What to do with rising food costs

High food prices here to stay, says UN and OECD
“Hefty food bills are here to stay, according to a report backed by the United Nations, which warns of another ten years of climbing prices.
The OECD’s forecast is that over the coming decade, real prices for cereals could average as much as 20pc higher and those for meats as much as 30pc higher, than between 2001 and 2010.”

As most business operators in the hospitality trade will tell you they’ve been living with these rising cost & the UN & OCED report has only quantified the rising food costs. So how can you absorb costs like this & be profitable. A good place to Start is with your current menu

Menu planning and the importance of the menu is an essential tool in creating the power to bring customers in though your front door. The menu is a highly important factor not only because of its content but also in the way it is set out. The way dishes are displayed and its use to maximize profit. When creating the menu – it is vital you understand the basic principles – Know your customer base. Know your produce & how to match/marry produce. What food gross profit margin you want to achieve & how much can you charge per item/dish on the menu

Okay, assuming that you have established your customer base via location or social media & old fashion word of mouth. Let’s move on to the produce/ingredients & how they marry together. Most business will leave this to the head chef. It normally takes the form of the following brief – write me a menu on what you want to cook? Or let’s write a menu that you can cook well & what the customers want. The latter statement tends to work much better as it satisfies the chefs cooking & creative needs & focuses on the customers taste.

Gross profit margin – last months article recommended a gross profit margin of 70 percent. This will in turn assist in pricing the dishes on the menu. So be for you do this & looking at the UN & OCED figures can you combat this? Do you get a pricelist from your supplier? Do you negotiate quartly price agreements with key suppliers? Do you know who much you spent over the past 12months with key suppliers? Do you get quotes from the “usual” suppliers? Do you check invoice prices with agreed price list? Are you using a branded product when a yellow label product is better value? Do you employ a stock taker to measure your food gross profit? If you answer yes to all these, well done you’ll be ready for the decade of rising prices.

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