TACTICS TO COMBAT
RISING FOOD & OPERATIONS COSTS
WARREN DIETEL, CEO, PUFF ‟N STUFF CATERING, ORLANDO & TAMPA, FL
GREG KARL, PRESIDENT, EPICUREAN CULINARY GROUP, DENVER, CO
JIM ZILLI, CEO, ZILLI HOSPITALITY GROUP, WAUKESHA, WI

TACTICS TO COMBAT RISING FOOD AND
OPERATIONS COSTS
It is a fact of life that food and operations costs continue to rise. The
financial squeeze between the retail price and the cost of food and
operations often results in a reduction of bottom line profits. In today‟s
session we share a number of our best practices for combating these
rising costs while protecting and increasing margin.
Develop standardized systems to reduce costly waste
Use menu engineering when designing cost-effective menus
Determine true production and overhead costs
Different factors to consider when strategically raising prices
Effective purchasing practices
Presentation available at:
http://www.slideshare.net/WarrenDietel

DEVELOP STANDARDIZED SYSTEMS
TO REDUCE COSTLY WASTE

BUILD A SYSTEMS-FOCUSED TEAM
Quality Control Team
• Involve all department managers
• Meet weekly
• Focus on top 3-5 goals per department
• Take ownership & report minutes
• Director of Purchasing
• Identifies cost effective items
• Looks forward to both short & long term needs
• Educates sales – promotions, new recipes, A-B-C list

QUALITY CONTROL TEAM
• Form an executive team focused on quality
• Develop Food and Service Standards – every member looking
out for quality, hospitality and service.
• Involve the team in full strategic plan - Great for culture.
• Helps waste with hours, safety, efficiency of decision making,
four eyes on each event
• Entire company knows who the QC Team is.
• Review food before departure

REPORTING: WORK SMARTER, NOT HARDER
Velocity Reports
• MPM velocity report by menu item
• Friday report by month, YTD, by concept
• Pricing & purchasing strategy direction
PEAR Report “Post Event Analysis Report”
• Caption completes 8-9 pages
• Average portion/person
• What was returned? (Interview Dishwashers, look at garbage)
• Cost out party after the fact to measure GOP

80/20 RULE
• 80% of your business comes from 20% of your
clients (75/25) – focus on those clients
• Charging for tastings now to those clients who don‟t
hit our 75/25
• 80% of your sales come from 20% of your menu
items – study what sells and what doesn‟t.
• Be efficient and price items higher that sell.

EFFICIENT TEAMS
Blend food & labor costs
• Labor is a significant portion of menu cost
• Example: Lobster is a high food cost, low labor cost
Utilize technology to:
• Scale recipes & prep
• Determine required items
Leverage small efficiencies
• How many chefs chop parsley each day?
• Consider offering screw top wine

Epicurean used over
11,000 pounds of beef
tenderloin in 2012

Use
Transglutaminase
for a cost of $13
per pound
Fancy word for Meat Glue, but it
is better than it sounds!

Cryovac
Everything!
It‟s not just for meat anymore

PRESERVING THE „SERVE LIFE‟ OF YOUR
PRODUCT
• Returned event food, can be made into small
plates, apps, stocks, sauces
• Sautee & freeze Spinach/Greens in advance to save time
• Fish can be turned into Tacos, Lobster Meatballs

Create hors d‟oeuvres based
on your typical waste
Leftover and end products of
Cheese, Beef, Fish

Selling: Hors d‟oeuvres
offer a mouthful of profit
Full Quantities of each @ 4 Bites & Adjusted
Quantities of each @ 4 bites

Grow a Garden
Epicurean purchased no herbs in
the 2012 season.
Grow what you use!
Great marketing and sales tool to
demonstrate fresh product.

MENU ENGINEERING

WHAT IS MENU ENGINEERING?
• Designing Menus for in-season foods
• When food is in-season, what can you make, can or cryovac?
• When designing a Seasonal Menu, Seated Dinner or Suite Experience –
design for use of same product throughout the menu to reduce the amount of
items to purchase and prep labor.
• Considering labor intensive vs. labor efficient menu items

STREAMLINE YOUR MENUS
The Basics:
• Avoid too much variety and menu waste
• Train to prepare low volume purchases
• Tenderloin – Sirloin – Rib eye
• Cut to first Tenderloin, even if it‟s a smaller portion
• Custom proposals
Bonus:
• Put more expensive Items at end of buffet on the left
• Less people tend to eat these items

PRACTICE PORTION
CONTROL
• Understand your
clientele
• Rural people
• Women drink
coffee, men
indulge in protein
• Portion vs. production
waste

Quantities: Tricks
of the Trade
Chef/Management is allowed to
reduce quantities based on
knowledge of events or guest
counts.
Guests Go Right – for station
events, put more expensive
items to the left and reduce
quantities.

EFFECTIVE QUANTIFICATION

EFFECTIVE QUANTIFICATION

VALUE ENGINEERING
• Start with a common item/sauce/ concept for variations
• High-end menu items can be tailored for the appropriate course and
portion size
• Lobster Mac „n Cheese = 7 service options
• Hors d‟oeuvre (2), buffet, plated, family style & action stations (2)
• Find a winning balance between budget and brilliance!

LOBSTER MAC „N CHEESE
Lobster Mac „n Cheese is a rich
interpretation of a classic comfort food.
This dish debuted on our menu an a
luxurious hors d‟oeuvre Chef Bar
combining fresh Maine lobster meat,
savory pasta, Prosciutto de Parma, petit
pois, and rich cream in a decadent
eighty pound Grana Padana cheese
wheel.
The finished dish is garnished with a
basil leaf and presented to delighted
guests on a crisp Cheddar and Edam
cheese tuile.

Options 1 & 2: Hors d‟Oeuvre
• Smallest portion sizes
• Tray passed
• Perfect for large groups

OPTION 3: BUFFET
• Medium portion size
• Cost effective service style
• Presented in chaffing dish

OPTION 4: FIRST COURSE
• Plated meal
• Medium portion size
• Elegant service style
• Introduce refined ingredients to more
simple meals

Options 5: Family Style
• Presented on a shared platter
• Most generous portion
• Relaxed service style fosters
conversation

Options 6 & 7: Action Stations
• Prepared to order vs. pre-prepped
• Most exciting and original presentation
• Most expensive execution
• Cost can be controlled by adjusting chef‟s service
style

VARIED OPTIONS FOR VARIED BUDGETS
1. $ Hors d‟oeuvre – Butler-passed in an edible cup
2. $ Hors d‟oeuvre – Butler-passed as a mini plate
3. $$ Buffet – presented in chaffing dishes
4. $$ Plated – as a first course
5. $$$ Family Style – presented on a platter
6. $$$ Action Station – served from a chaffing dish or cooked to order

2013: THE YEAR OF THE R&D CHEF
• Develops all menus two seasons ahead.
• Responsibilities: Recipe, Method, Pictures, Teach
Cooks how to Cook it and Back Captains how to
prepare on site
• Great personality: help Sales People to sell what is
in season and convince clients to use what is in
season.

DETERMINE TRUE PRODUCTION &
OVERHEAD COSTS

REMEMBER THE 80/20 RULE!
20% of Costs - impacted by smart purchasing
Remaining 80% - managed by operational controls
“What you do once products arrive at your backdoor”

HOW TO MAKE YOUR KITCHEN LABOR
WORK FOR YOU
• When creating menus, we calculate labor, OT and fudge factor into
the mix by historical numbers
• Four kitchens around the city and a Food Truck. Chefs speak to
each other weekly to see what food items we can reuse. Chefs do
cost transfer between profit centers.
• Certain kitchens are slower/busier at different times of the year. Use
those down times to trade staff, save overtime, make and freeze bulk
items that hold up.
• Stagger Staff in and out of parties. Tell staff that they must sign out
at X time and that they need to come to the Captain. Force
efficiency.

LET YOUR SOFTWARE DO THE HEAVY LIFTING
Pricing
• Set a base sell price for each menu item
• Use software to mark-up based on venue commission, other factors
• Put a per person “Cleanup and Disposables” charge into every menu
Venues
• Develop different menus for different venues
Labor
• Electronic & smart phone tech for time & attendance
• Stagger labor arriving and departing
• Capture accurate time for work produced

STRATEGICALLY RAISING PRICES

NOT IF, BUT WHEN YOU RAISE PRICES…
• Know what prices went up and what didn‟t
• Know your place - a position of strength vs. weakness
• Raise prices all at once
• Go up on only 1/3 of each menu – by 3 years, all up.
• All prices across board rise 5%.
• Administrative Service charge rise 2%
• Create a cycle, review prices each November
• Menu type and by guest size volume

DONATIONS
• Give away less!
• Use a charity/donation
response form

EFFECTIVE PURCHASING
PRACTICES

EFFECTIVE PURCHASING STRATEGIES
1. Build and leverage
relationships
2. Negotiate
3. Manage ordering/payments
4. Manage in-house processes

PURCHASING: DON‟T BUY ALL YOUR EGGS
FROM ONE BASKET
• We have an exclusive agreement with one major purveyor, but we
still constantly shop. Other purveyors still know we can buy from
them and bring us great deals.
• Go direct to manufacturers. Negotiate hard with purveyors.
Remember BATNA for negotiating and Wayne Gretzky.
• Alcohol – saved us a ton of money going with one distributor. Better
price on all products. Great incentives when we need to close and
event or save money. 30 cases of Breckinridge Vodka and Bourbon
for Skin & Bones.
• After negotiating to the bone with one purveyor we asked them to
buy half of our box at Sports Authority Field and they did. It came
from a different budget.

TIPS OF THE TRADE
• Financial Consultant
• Understand pricing seasonality
• Meat prices go up in the fall
• Sign one vendor contract, but
still shop around
• Produce it yourself!
• Herbs, stocks, etc.
• Liquor distributors donate
products

THE CARDINAL RULE
“Don’t chase the lowest price.”
Buying from multiple distributors dilutes your purchasing power.

THE CARDINAL RULE
• Leverage your volume with a select few
• Create win-win relationships with distributors by
clearly explaining your “definition of success”
• Listen to distributors‟ challenges and needs
• Remember – loyal and educated customers
receive better pricing

GROUP PURCHASING ORGANIZATIONS
• Goal is simple: Contribute to the bottom line of the members while
increasing sales for participating suppliers
• Analyze your organization and specific purchasing history, needs,
and future requirements
• Develop unique purchasing strategies
• Leverage the combined purchasing power with Distributers and
Manufacturers
• Negotiate Master Distribution Agreement with Distributers and
Manufacturer Agreements

GPO BENEFITS
• Reduce your time “chasing the
deal”
• Track and manage your refunds
• Identify manufacturer
opportunities
• Piggy back on others
• Typical Fee Structure
• 1% - 2% of Annual
Purchases
• Percentage of Rebates
• Manufacturer

NEGOTIATNG
Distribution Agreement Points
• Financial
• Annual sales/commitments
• Growth incentives
• Deviated pricing
• % of overall broad line business, 70% +
• Audit privileges
• Terms – payment and length (typically 1, 3 and 5 years)
• Logistics
• Delivery $$$ or drop size, $1,500+
• Delivery frequency, delivery day & time
• Product
• Number of proprietary items stocked
• Distributor branded items

YOUR ROLE
• Receiving product
• Invoice price
• Product handling
• Portioning/menu item costs
• Waste
• Theft (Industry average =
3%)
• Appropriate pricing
• Implementing systems and
controls

FOOD FOR
THOUGHT…
lop your own network of
caterer‟s of similar size
philosophy to share best
ctices and learn from
each other

THANK YOU!
PRESENTATION AVAILABLE AT:
HTTP://WWW.SLIDESHARE.NET/WARRENDIETEL