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The Importance of Margins over Food Costs

Jun 27, 2019

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.

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Pushing the Edge of Culinary Creativity

Apr 30, 2019

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.

menu innovation

 

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.

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Learn Your ABZs

Nov 08, 2018

We are fortunate to be exposed to a broad range of research and strategic marketing strategies that enable our clients to out maneuver the competition. This year the focus seems to be on the Gen Z’s–the population of those 21 and under who tend to be dreamers, consumers and world saviors. What is fascinating about this generation is that they’re obsessed with all things culinary.

The research is telling us that Generations Z demands WOW food and beverage presentations as a form of indulgence, and they’re are using eye-catching food and beverage offerings and onsite experiences to express their creativity and distinguish themselves from their peers. While Millennials do share this passion for food, the Z’s are taking this trend to the next level.

If you’re scratching your head trying to figure out how to grow top-line food sales you might consider connecting with this overlooked market of obsessed foodies.  Gen Z’s want restaurants to WOW them with new indulgences and over-the-top food presentations to they can share them via social media. They want epic food that they can talk about and with the rise of video-based sharing platforms like Instagram and Snapchat, they now enjoy taking videos of presentations being made tableside.

 

generation z

 

If you’re not attracting this generation it’s a huge missed opportunity that could be remedied. Don’t let menu fatigue drive this generation of spenders to your competitors. Don’t forget about Gen Z– they enjoy

Synergy offers affordable menu development and culinary support that can help you raise the bar on your food and beverage strategy.

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Burger Wars: Beef versus Plants

Oct 18, 2018

When you think of a delicious and juicy hamburger, several components need to be spot on—fresh vegetables, delicious bread, and first and foremost, a delicious patty (preferably a hand-pattied blend of beef). The star is certainly the meat—but what if there is no meat? Can a non-meat burger still be craveable and sought-out by consumers?

With shifts in attitude and preferences for healthier and even animal-friendly (think veganism and vegetarianism) meal options, it’s no wonder that more plant-based burgers are making their way on menus. While many veggie burgers are made from a combination of legumes like beans and lentils, new varieties are trying to come as close to a true meat flavor as possible.

Take the Impossible™ Burger. The company the produces it utilizes “ingredients with the precise properties needed to deliver the taste, texture, flavor and juicy sizzle that meat lovers crave ” In fact, these burgers even “bleed” like the real thing (heme is the key ingredient to produce this effect). Its primary ingredients are wheat protein, coconut oil, potato protein, and their meat is sold in restaurants across the country. So does it live up to the hype? You may have to try it yourself to determine this, but in the meantime, check out this review from The Spoon.

City Works
Impossible Burger from City Works Restaurant and Sports Bar, TX

 

Meanwhile, some fast casuals are going 100 percent animal-friendly. Plant Power-Fast Food, based in San Diego, has a large menu featuring all your favorites like bacon cheeseburgers, chicken sandwiches, breakfast burritos and more. Everything served is plant-based and non-GMO.

If you are thinking of revitalizing your menu to include plant-based options, contact Synergy.

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Have you Seen These Superfoods?

Oct 06, 2018

Kale, quinoa, acai—what do these ingredients have in common? They are very popular superfoods that you’ve probably already heard about and eat on a regular basis. But a new round of superfoods that haven’t yet become so mainstream is slowly but surely making their way onto menus around the nation.

At Synergy, many times, a key factor we look at when restaurants seek help from us is how their menus look. Is the restaurant adapting to changing tastes and trends? In this day and age, an important aspect that consumers look for is healthy choices. Let’s take a closer look at the opportunities that superfood ingredients can give us to create healthful, delicious menu offerings.

Chia seeds—these little things pack a nutritional punch and some fun texture, too. Chia are edible seeds from the Salvia hispanica plant. Place a small amount in any liquid, and the seeds transform into little gel-like balls, reminiscent of tapioca. Loaded with fiber, antioxidants, omega-three fatty acids, and protein, just a couple tablespoons will elevate a pudding, oatmeal, or even jam, to the next nutritional level.

Charcoal (not the kind you cook with) is another up-and-coming superfood. Specifically, activated charcoal is the edible form, known as a detoxifier. These days, you may find restaurants offering lemonade or smoothies with a punch of activated charcoal. Further creative ways to include activated charcoal in recipes is to include in freshly-baked bread, and even ice cream.

Turmeric is known for its anti-inflammatory and antioxidant properties, among other potential medicinal benefits, and it’s what makes your favorite curry dish that vibrant yellow color! Turmeric is very versatile in cooking. Try whipping up a pretty turmeric rice dish, adding turmeric to miso soup, or even creating a turmeric-based dressing for salads. The list is endless!

Incorporating superfoods into your dishes is a smart way to innovate your menu and bring in new customers.

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Snacking Drives More Traffic and Sales

Aug 30, 2018

Snacks—it’s not just bagged chips or veggies and dip. According to Technomic’s 2018 Snacking Occasion Consumer Trend Report, 39 percent of consumers changed their idea of snacks in the last two years. Moreover, the Millennial and Gen Z cohort are increasingly replacing meals with snacks.

 

As restaurants struggle to find new revenue streams to combat higher labor and operating expense a great way to drive top-line sales and frequency is to be known as a place to find great, innovative and affordable snacks.

 

Case in point: Yard House has a dedicated snack menu with unique items such as shiitake garlic noodles, hot and spicy edamame, and buffalo cauliflower. If you’ve tuned into your favorite show recently, you may have noticed Taco Bell’s commercial for “Nacho Fries” made to look like a real dramatic movie trailer. This Nacho Fries snack menu offering has prompted two new spin-off test items — Rattlesnake Fries and Reaper Ranch Fries. Still not convinced that snacking is a fast-growing trend? Check out Jack in the Box—they serve up “Munchie Mash-Ups” on the Late Night menu. These include different styles of hash with fun names like Wakey Bakey Hash, Jack’d Jalapeno Hash, and H’angry Chicken Hash all priced at three dollars each.

 

It’s not just bars or fast-food chains that can serve up snacks—casual and even fine dining eateries can offer affordable, small plates or “bites.” A happy hour menu with discounted snacks is a simple way to offer value to consumers as well. Cafes, juice bars, bakeries, and delis also have ample opportunity to sell snacks—think prepared foods (single-portioned fruit, cheese, and nuts for example) that customers can grab and go.

 

It’s clear that snacking is a trend not to be dismissed. Make sure your menu is catering to this new demand, and you’ll be sure to drive more traffic and increase sales.

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Cauliflower— A Popular Carb Replacement?

Aug 26, 2018

Cauliflower—a vegetable once typically found in salads, stir-frys, and as a side dish—is now making a big name for itself. Perhaps even hotter than the avocado toast trend, many people are flocking toward menu items and recipes that use cauliflower in innovative ways. Pizza with a cauliflower crust. Cauliflower rice. Cauliflower crust grilled cheese. Cauliflower Couscous. Cauliflower tater tots. The list goes on.

Do you see a pattern here? Cauliflower has become a huge hit as a low carb, bread, potato and rice substitute. For example, one cup of cauliflower contains about five grams of carbohydrates while one cup of cooked white rice contains approximately forty-five grams. This versatile veggie is also low in calories, another reason people are gravitating toward it. Oprah has even recently launched a line of frozen pizzas that feature a cauliflower crust.

Health-conscious diners are ever-growing and they’re seeking new and innovative ways to satiate their hunger. Don’t be surprised to see more restaurants offering smart, unique, and healthy substitute options on their menus.

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Lardo—It’s All the Rage

Jun 24, 2018

Step aside, duck fat, because fatback is stepping into the spotlight. Wait…what’s “fatback” exactly? It is just what it sounds like, fat from the upper back (of a pig) and is a revered ingredient utilized in traditional charcuterie and Italian cooking as well as in American southern cooking and soul food. Lardo is a type of hard fat which is consists of adipose tissue under the skin of the back with or without the rind. What’s does it look like? Think of a slab of bacon without the meat part.

 

Love sausages like nduja or cudighi? How about lardo? Yup, all made with fatback. Let’s take a closer look at lardo. It’s a kind of salume (Italian cold cut) created by curing strips of fatback with a mixture of salt, spices, and herbs. The flavor of lardo is one of creamy, richness—it tastes porky and buttery. It’s like lard’s fancy, gourmet cousin.

 

Interestingly, lardo is not something you’ll only find in an Italian kitchen these days. A renewed interest in lardo is forming among various types of cuisines. In Portland, Oregon, a restaurant named Lardo serves up a (surprise, surprise)– lardo-inspired menu. B.S. Taqueria in Los Angeles offers a truly unique clam and lardo taco. Going even one step further with revered animal fats is the use of leaf lard. This kind of lard is the pork fat found around the kidneys. Bakers like those at Sullivan Street Bakery in Hell’s Kitchen use the non-porky flavored fat to create buttery and flaky crusts.

 

With the nose-to-tail movement being embraced by many millennials today, it’s no wonder that animal fats like fatback, lardo and leaf lard are making their marks in more and more restaurant kitchens.

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Shareables are What’s Next in Cocktails: Boost Bar Sales with Big Beverages

Nov 26, 2017

By: Mike Walls, Certified Cicerone®, Operations & Beverage

 

We often go to bars for comradery, to relax and spend time with our friends while we imbibe together. In years past that may have meant ordering a bottle of champagne or a round of shots, but one of the hottest trends in cocktails right now has us imbibing together in a whole new way. It is no longer a strange sight to see a group of friends at a bar using six 16-inch metal straws to share a giant golden vase filled with a delicious, boozy, handcrafted concoction. Bars and their patrons across the country are embracing these giant shareable cocktails because they are profitable, recognizable, often outrageous and they bring us together.

 

When deciding how to serve these enormous beverages, bartenders have a whole universe of untapped vessels to choose from, including vases, punch bowls, fish tanks, spigot dispensers, repurposed coffee equipment, and hollowed out melons. The right presentation can be a showstopper where the whole restaurant turns their heads saying, “I wonder what they got?” as the server triumphantly delivers the showpiece across the dining room. These often whimsical and over-the-top presentations also encourage another big trend in the bar and restaurant world: taking pictures that are Instagram-worthy. What better way to spread the word about your offerings than having your own guests feel compelled to show off their experience by plastering social media with pictures of your creations? The spectacle alone drives sales and gives the bar the opportunity to flex some creative muscle that the whole world can see, free of charge.

 

Much like any drink, these supersized cocktails can capitalize on other trends in a big way like using fresh, herbs, smoke and tea infusions. The size does not limit the quality or creativity of the drink and it can fit right in with the rest of the menu offerings. Many restaurants are even creating scalable cocktail lists from which the guest can order a cocktail from the menu as a single or in a number of shareable sizes depending on the number of guests. These cocktails can be batched, made fresh, mixed tableside or served deconstructed allowing the guest to customize and experiment as they drink.

 

Prices of $50 to $300 are not uncommon with punch bowls that serve a large group may be made with ingredients like fresh juices, cognac and a whole bottle of champagne. This is a serious increase in check averages similar to selling a high-end bottle of wine, most likely at a better cost; with only a bit more prep. It may sound crazy to charge so much for a cocktail, but the price is generally calculated by multiplying the number of servings by the price of a single drink (and usually comes in a few dollars less). Guests understand the math and don’t mind spending more money sharing in this better-than-bottle service experience with a group of friends.

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Implementing Superfoods Into Your Menu

Nov 08, 2017

Last week, we shared about how the “better-for-you” restaurant category is gaining a lot of traction in the industry. We explored different superfoods—nutrient-packed, healthy foods—like blueberries, salmon, and edamame. Other common superfoods include tomatoes, dark chocolate, almonds, quinoa, kale, and lentils. Superfoods provide several health benefits including an abundance of vitamins, minerals, antioxidants, and polyphenols.

 

If you’re looking to offer healthy dishes, superfoods are pivotal ingredients! Below we explore simple ways for you to incorporate superfoods into your menu.

 

Salad: Kale remains to be a popular and healthy green leafy vegetable of choice! A simple kale cobb salad (add hard boiled eggs, tomatoes, chicken breast, avocado) dressed with a balsamic vinaigrette is a healthy, nutrient-dense menu option.

 

Soups: Skip the heavy cream and go healthy and light. Wholegrain quinoa is delicious in soups. Mix in some hearty beef or chicken broth, lentils, veggies like broccoli (another superfood), and tomatoes for a delicious and hearty garden vegetable soup.

 

Pasta: Pumpkin doesn’t have to be just in pies and lattes! A pumpkin-filled ravioli with spinach pesto sauce is a great way to fulfill that craving for savory goodness. Pumpkins contain cancer-fighting alpha and beta-carotene while spinach is a great source of vitamins and iron.

 

Dessert: We all know how deliciously perfect chocolate and berries go together. Incorporating dark chocolate adds a wonderful decadent superfood full of antioxidants. Consider serving a dark chocolate mousse topped with strawberries, raspberries, and blueberries. If you want to get a little more exotic, serve the mousse with fresh goji and acai berries. For a breakfast spin, create a Greek yogurt parfait with berries and chia seeds, which are high in omega-3 fatty acids.

 

Drinks: Sweet iced tea can be very sugary! Try a sugar-free, refreshing iced green tea infused with fresh ginger root (ginger is known to help with relieving nausea, aiding in digestion, and reducing heart disease risk). A no-sugar-added watermelon drink is a tasty and refreshing beverage to add to your menu during the summer season.

 

There are so many options you can consider when working with superfoods. Next week, we will explore this further as we check out some awesome healthy restaurant menu items.