1. Food cost controlFood cost control
• It can be defined as guidance and regulation of cost of
operations.
• Under taking to guide and regulate cost needs to
ensure that they are in accordance of the
predetermined objectives of the business.
• Guidance and regulations of cost are set as per
expressed in the policy statements and budget of
undertakings:

2. Cont..Cont..
• Food cost control means :
• You have a stick to your predetermined standards.
• Set standards appropriate to your market before you
buy, prepare and sell food.
• Cost control procedures.

3. What is Food Cost?What is Food Cost?
Cost of Food Cooked
+
Wastage
+
Spoilage
+
Shrinkage/ Pilferage

4. What isWhat is NotNot Food Cost Control?Food Cost Control?
Bringing down the cost at the expense of
• Quality & Guest Satisfaction
Attitude:
• Penny Wise, Pound Foolish
• Golden Goose

5. Why should you Control Food Cost ?Why should you Control Food Cost ?
• Rs.1 Saved = Rs.10 Sales
• Adds Straight to the Bottom Line
• Competitive World

6. How do you Control Cost?How do you Control Cost?
1. Shrinkage/ Pilferage
Short Term: Better Security System
Long Term: Create a working atmosphere,
where people belong and are proud to
be contributing to the growth of the
company

7. How do you Control Cost?How do you Control Cost?
2. Spoilage
• Better Storage Facilities
• Better Kitchen Design
• Stock Management

8. How do you Control Cost?How do you Control Cost?
3. Wastage
• Temporary / Stressful / Negative / Life
reducing way: Policing
• Permanent / Enjoyable / Positive / Life
enhancing way: Bring in a culture of High
Performance

9. How do you Control Cost?How do you Control Cost?
4. Cost of Food Cooked
• Planning the Quantity
• Ensuring the Quality

10. ObjectiveObjective
• To analyze income and expenditure:-
– Gross profit = sales – food cost
– Net profit = sales – (food cost + labour cost + overheads)
• Pricing of food:-
Selling Price = food cost + labour cost + overheads + profit
(20-30%) (7-10%) (6-10%) (50%)
• Prevention of inefficiencies:-
• Data for the management:-

11. Factors affecting the percentage ofFactors affecting the percentage of
food cost-food cost- HurdlesHurdles
• Food Purchasing
• Menu Planning
• Method of pricing
• Culinary Skills
• Service Skills
• Avoiding Wastage

12. Phase of control proceduresPhase of control procedures
• Planning
• Operational
• Control after the event

13. Phases of Control
Planning Operation Control after the Event
Finanacial Marketing Catering Purchasing Receiving Storing Issuing Production Sales Reporting Assesment Correction

14. Financial PlanningFinancial Planning
• Budget- Whole organization & single unit
• Total Revenue
• Expenditure
• Borrowing
• Profit
• Shares
• Debentures

15. MarketingMarketing
• Segment
• Clientele
• Turn over
• Market Share
• Average Spending Power
• Choice
• Trends
• Advertisement
• Promotions

16. CateringCatering
• The type of customer
• The type of menu
• Beverage provision necessary for operation
• Food quality standard
• Method of pricing
• Type and quality of service
• Degree and décor and comfort
• Type and style of table and chairs

17. OperationsOperations
• Purchasing
• Receiving
• Storing
• Issuing
• Production control
• Sales control

18. Management control after theManagement control after the
eventevent
• F & B cost reporting
• Assessment
• Correction

19. Cont..Cont..
Operation
Control After the Event
Planning

20. METHOD OF FOOD CONTROLMETHOD OF FOOD CONTROL
• a) Weekly/monthly food cost report-
This system is used by small organization
where manager controls each activity as
daily routine. It is a reconciliation report of
daily activities. The calculation procedure
is
• Opening stock + total purchase for the
period – closing stock = total food sale

21. • b) Daily food cost report- This method is
used in medium sized operation.

22. Problems of F&B IndustryProblems of F&B Industry
• PERISHABILITY OF THE PRODUCT
• UNPREDICTABILITY OF VOLUME OF BUSINESS
• UNPREDICTABILITY OF THE MENU MIX:
• SHORT CYCLE OF CATERING OPERATION
• DEPARTMENTALIZATION