recipe pricing

26
Pennies for Profit: How to Cost Recipes Correctly Jeff Ware March 10 th , 2013

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Page 1: Recipe Pricing

Pennies for Profit:How to Cost Recipes

CorrectlyJeff Ware

March 10th, 2013

Page 2: Recipe Pricing

Session Agenda Why you need proper recipes Knowing & tracking your costs Understanding recipe construction

◦ batch vs. recipe vs. complete recipe vs. menu/pkg

◦ standards and consistency

Different ways to do it

Page 3: Recipe Pricing

Started with CBM at 14 Electrical Engineering/

Computer Science Background

Worked at CNN & theatres Learned other aspects of live events

Fell in love with food thanks to this job

My Story

Page 4: Recipe Pricing

Founded in 1980 as a hot dog stand

Catering spun off into separate company in 1991

Peak revenue of $17 Million 90 FT & 130 PT Employees 45% Full Service / 35% On

Premise / 20% Delivery

CBM 101

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Largest event $1.3 million Focused on food quality

above all else Poor facility design

challenges efficiency Non Chicago address is a

marketing struggle

CBM 101

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394 Vendors 3,220 Inventory Items 13,308 Recipes

◦ Largest known database in existence

3 FT Staff dedicated to managing the database 15,381 photos (432 GB)

Recipes @ CBM

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Consistency in your product Selling based on true costs Consistency in sales force pricing Keep profit margins where they need to be Smart purchasing decisions Historical data = forecasting trends

◦ Caterers are selling for the future

Why you need proper recipes

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Know your loss What is useable

product Proper units of

measure floz ≠ oz

Knowing & Tracking Your CostsIT ALL STARTS WITH INVENTORY

Loss from cleaning Loss from

cooking/reduction ‘Useable Product’

loss

Brisket – Start with 100# received1. Lose 38% in cleaning – now 62#2. Lose 39% in cooking – now 37.82# saleable3. Lose 12% in scrap/trim from slicing

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Page 10: Recipe Pricing

Units of Measure

OZ• Chicken• Mayo• Flour

Weight is always better than volume unless it is a liquid

Can use weight to confirm yield

FLOZ Water Vodka Chopped Herbs

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Inventory Setup

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1. Batch2. Recipe3. Complete Recipe4. Menu/Package

Understanding Recipe Construction

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1. Batch2. Recipe3. Complete Recipe4. Menu/Package

Understanding Recipe Construction

Cooked Rice

Page 14: Recipe Pricing

1. Batch

2. Recipe3. Complete Recipe4. Menu/Package

Understanding Recipe Construction

Sushi Roll

Page 15: Recipe Pricing

1. Batch2. Recipe

3. Complete Recipe4. Menu/Package

Understanding Recipe Construction Sushi Roll w/ Sauce

Page 16: Recipe Pricing

1. Batch2. Recipe3. Complete Recipe

4. Menu/Package

Understanding Recipe Construction Sushi Roll Assortment

Page 17: Recipe Pricing

Tap Water Fryer Oil Packaging Skewer Garnish Loss

Include All Costs

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Food Cost◦ 30% Labor◦ 30% Overhead◦ 30% (or less) Food Cost◦ 10% to pay sales commission and profit

Any average food cost 20%-30% is okChipotle is at 33.5%

Pricing Party

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Pastry @ 20%◦ So much additional labor◦ Passed apps also good at 20%

Proteins can be up to 50%◦ What can your market bear

Cheap items @ lower FC% (8%-16%)◦ Potatoes, Rice

Anything bought & resold @ 50% Packaging @ 50%

Pricing Party

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Consistent Increase

Annual Price Jump

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Database (designed for recipes) – BEST◦ Designed for this use◦ Instantly recalculate recipes◦ Relational data◦ Expensive start up cost

Database (not designed for recipes) – OK◦ Relational Data◦ Lacks functionality◦ Takes a lot of time to setup

Other – POOR◦ Low start up cost◦ Very expensive in the long run◦ Data is flat – not linked throughout

Ways to do it

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Adjust or change ingredients Adjust yield and portion Better purchasing

Reduce Costs

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Enforce Good Data Collection

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Check Accuracy Ingredients + loss = yield All costs included Ingredients are logged

properly

Ingredients listed in order of use

Method written so a person with no experience could do

Use standards – Medium Dice, Brunoise, etc

Page 26: Recipe Pricing

To download a copy of this presentation, go to:slideshare.net/CateringChicago

Jeff [email protected] | (847) 966-6555

Questions?