One of the best places for operators to look when trying to cut costs is in the trash.
“You’re looking for overproduction and waste,” Dunbar says.
If the evidence is there, encourage the crew to cook only as much product as is needed at any given time and avoid over-ordering inventory that will spoil before it gets used.
“The No. 1 thing you can do is forecast better,” Dunbar says.
At Florida-based fast-casual Lime Fresh Mexican Grill, fresh produce is delivered daily, so restaurants purposefully run out of food at the end of the day to minimize waste.
Focusing on portion control in the back of the house can help, too. At Johnny Rockets, the crew used to use knives to spread sauce on sandwiches. Switching to pre-portioned ladles helped make product last longer and curbed customer complaints about excess sauce. By reducing the amount of mayonnaise used on each sandwich by just one-eighth of an ounce, the company saved $60,000 on a national basis, says Marilyn Biscotti, vice president of purchasing and product development.
The chain also reduced waste by updating its recipe specs. Although the company changed to a new clean lettuce product, crewmembers were still removing two layers of leaves because instructions hadn’t been updated.
“It was just a waste,” Biscotti says. “There was no longer any need to be doing that.”
“One of the things I encourage people not to get caught up in is labels,” Arthur says. “Just because you use brand X doesn’t mean you have to use brand X forever.”
One of his clients, a six-unit deli operator, was able to save about $140,000 last year just by changing the turkey he served. “He didn’t buy the same brand of turkey, but he bought the same quality of turkey,” Arthur says.
Items such as beverages or cheeses, which can be matched by moisture and fat content, are relatively easy to swap; others should be substituted with caution.
“If it’s a signature item, you don’t want to monkey around with it if you can’t come close to that profile,” says Arizona-based restaurant coach David Scott Peters, of TheRestaurantExpert.com.
To ensure a smooth transition, adequate testing should be performed in advance, says Arthur Rumpf, technical manager of food programs at global quality assurance company Specialized Technology Resources. Characteristics such as shelf stability, food-safety risk, and consumer perception should all be evaluated before any change is made.
While switching specs can certainly save money, experts agree that it’s important not to confuse a cheaper product with one of lower quality. Doing so can actually cost your business more in the end.
Dunbar relates a story of a client he worked with at a regional burger concept who switched to buying beef patties with a higher fat content than the company’s 80/20 spec. As a result, consistency became an issue, and the new product required more work to clean the grills.
“He would have been far better off staying with the spec and not going to the lesser quality—especially when he wasn’t getting that much of a price break anyway,” Dunbar says. “He ended up costing himself.”
In some cases, it can actually pay to choose a more expensive product. Villa Enterprises used to shred five-pound blocks of mozzarella in house. When cheese prices reached an all-time high in 2008, the company did a cost analysis to see where it could save. By paying more for a pre-shredded cheese, they found they could get a higher yield.
“Although we’re paying more for the product, we’re saving money in the long run,” Steinberg says.
The U.S. Chamber of Commerce estimates that employee theft costs businesses $40 billion each year.
“Every product that doesn’t get sold is a lost opportunity,” Peters says.
To ensure your restaurant doesn’t miss another chance to make a profit, vigilance is a must. Peters suggests using key items reports and waste sheets to ensure all product is accounted for at the end of the day or week.