Business and Operations
The Pizza Chef: April May 2012
By Diana Coutu
Controlling food costs
By Diana Coutu
Controlling costs and maintaining profitability are two of the most challenging things about running a successful restaurant.
Controlling costs and maintaining profitability are two of the most challenging things about running a successful restaurant. You must be relentless in this daily battle if you want to make money in the pizza business. Proper food controls and accurate recipe mapping are absolutely essential to ensure profits are not thrown in the garbage or given away. Your weekly food cost should be 30 per cent if you are serious about keeping the doors open without constantly injecting money into your business.
Keeping your restaurant stocked with enough products to not run out of anything, but not so much on hand that it spoils, requires lots of proper planning and accurate projections. Timing is the the only difference between inventory and waste. A two-day-old case of Roma tomatoes is inventory and has value; a two-week-old case of Roma tomatoes is waste that just cost you money. Keeping your equipment properly maintained is one of the most important ways to control waste. Inefficient equipment will cost you money in more than one way.
Any refrigeration equipment should always be between 1 C (34 F) and 3 C (38 F) to ensure product quality and food safety. Many operators view equipment maintenance as a bother and only fix things when they break. This is false economy. It will cost much more to fix something after it breaks than it will to routinely maintain equipment to ensure it doesn’t malfunction. Properly maintained equipment uses less power and will keep the temperature more stable and extend the life of your product. This, in turn, saves you money, frustration, and downtime. If your walk-in cooler breaks down, you could potentially lose thousands of dollars in perishable product and subsequently sales. We use an equipment maintenance schedule at the pizzeria, which allows us to keep track of when we have serviced our equipment last and when we need to do it next. This is a very easy thing to incorporate into your restaurant. A simple piece of paper on a clipboard will do the trick. If you really want to get fancy, you can use an electronic organizer. We use a couple of old iPhones at our pizzeria and they remind us when we need to service our equipment in case we forget.
Another way to control your food cost is to accurately map out every recipe on your menu. It’s a simple exercise that will give you accurate information on how much it costs you to produce each item on your menu, which, in turn, allows you to price your products properly in order to turn a profit. You need to have a standard recipe for each item on your menu to accurately determine how much each recipe is costing you. You should have recipes for everything that you sell. This helps to ensure consistency of the product and allows you to project how much product you will require to do a given amount of sales.
Here is an example of how we map out a 12-inch cheese pizza. The standard recipe would include a 12-inch dough ball, five ounces of marinara sauce, five ounces of mozzarella and a pizza box. Let’s calculate the cost: dough ball = $.35, five ounces of marinara (100-ounce can costs $10 or $.10 per ounce) = $.50, five ounces of mozzarella (one pound of mozzarella costs $4.80, one pound = 16 ounces, one ounce of mozzarella costs $.30) = $1.50, a box costs $.45 (a bundle of 12-inch boxes costs $22.50, one bundle = 50 boxes, $22.50 divided by 50 = $.45). Add all these numbers together – $.35, $.50, $1.50 and $.45 – and you now know that it costs you $2.80 to make a cheese pizza. At a 30 per cent food cost, you will need to price your pizza at $9.33 to meet your projections. (Divide your cost by 30 per cent and that number will tell you how much you should charge for that pizza.) This is a very simplified example but you get the idea. It’s that easy.
Many operators have never done this exercise and are unaware of their true food costs. If you can use a scale and are comfortable using a spreadsheet then you can easily do this. It will take some time to do this, especially if you have several different sizes on your menu, but it is well worth taking the time as you will have a much better understanding of what to charge for your products, and you will definitely have more money in the bank at the end of the month.
Diana Coutu is a two-time Canadian Pizza magazine chef of the year champion, internationally recognized gourmet pizzaiolo, co-owner of Diana’s Gourmet Pizzeria in Winnipeg and a member of the board of directors for the CRFA. In addition to creating award-winning recipes, Diana is also a consultant to other pizzeria owner/operators in menu development, creating systems to run a pizzeria on autopilot, along with marketing and positioning to help operators grow their business effectively and strategically. She is available for consulting on a limited basis. For more information contact her at Diana@dianas gourmetpizzeria.ca.