumed without regard for the number of covers or menu choices made daily is our goal. When do these costs become visible?

Hidden costs stand out on low-volume weeks. When there is no volume to hide them, we can identify and eliminate these problems. Embrace slower periods, and use them to improve.

The core staff is often on duty during slower business periods. These workers most likely consume food while on the job, and they may also consume food off the premises. It’s a mistake to credit the food cost for employee meals. Rather than issuing a credit, include the employee meals in the food cost percentage. If we credit these meals, we miss a control opportunity.

Some operators see huge swings when their volume drops. The biggest moves I’ve seen are from the high 20s to low 40s. If food cost percentage is 28 percent at peak volume and 42 percent at the low point, we use 50 percent more food per portion served to a customer.

Imagine someone robs a case of shrimp each week. The impact of this is clearly greater when volume drops. Try not to offer additional cover by creating overly generous employee meal credits in your calculations.