“Jigger all bar drinks to stop over-pouring and ensure that drinks are consistent. If you don’t like jiggers, then make sure to use speed pourers and pour test all the bartenders on a regular basis.”

• Mike Walls, Operations & Beverages

“Teach your back-of-house staff how to properly utilize available portion tools to reduce food waste and labor hours. Staff should always be given proper instruction and training on kitchen tools and equipment during onboarding and station training.”

• Natasha Reta, Culinary & Operations

“Assign front-of-house side work and cleaning tasks at the beginning of each shift. Team members will finish much more quickly if they can start as soon as business winds down. Assign tasks like folding napkins and rolling silverware to host staff to do before and after the rush.”

• Rita Imerson, Operations & Training

“Cross-train all back-of-house staff on as many kitchen positions as possible. With our ever-tightening labor market, gone are the days of the specialist except for certain high-skill tasks like butchery. If everyone on the team can jump in and handle any station, you can best utilize all your staffing resources.”

• Anne Haerle, Culinary & Concept Development

Need to increase restaurant sales quickly but not sure where to start? Focus on small wins for big gains.

When single-unit operators contact us for help, most often they’re concerned about sales and operating costs, or both. With rising wages and increased competition — not to mention hefty third-party delivery fees — operators know they need to reign in expenses and boost their efficiency. Fast.

Oftentimes the best place to start is with an in-depth operations assessment. When we visit a client’s restaurant to analyze their operations, we bring a small team who homes in on all parts of the business, from the flow of food down the cooks’ line to taking inventory to steps of service to food quality and presentation. This list merely scratches the surface of what we do. Our goal is to do a deep dive into every aspect of our client’s restaurant to uncover opportunities for greater efficiency and innovation. While we’re delving into the intricacies of production pars, labor utilization, and ticket times, we often uncover “low-hanging fruit,” or quick fixes that our client can put into practice right away to reduce operating costs or bump up their sales.

During an in-depth operations assessment with a client last year who needed to kick-start sales, we encouraged the client to focus on those quick wins by inventing the $3 Game. The rules were simple — look for ways to increase their average check by $3. That’s it.

The client knew that they needed to overhaul a number of basic operating systems in their restaurant, from the POS technology to inventory management to training programs. This amount of change often feels daunting for clients. While these large-scale changes needed to happen, we wanted to show our client that they could make an immediate sales impact by getting creative and making some simple changes.

We kicked off the game with a few suggestions:

· Give the customer a reason to spend more money: Since higher-priced luxury items like steak sold well, add a great ribeye steak as a weekend special.

· Increase perceived value by the customer: By elevating cocktail garnishes with over-the-top touches, the customer sees greater value and is more willing to pay extra.

· Create a sense of urgency: Feature and promote high-value seasonal items on your menu to drive traffic and sales margins.

Game on! The client gladly accepted our challenge by:

· Increasing sales by improving plate presentations on a few underperforming menu items;

· Reinventing other menu items with high-demand ingredients to broaden appeal, and;

· Upping the price on a couple of good sellers that were underpriced relative to their competition.

After wrapping up our operations assessment, we continued to play the $3 Game with our clients by texting back and forth to check on progress. Our client texted photos of their creative ideas and their immediate sales impact.

We were thrilled to see our client put all of our ideas in motion, as well as their own. They gained confidence knowing that they could use the tools we gave them to increase sales on their own.

Who won the $3 Game? Our client of course.

The bottom line is top-of-mind for all restaurant owners in an industry where margins are very slim. Naturally, operators are seeking ways to reduce costs. The importance and logic behind this is sound. However,  we want to dispel the notion that keeping food costs as low as possible alone, is the key to running a profitable restaurant. 

There are multiple operating expenses to focus on to optimize in order to increase profit margins. Food cost is certainly a large factor, but it is not the only area you need to examine when seeking to increase profitability. For example, often restaurant operators seek to purchase the lowest cost ingredients or buy in bulk to take advantage of a discount. This type of practice can inadvertently lead to more food waste (overbuying and the resulting risk of spoilage) and ironically, increases food costs.

 

The formula for calculating your restaurant profit margin is:

Net profit margin percentage = (net profit / revenue ) x 100

Think about additional areas that can cut into your bottom line, such as labor, rent, marketing, repairs/maintenance, technology, and other overhead expenses. Can you make your labor processes more efficient? Can you utilize better technology and equipment to increase production?

Another opportunity to help increase your margins is strategic menu pricing.  Steer away from pricing menu items solely based on food cost percentage. Hard and fast rules do not apply to menu pricing. However, a deep look at your target market, food cost percentage, labor, and competition will be required. It is wise to examine your menu and look at each item’s contribution margin (menu price – food cost). You will notice that it’s not always the items with the lowest food cost percentage that are the most profitable! This type of analysis can help you further identify ways to increase your margins.

Think of the old saying, “You can’t save your way to prosperity,” which is very fitting when it comes to food costs at your restaurant! If you would like your menu or labor processes analyzed for efficiency, please reach out to Synergy.

Food supply chains across the globe are getting increasingly connected, streamlined, and more efficient. In the developed world, the increase in low-cost food supplies is creating a culture of high waste.

According to a New York Times article, Americans waste about $160 billion a year in food. Worldwide, close to 1.3 billion tons of food is discarded per year. Another study by Food Waste Reduction Alliance found that 84% of unused food in restaurants ends up in the trash.

To further illustrate the scale of waste, projected sales for the entire restaurant industry in 2019 is $863 billion, $160 billion of which is destined to decay in a landfill. That is a lot of money lost on inefficient storage, portion sizes, or too much inventory. With food costs reaching approximately 30% of typical expenses in the food industry with thin margins, food waste reduction can be an easy and accessible way of quickly increasing revenue.

Here are some general ideas to help reduce food waste:

One common source of waste is holding too much inventory compared to expected sales. Getting more efficient with identifying trends in sales can help manage the amount of inventory needed. The goal is to have enough inventory to supply consumers while prolonging the shelf life of excess inventory to minimize waste.

Another place to start is to create an audit to identify trends in the kitchen. We can learn a lot by identifying the types of items that wasted regularly. Creating a log of items that are discarded and recording the reasons for the waste will help identify problems ahead in the chain. We might find that the waste is due to cold storage temperature or food handling processes, for instance. Using a FIFO (first-in-first-out) food rotation system can help eliminate food waste due to spoilage.

 

 

Of course, waste culture is shared in part by the consumer. The prevalence of cheap food and lots of it means larger portion sizes. Reducing portion size for the consumer means less waste and reduced cost. However, the implication of reducing portion size is unattractive due to the competitive nature of the business, especially in American super-sized culture. However, we can balance consumer expectations by focusing on the least to most popular items. Strategically reducing portions can help cut waste and maintain customer satisfaction.

These are simple ideas to start, but there are many more complex strategies to cut costs and minimize waste. The main point here is to illustrate that waste is a huge issue in the industry, and even taking a few simple steps can help to minimize waste and thereby increase revenue. To find out more about waste reduction strategies using data-driven and experienced techniques specific to your operation, please contact Synergy.

CBD is all the rage now. You probably have heard this term thrown around these days and seen them on the labels of various products and advertisements– CBD tinctures, lotions, capsules, oils and even CBD infused food and drink (Carl’s Jr. debuted a CBD burger in Denver earlier this year). CBD is the acronym for “cannabidiol,” a chemical compound found in cannabis plants. And after the Farm Bill (Agriculture Improvement Act of 2018) passed, more and more CBD products seem to be flooding the market.

Why all the rage? CBD has been touted for its health benefits as a natural remedy, primarily for seizure and pain relief, without psychoactive effects. It’s also been marketed and used for anxiety, autoimmune and skin diseases, to name a few. However, at the moment the strongest evidence for effectiveness is for the treatment of epilepsy. Regardless of the efficacy, CBD’s popularity has surged and is making its way into the foodservice industry.

According to the 2019 What’s Hot Culinary Survey conducted by the National Restaurant Association, plant-based ingredients, including cannabis and CBD, and zero-waste cooking will be the hottest overall culinary trends of the year. We’re seeing cookies, sparkling water, popcorn, chips and even matcha powder infused with CBD. Mixologists around the country can be found experimenting with CBD in their cocktails and restaurants like James New York NoMad are serving up dishes like butter lettuce salad with gorgonzola and pear vinaigrette (containing 20 mg of CBD).

But before you get your culinary creative juices flowing and begin thinking about CBD menu items, take note– CBD legality and restriction varies among states amid regulatory uncertainty.

I am currently attending a three-day Marketing Executives Group conference sponsored by the National Restaurant Association. This special event brings the biggest brands and the smartest marketing executives together to share ideas and discuss solutions to some of the greatest challenges facing the restaurant industry.

My ten big takeaways from day one: 

1. According to the Deloitte Human Capital Trends Report, 82% of respondents believe that culture is a competitive advantage.
2. Only 12% of restaurant executives believe their company is driving the right culture
3. Culture describes the “way things work around here,” while engagement describes how people feel about “the way things work around here.”
4. Restaurant sales in plant-based items continue to grow by double digits.
5. If your food presentation is not “Instagramable,” you have work to do!
6. CBD-infused drinks are the number one trend, and number two is CBD-infused food
7. Carrots could be the new cauliflower.
8. Kale and Brussels sprouts are still the fastest growing vegetable trend.
9. Smoked foods continue to gain traction in fast food.
10. It’s not just about the restaurant’s ambiance – menus must be experiential, too!

I am looking forward to the next two days here! Stay tuned for our next blog post regarding more important industry trends to watch.

— Dean Small

By Anne Haerle

With the competition among restaurants for “stomach share” nearing Game of Thrones intensity levels, chefs are flexing their creative muscles even harder to capture their share of customer dollars. Between cheeky fusion concepts, turn-anything-into-a-taco, and Instagram eye candy menu items, restaurants are driving differentiation by seeing who can conquer their competitors through next-level creative food and dining experiences.

But pushing the edges of culinary creativity will only take you so far when it comes to attracting new guests and can actually force you over the cliff if you’re not careful. Innovation — the ability to harness new ideas and make them work for your restaurant — is creativity’s true partner. We chefs love to concoct edgy menu items that represent our creative drive on the plate but if that menu item doesn’t represent the restaurant’s brand, is too complex for the kitchen to pull off consistently, or doesn’t meet goals for food cost and margin, then it doesn’t belong on the menu. Period. That’s why menu innovation has to ride shotgun with creativity.

When the Synergy culinary team works in the test kitchen, we’re always pushing hard to develop menu items that balance broad appeal with breakthrough creativity. Take the burger for example. You might think there’s nothing new to discover there, especially considering all the competition in the burger space. By viewing the burger through the lens of both the restaurant concept and the guest, we tweak every aspect of the dish to deliver the very best eating experience that only our client’s brand can deliver. Every detail — from the thickness of the burger patty to the right amount of acidity in the sauce to the order of toppings and more — is meticulously crafted into a unique and craveable menu item.

 

While we’re creating that ultimate burger, we’re simultaneously envisioning how each ingredient and recipe will flow seamlessly through the kitchen. For instance, do we have the equipment, talent, and capacity to make our own burger buns? Is that important to our customers or do they care more about a house-ground fresh beef patty? Do we buy sliced Cheddar or does the restaurant brand demand that we slice all our cheese fresh daily? Should we serve our burger with sliced tomato year-round, or only when local heirloom tomatoes hit their peak? Once we make all these decisions based on our client’s vision for sourcing, quality, flavor, and value, we develop innovative and practical solutions that ensure the restaurant’s team can make and sell that burger to help meet sales and profit goals.

For us, the pairing of creativity and innovation allows us to develop those signature menu items that help define a great restaurant brand. If you see an opportunity for us to help, please get in touch.

Food delivery is now more common and convenient than ever, and modern technology has made it easier for people to access food no matter where they are.  Many restaurants stumble because they do not have their restaurants properly set up for delivery.  Restaurants operators who have a sound delivery strategy realize 20+% of sales towards this revenue stream, however, are they truly making money?

You’ve seen their names just about everywhere now–GrubHub, Doordash, Postmates, Uber Eats—3^rd party food delivery services are a big deal. Estimates show that the delivery market is a $13 billion industry! As a restaurant owner, these companies have probably approached you. These 3rd-party services make a delivery option possible for you, but charge approximately 15% to 30% in commission.

Wait a second, 15% to 30%? That’s quite a figure! There has been much contention around the high costs associated with such delivery services. McDonald’s has recently begun negotiating with its franchisees, and Uber Eats to reduce commissions and provide some rent and royalty relief. Beyond the cost factor, Domino’s CEO Rich Allison has rejected the idea of using 3^rd party delivery stating he would like to keep the quality and safety in their own hands. Jimmy John’s also does not rely on 3rd-party delivery services and instead delivers food to customers in “sandwich delivery zones” that are no more than a 5-minute drive or bike ride away.

 

 

It appears chains are taking a not-so-novel approach to control the costs for food delivery–they’re simply charging more. This strategy of charging more for delivery orders does not seem to negatively affect business as customers are willing to pay for this type of convenience. Consumers want convenient delivery options — you cannot ignore this truth. If you haven’t considered adding delivery as an option for your guests, be it 3rd-party or in-house, you’re falling behind!  If you need help trying to make real profits by tapping into this growing delivery industry, give us a call.  The Synergy team are experts on this subject!

Last Monday was Earth Day – this worldwide event is to bring awareness of the importance of environmental protection. That awareness also extends to the foodservice industry. On Monday, April 22, 2019 (coinciding with Earth Day) the City of Los Angeles put a new ordinance into effect, aimed at reducing single-use plastic waste. This new law requires that plastic straws be only given upon request in restaurants that have over 26 employees.

This eco-conscious move comes at a time when more and more cities are taking action against the use of single-use plastics. To reduce plastic waste, last year Seattle enacted a ban on not only plastic straws but plastic utensils as well, making compostable/biodegradable alternatives available instead. Restaurateur Danny Meyer recently announced that plastic straws would be eliminated from all U.S. Shake Shack locations, a move that Starbucks plans to achieve globally by 2020.

The trend is clear—foodservice companies are getting more environmentally friendly (either by force or choice) amidst the increased global concern over plastic waste. So what kind of alternatives are available to help restaurants comply with new laws against plastics? What are compostable straws made of and what do they look like? What are the costs?

Surprisingly, there are already many straws made from alternate, more eco-friendly materials. Innovation in this area is booming! Currently available are straws made of bamboo, paper, hay silicone, glass, steel, corn plastic, and even pasta! For the most economical value, a restaurant would likely opt for biodegradable paper straws which cost an average of about 5 cents a piece, which is double the cost of traditional plastic straws. It is easy to find non-plastic straw alternatives available in bulk from your usual restaurant product supplier or popular online sites like Amazon.

We have found that many operators and startups don’t have all the financial tools at their disposal to calculate what they can afford to spend on occupancy costs. Often they are given a cost per square foot AND an additional CAM charge (common area and maintenance) OR a Triple net fee (which includes all taxes) which must be included in the total cost per square foot.

As an operator of a new or expanding business, you need to know what the all-in cost per square foot will be. To do so, you multiply the total square footage TIMES the combined rent and common charges to determine the annualized occupancy costs. It’s imperative to know what that total cost will be in order to determine what you can afford to spend per month based on your projected sales.

We have put together a tool to help operators understand the revenue required to support occupancy costs that can be used when determining if an available space is suitable.

To receive the rent calculator please subscribe to our Synergy mailing list below. Once you have subscribed, we will email you the calculator.

When opening a new location or a new concept, we strongly recommend developing a realistic financial model with conservative projections, so you don’t get in over your head. Before deciding on a site, check to see if you can realistically achieve your revenue goals. Conduct a thorough feasibility assessment of the market including traffic patterns, street visibility, and market density throughout the day, competitive landscape, potential revenue streams, catering, and delivery opportunities.

Once you feel that you have a realistic understanding of projected annualized sales, divide that figure by the total square footage to determine estimated revenue per square foot. Using this calculating tool, you can determine what you can afford to spend. Simply enter the location square footage, actual base rent, and associated expenses for year one to calculate total occupancy costs per square foot. Once that has been determined the lower chart will detail the gross sales needed to achieve your occupancy percentage goals, which should ideally be below 8%.

If you need some professional guidance in developing your financial model, finding a new location, or any other aspect relating to your new location give us a call at (888) 861.9212 or get in touch info@synergyconsultants.com