Tips on keeping food purchasing costs down

Jan. 28, 2013
Tips on keeping food purchasing costs down

By Jeremiah Higgins

From renovations to computer systems, equipment to uniforms — restaurant costs have a tendency to add up. We can always keep a renovation basic or chalk up the cost of a new Sub-Zero to its investment value, but the one place where it can be more challenging to manage is the cost of food. When my company, HJL Group Restaurant Advisors, sits down to discuss the operational standards for our new clients, one of the most important line items we cover is how to maintain a kitchen with the freshest, most delicious and sustainable ingredients at a low cost.

Throughout the years, we have used a variety of tips and tricks to keep costs low, yet menu standards high. There are a few simple things that can be done to streamline and reduce purchasing costs for any restaurant.

First, start with your delivery area. Many problems with your food cost can be stopped right at your back door. Begin by meeting with each of your vendors. Ask each vendor to build current order guides listing only the product that you buy from them. Copy this spreadsheet to your office computer so that your ordering managers can print them out themselves. Include a "par" for each item, or an amount that should be on the shelf, in the kitchen and in the front of the house.

Keep your inventory tight. These stock sheets should hang on a clipboard in a specified area near your back door. When the delivery person brings in their product, your manager can take this clipboard and check the inventory order sheet against the invoice, insuring all correct product has been delivered, prices are accurate, and that you are getting ounce for ounce, product for product what you are paying for.

Next, purchase an industrial food service floor scale that can be kept in your kitchen prep area to weigh in any product that you buy by the pound. I like the OHAUS Champ Floor Scale. Nearly all delivery people are honest, but I have caught some dropping light product more times than I care to recall, whether on purpose or by mistake, and as a result I saved thousands on lost product by weighing my deliveries.

I would recommend that meats, seafood and all of your most expensive products be delivered as early as possible — this also prevents a manager from any "I-was-too-busy-to-check" excuses. The items should only be checked in by your general manager or kitchen manager.

Finally, you should discuss with your salesperson a standard delivery time for their product. I suggest that all deliveries arrive between 7 a.m. and 10 a.m. Be sure to stress to your salesperson that failure to drop within your specified delivery times will result in loss of business for them.

Stay strict with your drop times, and here's why: Setting specified delivery times stresses the importance of receiving product to both your delivery person and to your management staff. You are paying good money for their product, and therefore you want to insure that you are only accepting the very best quality and the exact amount that you ordered.

Drivers who show up at their convenience may find your manager involved in setting up their kitchen, preparing the dining room for business or on the floor with guests. If they are pulled into checking in a delivery at an odd time, the manager will understandably be rushed and may miss important products. A time-stressed manager may skip weighing in the product, or fail to consult the purveyor product order sheets. You are charged for the missing product anyway.

Recently, I hired a director of Purchasing to follow these guidelines listed for our seafood restaurant, Arch Rock Fish in Santa Barbara, Calif. In one year, we reduced our food cost by nearly three points and added an extra savings to our restaurant of $45,000.

It's all about making small changes that create big, lasting results. Many of the reasons that eateries costs can flair are by overlooking simple procedures and tests. It's important to utilize restaurant-wide, cost-insurable standards across each platform of the business. If owners and operators start with these procedures, I can ensure that they will see costs lower and budgets bump immediately.

Jeremiah Higgins is a partner and senior operations advisor with HJL Group Restaurant Advisors. He has been involved in opening more than a dozen restaurants. Higgins has more than 20 years of experience in analyzing business drivers, designing operational systems, building staff, and developing cost-cutting and profit-building initiatives to grow the bottom-line. He specializes in strategic planning, marketing, brand development and P&L management.


Topics: Business Strategy and Profitability, Equipment & Supplies, Food & Beverage, Operations Management

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