Get on top of
rising food prices
Rising food prices and the New Year’s VAT increase combine to make it more critical than ever for foodservice operators not only to source food and ingredients at the right price but also to maintain standards for customers if they are to remain profitable going forward. Sharon Glancy, managing director of People 1st’s training company, Stonebow, looks at measures that can help businesses secure up to 20% in efficiency savings
Last year, the UN Food and Agriculture Organisation indicated that meat prices may have hit a 20-year high while research* indicated that overall food prices had increased by 58%. In 2011, the outlook looks even more challenging for foodservice operators who have already had to contend with the VAT increase on 4 January. However all is not lost as rigorous household management could well throw up a surprising number of savings.
Waste not, want not
If we are to make key efficiencies in the kitchen, our absolute priority must be to reduce the amount of food we throw away. The hospitality sector is estimated to waste approximately three million tonnes of food each year. Around 65% of the waste is generated during food preparation.
How to reduce wastage
Correctly weigh the ingredients
If you want to minimise wastage, all your ingredients must be measured accurately. Check that your digital or analogue scales provide accurate readings. Make sure that you use the appropriate kitchen tools (e.g. spoons or spatulas) for different tasks and ingredients.
Implement a rigorous stocktaking regime. Ensure your supplies are delivered on time and that only the right quantities of food are ordered to secure key cost savings. Remember that money tied up in stock is not good practice; have minimum and maximum stock levels. If you are not sure how to do a stock check, here’s a quick breakdown:
- Count all the stock at the beginning of the period and put a monetary value on it (opening stock)
- At the end of the period, add the cost of purchases from all invoices together (purchases) and count all the stock on site putting a monetary value on it (closing stock)
- Add opening stock and purchases together and subtract closing stock to get the cost of food sold during period.
Specify what you need from suppliers
Negotiate the best deals and be very specific with your orders. When negotiating with your suppliers, be detailed about:
- The expected quality of the food
- The amount of fat on meat
- The shelf life of the food
- How the food is packed, e.g. vacuum packaged.
Consider buying prepared food such as cooked cold meats, boned fish and peeled vegetables as this will cut down on staff costs and wastage. Such items are also easy to store and manage.
Perfect your housekeeping
It should go without saying, but keeping equipment clean and well maintained helps to produce consistent top-quality cost-effective food. There is no use finding out that your oven does not work to full capacity at 200°C after your pasta dish has been in the oven for over half an hour – that’s food gone to waste.
If the financial analysts are to be believed, the price of this valuable commodity is set to rise substantially, resulting in increased costs for basics such as bread and pasta. Whether prices rise or not, the following are some key housekeeping tips that should be second nature in any catering establishment.
Measure it right
Sounds simple, but the most common mistake made in measuring flour is to dip the measuring cup into the flour instead of lightly spooning flour into the measuring cup. This can result in up to 25% more flour than a recipe calls for.
When measuring flour, do not shake the measuring cup holding the flour and do not pack it. Using a flat blade spatula, evenly level the flour with the top edge of the measuring cup. Don’t use the measuring cup to scoop the flour out of the container. As a guide, one cup of correctly measured flour should weigh approximately 112g.
Choice is good
From white to wheatgerm, malted wheatgrain and stoneground, the different types of flour available today make it easy for a chef or manager to seek cheaper alternatives. Explore the different types of flour available from your supplier, but ensure that the quality of your product does not suffer.
Look beyond wheat
The good news is that there is a wheat-free recipe for almost every wheat and gluten-based food item from bread and croissants to pies and cakes. Many people have wheat-related intolerances or allergies, so a mix of wheat-based and wheat-free products will not only give customers a balanced choice but also probably set you apart from your competitors.
Cuts of Meat
It is generally accepted that meat prices in 2011 will have increased from their 2010 levels. While there are a number of counter arguments on the level of increase, what’s important is preparation, therefore managers, caterers and restaurateurs should consider what steps they will take if and when the price of meat does increase.
Consider using cheaper cuts of meat, more unusual and cost-effective species of fish such as pollack or coalfish, or seasonal ingredients such as game. Do not cut down on quality, just shop smarter to produce dishes that have an excellent gross profit using substitute cuts of meat. For example:
- Beef onglet for prime steak cuts
- Neck fillet of lamb for lamb cannon
- Rib eye of pork for pork fillet.
Featuring local produce specific to your region is a great way of differentiating your business. Highlight it on your menu so that customers are aware of from where the food comes.
Get your profits right
It is more important than ever to get your gross profit margins right. Gross profit % can be calculated as follows:
- Calculate your total takings for the period (revenue from sales) less VAT if applicable
- Subtract all your costs for the period including labour, premises, other overheads and cost of food sold. This gives you your gross profit for the period
- Divide your gross profit by revenue from sales (less VAT if applicable) and multiply by 100 to get the gross profit %.
Make it clear to your chefs and managers what gross profit you expect them to achieve. You will be surprised by the number of managers and chefs who have no idea what gross profit their bosses expect of them.
New year’s resolutions
The rise in food prices is not a matter of ‘if’, rather it is a matter of ‘when’ so we must all prepare for it. To maximise profitability, we must drive for efficiency in our kitchens and we must cut down wastage. While never compromising on quality, make sure your ingredients can be used in as many different dishes as possible, consider using cheaper cuts of meat and where possible source local food. By following a few simple guidelines and implementing best practice methods, we can all aim for a profitable 2011.
Stonebow is the training company for People 1st, the sector skills council for hospitality, leisure, travel and tourism. Visit www.stonebow.co.uk for information on ‘Focus on Food for Profit” courses