BUSINESS MENU ENGINEERING SET

MENU ENGINEERING:

MENU ENGINEERING BEST SUIT FOR BUSINESS LIKE:

BUSINESSES FOODS EDUCATION.
F&B CHAIN.
INDEPENDENT RESTAURANTS
.
RESTAURANTS CHAIN.
HOTEL RESTAURANTS, CAFETERIA.
HOTEL RESTAURANTS CHAIN.
ALL YOU CAN EAT TYPE OF RESTAURANTS
CATERING.
DARK KITCHEN.
SENIOR LIVING.
FOOD PRODUCTION.
RETAILER WHEREHOUSE STORE OF PRODUCTS AND FOODS.
WHOLESALE WAREHOUSE STORE OF PRODUCTS AND FOODS.
OTHER.

The Menu Engineering Worksheet for Excel & Google Web-based SPREADSHEETS, contains all the formulas to automate your menu calculations. Create profitable menus and identify opportunities, losers, workhorses and winners, among your recipes. Other kinds of classifications include a menu engineering matrix divided into another names four quadrants, with the same outcome like: stars, plow horses, puzzles, and dogs. Where exactly these quadrants lie on the matrix is dependent on your sales and gross profit margin targets. As each menu item is plotted in the matrix, you can see how it's performing in popularity and profitability compared to the rest of your menu.

Identify The Strengths and Weaknesses of Your Menus:

Menu engineering is part of science and part art. Successful restaurants regularly evaluate the popularity and profitability of the items on their menus, both food and drinks.

The right tweaks to your recipes and menu layout can boost revenue and even lift your bottom line. The hard part is figuring out which dishes to tackle first. The sheet will tell you exactly that.

After filling out this menu engineering worksheet, you will understand each menu item’s performance. Is it a winner, loser, opportunity or workhorse? The template will tell you what to cut, optimize or promote.

How Does It Work?

Menu analysis is a delicate matter of matching sales numbers with food costs per recipe. There is typically a lot of numbers crunching involved but you don’t have to worry about that because the spreadsheet takes care of the calculations.

All you have to do is fill out the number of times a menu item was sold in a specific period, what the sell price was and the item cost.

The menu engineering template calculates:

Item Gross Profit
Sales Mix %
Total Cost
Total Sales
Total Gross Profit
Profit Contribution
Popularity Contribution
Performance Group (winner, loser, Opportunity, Workhorse).
Crafting Culinary Success: The Art and Science of Menu Engineering

Menu engineering combines creativity and data analysis for an optimal dining experience, focusing on item selection, pricing, and placement to align customer preferences with business goals:

Boost Profits: Optimize pricing and item placement.
Customized menus: Tailor to preferences and trends.
Minimize Waste: Efficient inventory management.
Increase Sales: Strategically promote high-margin items.
Stay Agile: Quickly adjust to market dynamics.

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If you're ready to take your menu engineering chops to the next level, you're in the right place. Our Menu Engineering Spreadsheet is at the heart of your menu engineering efforts, helping you answer questions like: Why are my restaurant profits dipping? What's my most popular menu item? Which items should I spotlight to yield more profit? How can I build a predictable menu pricing model in the future?

How to Use This Template. You're probably eager to get started, but there are a few things you need to know first.

This template is prepared for a certain time period. We chose Q1, Q2, Q3, and Q4, and The YEAR CONSOLIDATE (Q1+Q2+Q3+Q4), but you can feel free to that to whatever works for you, whether it's monthly, or every six months. Just make a copy of an existing tab and rename it. This template also requires you to do a little math on your own. You need to know how much each menu item costs, which means you'll need to factor in food cost for specific portions of items. You'll also need to know the popularity of items sold on the menu. This is just the number sold within a certain period and should be easily found on your point-of-sale system.

The only fields you need to enter are highlighted in gray. All the others will auto-populate, including your profit category, popularity category, and menu engineering category. You'll see the item pop up on the scatter plot as soon as all the grey areas in the line are populated.

According to a Gallup poll, guests only look at your menu for 109 seconds before ordering. Menu engineering uses real data to show you which items are the most profitable and should be your main focus. It also reveals which ones are dragging you down and need to be removed. See how your menu items are performing with our free menu engineering worksheet.

The menu engineering worksheet explained
What is menu engineering?
How to calculate gross profit margin
What to do with your menu engineering results
How to design your menu for profit.

The menu engineering worksheet explained.

Our worksheet simplifies your menu engineering efforts. And it's free. To get started, you just need a little bit of information.

Menu item name & price Open your menu and add items and their prices from a section. For the best results, only put in similar menu items. Like entrees, beverages, sides, or appetizers. That way you're comparing apples with apples.

Menu item cost:

Ask your chef or kitchen manager for the cost of each item. This is also called your recipe cost. Ideally, you should be tracking these with inventory management software. But if you just need a quick calculation, here's how to do it.

List the ingredients and measurements of a menu item
Divide each ingredient package cost by the number of measurements in the package to get each ingredient cost
Add up the ingredient costs to get the menu item cost (recipe cost)

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Don't get stuck on small costs, like spices. If you want to get that granular, inventory management software is the way to go.

Before we were doing our inventory by hand. With an integration between my POS and inventory management software, we were able to cut down at least 20 hours a week on inventory alone.

Number of items sold:

To determine the popularity of menu items, we must look at your product mix or PMIX—a report that shows sales data for each item over a set period. This should be in your POS reporting. Typically, a restaurant owner will look at PMIX for a month. But if you have data for a quarter of a year, that's even better.

Popularity & profitability targets:

These are your targets for your sales (popularity) and gross profit margins (profitability). For popularity, look at your top 3 to 5 selling items and set your target just under these numbers.

For profitability, a good gross profit margin is around 70% on average. But this can vary. Full-service restaurants may shoot for higher gross profit margins since part of the cost of service must be paid for thorough prices. On the flip side, counter-service concepts might aim for a lower gross profit margin because of fewer employees.

What is menu engineering?

Menu engineering analyzes your menu performance using each item's popularity and profitability data. For popularity, we look at how many of each item were sold over a period of time. For profitability, we find an item's gross profit margin. With these two numbers, your menu items can be plotted on a graph, also known as a menu engineering matrix.

After that, the menu engineering matrix is divided into four quadrants—stars, plow horses, puzzles, and dogs. Where exactly these quadrants lie on the matrix is dependent on your sales and gross profit margin targets. As each menu item is plotted in the matrix, you can see how it's performing in popularity and profitability compared to the rest of your menu.

How to calculate gross profit margin:

The gross profit margin of an item compares its price to its cost. This is expressed as a percentage. When you enter your data, our restaurant menu worksheet automatically calculates your gross profit margin. But if you want to do it by hand, here's how.

Subtract the item cost from the item price to find that item's gross profit. Then divide the gross profit by the item price and multiply by 100 to get the item's gross profit margin. From here, you can calculate its food cost percentage by subtracting the gross profit margin from 100. Here are the formulas.

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Gross profit: Item price - Item cost
Ex: 15.50 - 5.75 = 9.75

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Gross profit margin: Gross profit ÷ Item price x 100
Ex: 9.75 ÷ 15.50 x 100 = 63%

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Food cost percentage: 100 - Gross profit margin
Ex: 100 - 63 = 37%

What to do with your menu engineering results:

When you enter your data, the menu engineering worksheet automatically categorizes your items as stars, plow horses, puzzles, or dogs.

Stars are your best-selling and most profitable items.
Plow Horses sell well but aren't meeting your profit goals.
Puzzles are designed for profit, but aren't meeting your sales goals.
Dogs aren't reaching any of your targets.

Let's look at some menu engineering tricks for each category.

A menu engineering matrix shows which quadrants your menu items fall into:

Stars: High profitability. High popularity.

Your stars are what your guests love about your restaurant. If you haven't already, consider developing your restaurant brand around these menu items. Here are some ways to start.

Put your stars at the top left of each menu section.
Call them out as recommendations among your menu offerings.
Add stars to your online ordering (if they travel well).
See what guests are pairing with them (PMIX report) and create more stars.

Plow horses: High popularity. Low profitability.

Plow horses are liked by your guests, but they may not be bringing in enough profit. You've got two options here. You can try to lower the cost of the dish without changing its popularity. Or you can raise its price. Just don't do both at the same time. Some options are to:

Reduce the portioning (if guests often don't finish it).
Find a vendor that offers the ingredients at a lower cost.
Modify the ingredients so the recipe cost is cheaper.
Raise the price to reach your target gross profit margin.

Puzzles: High profitability. Low popularity.

Puzzles can be confusing. They're designed for profit, but people don't order them. Look at where your puzzles sit in the matrix. If they're close to your popularity threshold, they could be worth saving. If not, maybe it's time to get rid of them. Consider these actions.

Compare your best puzzles to your stars and see how to improve them.
Create deals around your puzzles to get more people to try them.
Remove puzzles that have an extended period of little to no sales.

Dogs: Low profitability. Low popularity.

No profit or sales. From your guests' eyes, dogs are your worst menu items. If a dog happens to fall near where your profitability and popularity thresholds meet, then you may be able to revive it. Otherwise, these menu items are the first places you should start when downsizing your menu.

Follow the puzzle recommendations to increase popularity
Follow the plow horse recommendations to increase profitability
Remove from your menu if the item continues to underperform

Reporting has helped us track our dessert sales. We were able to see that by using a dessert cart vs a dessert menu, we were able to increase our dessert sales by 18%, about $25,000 in sales.

How to design your menu for profit:

Once you've analyzed and modified your recipes and pricing (perhaps you've even removed a few or several items), it's time to utilize restaurant menu design to make your menu stand out. Let's explore how to do that.

Establish your brand:

Your brand represents how guests feel when they interact with your restaurant. If you haven't already, work with a restaurant menu design expert to create a logo system, brand color palette, and unique font suite.

A good designer can also develop your menu layout with wayfinding so guests can see your stars and easily navigate your menu.

Or, to avoid printing restaurant menus altogether, consider moving your entire menu online and giving guests access to it on their phones through QR codes.

Tap into menu psychology

When considering your menu design, you can utilize a few techniques to make your food more enticing and your prices more subtle. Let's explore some of these concepts

Prices:

Put prices after your menu description and remove currency signs to deemphasize pricing. Also, consider having prices end in .00, .25, .50. or .75 instead of .99 or .95 to avoid looking salesy. And for a more upscale feel, use flat prices without cents.

Design

Left-align your text for stability. Avoid using a script font in your descriptions, favoring an easy-to-read font. Make your menu items considerably more prominent than your descriptions, keeping in mind guests don't want to read every word but would instead scan headers and only read what sounds good.

Text

Keep your descriptions short. Cut out unnecessary words to show you value your guests' time. Avoid overusing superlatives and excessive adjectives. Tell guests how items are prepared—grilled, marinated, sauteed, oven-roasted. Be more descriptive with higher-priced items, like entrees, and leave descriptions of simple items, like beverages. Update your website.

Your website should be the first place your guests go online when they want to learn about your restaurant, view hours of operation, or order takeout and delivery. That's why it must be up-to-date, branded, and connected to your online menu. If your website needs refreshing, consider using a website service that can help you get it on brand and make it easy to navigate.

Plug in online ordering

As mentioned, online ordering is critical to making the most profit with your menu. It enables customers to order takeout, and delivery from anywhere outside your restaurant and allows guests to access your menu in-house through QR codes at their tables or near your entrance.

When your online ordering integrates seamlessly with your restaurant POS system, guests can easily order and pay from your newly-optimized menu right from their phones with just a few taps. Even if you already have online ordering, you can use your POS's data analytics tools to improve its profitability.

Menu engineering is profit engineering

Although inflation and food costs are uncontrollable, your restaurant doesn't have to be. With precise menu engineering, you can know what items are performing the best and create the most profitable restaurant menu possible.

As trends change, successful restaurants are using menu engineering to stay current with customer preferences and adapt their menu ingredients. When inventory management software integrates with a modern POS system, tracking these trends becomes automatic, making driving more profit easier.

Many restaurant companies struggle with stagnant sales, reductions in traffic, and lower margins than they’ve had in the past, all because costs never seem to go down. These companies reluctantly accept lower margins as a way of life (or death). In some cases, restaurants will blindly raise prices to try and remedy the problem, but over and over again we’ve seen that result in an even deeper erosion of traffic.

Menu engineering is somewhat complex and time-consuming, but a well-engineered menu can be a game changer with regard to increased profitability. In this post, we’ll show you how.

What Is Menu Engineering?

Menu engineering is the study of the profitability and popularity of menu items. It looks at how these two factors influence the placement of every item on a menu.

The goal is simple: to increase profitability per guest. Menu engineering can often deliver as much as an 8% to 12% increase in profit margins in the first year.

Menu engineering informs marketing and shows you which menu items to promote. It provides a pathway to eliminating underperforming items, either because they have a low margin or just don’t sell. Menu engineering guides you on where to cut costs, where to raise prices, and where to re-develop a recipe to make it more profitable.

The process is not only useful for improving the profitability of a main menu, but it can also inspire better use of limited-time offers (LTOs) and can make a huge impact on beverage, happy hour, and dessert menus. Lastly, by having a well-engineered menu, you are in control when there is a huge commodity swing. You can plan ahead and know the future before it takes a bite out of your bottom line.

How Menu Engineering Works:

Step 1 – Build a profitability/popularity spreadsheet.

This isn’t an ordinary spreadsheet. This is the guiding force in menu engineering. It includes every menu item along with food costs, pricing, and sales history. Here, you can categorize each menu item by profitability and popularity. Usually, there are four categories ranging from winners to losers. Here’s an example of how we do it.

Step 2 – Assess your menu items and re-develop recipes where needed.

Meet with the experts (of course, that’s the Food & Drink Resources team) along with your marketing, financial, and culinary teams to build a game plan and establish next steps, which may include reordering a menu, modifying recipes to reach a lower margin, eliminating or replacing slow-moving items.

Step 3 – Price appropriately and consistently.

Pricing of each item also plays a key role in driving profitability. It may mean raising prices to get you a better profit margin or lowering prices to put an item in a better profitability/popularity category. It’s also an opportunity to eliminate unnecessary pricing tiers. Some items are incredibly price-sensitive due to market conditions or competition. Knowing where to adjust prices and eliminate unnecessary price tiers can result in large shifts in profitability.

Step 4 – Re-configure the design of the menu.

Yes, proper menu design includes up-to-date logos, on-trend fonts, and new pictures, but it also means employing proven techniques for successful menu engineering.

For example, people tend to read from left to right at the top of a menu, then diagonally down to the bottom of the menu, and then left to right again. This is called “z-shaped deliberate speed reading.” By placing the right menu items in the right place along with strategically placed photos, you’d be amazed how much you can increase tickets.

Similarly, photos sell more than a typical line listing. But you can’t have photos of everything. Choose to include photos of items that are both popular and profitable. (See step one above.)

Why Food & Drink Resources?

Food & Drink Resources has a team of experts with years of experience in menu engineering, and we can provide even more tips for maximizing profitability than we could ever write in a blog.

If you want to learn more or find out if you could use FDR menu engineering, contact us. We’d be glad to share our insights.

Menu Engineering Spreadsheet Template

Menu engineering helps chef’s kitchen managers and operators quickly see which dishes make money, which ones just take up space on the line, and where to focus limited time and ingredients for the biggest impact on profit and guest satisfaction. You don’t need to spend money on a program to use a menu matrix. There is a free tamplate you can download on this page and just plug in your data.

What the template actually does.

You’ll see in the video tutorial that the menu engineering template organizes each menu item by how often it sells (popularity) and how much profit it brings in per plate (profitability), then plots every item in a simple matrix. By comparing items to find your stars, dogs, plowhorses and puzzles within the same category (for example, all dinner mains), you get a realistic picture of what is truly working on your own menu, not against industry averages or theory.

Managing your kitchen using sales data

This template turns your existing sales and cost data into clear, actionable visuals you can use to make informed management decisions. It shows you where to raise prices, where to tighten recipes or portions, and which items can be removed without hurting guests or the bottom line.

Concrete benefits in the kitchen

Protect margins by shifting focus toward items that are both popular and profitable, instead of pushing “chef favorites” that quietly lose money.
Streamline prep and inventory by identifying low-selling, low-margin dishes that create waste, clutter your walk‑in, and slow the line down.
Improve guest experience by doubling down on “star” items that guests already love, then featuring them more prominently on the menu, in staff training, and in promos.

How to use the menu matrix template in your food operation

The ultimate goal is straightforward: optimize your menu to boost profits while keeping your guests satisfied and returning.

Inputting Initial Data

The first step in leveraging the menu matrix is inputting the data. To do this, you’ll need:

•Costs: Detail the ingredient cost for each item on your menu. Remember, every penny counts, so be as precise as possible.

•Prices: Input the selling prices of your dishes as they appear on the menu.

•Sales Volume: Record the number of each menu item sold over a selected time period. You could compare by the week, month, or any period that reflects typical business levels.

Once your initial data is in place, the FoodCostChef Menu Matrix Spreadsheet Template works its magic, sorting each menu item into one of four distinct groups based on profitability and popularity. Here’s a deeper look into what these categories mean and some strategic considerations for each:

•Stars: Yes, they are called stars for a reason. They make you the company money and they’re popular with your guests. They are the backbone of your menu, bringing in steady revenue and customer satisfaction. Since they are already performing well, major changes are optional. However, continuous monitoring for consistency in quality and cost is crucial to maintaining their star status.

•Plowhorses: These are your crowd-pleasers with lower profit margins. They are often considered comfort dishes or staples that your regulars expect. While it’s tempting to maintain the status quo due to their popularity, there’s a strategic opportunity to tweak ingredient sourcing or preparation methods to enhance profitability without compromising taste or quality.

•Puzzles: High profitability but low popularity defines these enigmatic items. They can potentially be significant profit drivers if they can gain traction with your clientele. Consider altering their placement on the menu, enhancing their descriptions, or incorporating them into specials to increase their visibility and appeal.

•Dogs: Items in this category are neither profitable nor popular and are prime candidates for removal. However, before deciding to 86 these dishes, evaluate if they serve a specific purpose, like catering to niche dietary preferences or using up inventory that could otherwise go to waste. Removing them can streamline your operations and reduce costs if they don’t serve a strategic purpose.

This analytical approach allows you to strategically fine-tune your menu based on solid data, aligning offerings more closely with your business objectives and customer preferences.

Your menu items will end up somewhere in this menu matrix graph.

Decision-Making Based on the Menu Matrix

Once you categorize all of the menu items you can refine your menu:

•Menu Item Tweaks: Adjust recipes or presentations for Plowhorses to increase margins or revamp Puzzles to boost their appeal.

•Price Adjustments: Consider subtle price increases for Plowhorses without compromising their popularity or test price reductions for Puzzles to make them more attractive.

•Promotional Strategies: Use your marketing channels to highlight Stars and try to convert Puzzles into Stars with targeted promotions.

This structured approach streamlines your menu and aligns it more closely with your business goals, ensuring that every dish not only tastes good but also contributes positively to your bottom line. With these strategies, your menu becomes a powerful tool for achieving financial success and customer satisfaction.

Menu Engineering using Microsoft Excel

Advanced Strategies in Menu Engineering

Accurate menu costing is the cornerstone of effective menu engineering. Here’s how to ensure precision:

•Regular Updates: Ingredient prices fluctuate due to seasonality and market changes. To maintain accurate margins, regularly update your cost to reflect these changes.

•Comprehensive Food Costing: Include all components of a dish in your cost analysis—consider seasonings, garnishes, and cooking oil, which are often overlooked but can significantly impact the cost.

•Waste Management: Track and minimize waste by adjusting portion sizes or reevaluating the usability of your kitchen’s by-products in other dishes.

•POS adjustments: The price of a menu item is always theoretical. Your POS report will always have adjustments for promotions, discounts, refunds, etc. You’ll want to take the total sales dollars and divide that amount by units sold to get your actual selling price of a menu item.

Testing and Revising the Menu

Continuous improvement through testing and revising is crucial:

•Split Testing: Try different versions of a dish (e.g., ingredient tweaks, presentation changes) in a controlled environment to see which performs better regarding customer satisfaction and profitability.

•Seasonal Adjustments: Align your menu with seasonal availability of ingredients not only to lower costs but also to keep the menu exciting and relevant.

•Customer Feedback: Utilize customer feedback to decide which dishes to modify, keep, or remove. Management can gather this through direct interaction, server feedback, comment cards, or online reviews.

Leveraging Psychological Tricks

Psychology plays a significant role in menu design. Here are some tricks to guide customer choices:

•Menu Descriptions: Use enticing and emotive language to describe dishes. For example, instead of “chocolate pudding,” use “velvety chocolate pudding with a hint of Madagascar vanilla.”

•Item Placement: Place high-margin items in prime spots based on eye-scanning patterns, such as the top right corner of the menu or the first and last items in a list.

•Colour and Typography: Utilize colours and fonts that match your brand and appeal to emotions, encouraging diners to order more. For instance, red and yellow stimulate appetite and attention.

Utilizing Technology

Embrace technology to streamline the menu engineering process:

•POS Integration: Use POS data to track sales and popularity in real time, allowing for quicker adjustments.

•Digital Menus: Digital menus on tablets allow for dynamic changes and can include high-resolution images to entice customers.

•Data Analytics Tools: Employ advanced analytics to dissect sales data, predict trends, and make data-driven decisions about your menu.

Maintaining your menu management can take time and effort. The key to making it manageable is to set up systems that involve your entire team. The more staff you get on board with this, the more important they will feel about their contributions and how important this is for the entire operation.

USE THIS LINK ONLY FOR EDUCATIONAL PURPOSES, AND AT YOUR OWN DISCRETION, AND RESPONSABILITY; TO LEARN MORE OF THIS EXCEPTIONAL BUSINESS TECHNIQUE, NAMED MENU ENGINEERING.

https://docs.google.com/spreadsheets/d/e/2PACX-1vSsQf2cGpnt1x94FBeqHdRxymRLoPMAeHiasSu3qUoBAlsz366VHhU1YSQOyJUrAtO47GbQ3Kr1tAi6/pubhtml

https://docs.google.com/spreadsheets/d/e/2PACX-1vSsQf2cGpnt1x94FBeqHdRxymRLoPMAeHiasSu3qUoBAlsz366VHhU1YSQOyJUrAtO47GbQ3Kr1tAi6/pub?output=xlsx