Menu engineering is an art and a science, but it’s the science part that trips up most restauranteurs. In this article we’ll look at how to gather the right data so the science of designing optimized menus becomes easier.
Many restauranteurs argue that the term “menu engineering” has more to do with menu design layout and customer psychology than anything else. Others will argue that menu engineering is less about layout and colors and more about pricing and profitability. Both would be right, because menu engineering is truly an art and a science. Where there’s no argument is that the most successfully engineered menus have a major positive impact on sales and profitability.
Where to begin?
The first step with engineering an optimized menu is always the same: you need to work with the right data.
Follow these guidelines to ensure your data set includes these attributes for each menu item:
1. Transaction level detail:
- The number of times each menu item was sold and how much money each item sold for at every restaurant the menu item is available.
- Date range: The longer a timeframe for the data, the better. This way you can compare against previous periods.
2. Ingredient Costs:
- Ingredient cost for each menu item will determine its profitability; but, remember that all costs must be calculated and reported the same way across all your restaurants.
3. Menu Segmentation:
- Categories like entrees, appetizers and desserts or subcategories such as breakfast, lunch or dinner will allow you to compare like-items. Just like food ingredient costing, menu segment categories must be consistent across the entire data set so that the results of the analysis will be useable.
The core aspects of “science-side” menu engineering are analyzing customer demand, percentage sales contributions, ingredient costs, and profit margins while easily identifying your most (and least) profitable menu items. Where do you find the data to make these calculations?
A quality business intelligence and analytics tool will do all of the heavy lifting. The best restaurant systems will access a comprehensive data warehouse pre-populated with all the data (and a lot more) mentioned above. This data is accumulated and driven by your enterprise back office solution.