These five simple systems can help you rein in food costs

By David Scott Peters, TheRestaurantExpert.com

Most caterers point to their food distributors and ask me how they can ever make a profit when rising food prices seem so out of control. The truth is food prices are just a small part of your challenges. What you do with your product has a much bigger impact than what you’re paying for product.

Now, don’t get me wrong; I am not saying you’re not supposed to ensure your vendors are treating you fairly. I’m just saying that with the right systems in place, they won’t have that much of an impact.

Before we get into how to control your food cost and make more money, I want to make sure you understand that your food cost is not purchases divided by sales; it’s beginning inventory, plus purchases, minus ending inventory, to give you the dollar value of the product used, thereby giving you your cost-of-goods-sold number. To get the percentage, divide usage by gross sales for that time period.

Now you’re ready to use these five simple systems to cut your food cost:

1. Descending Dollar Report: Gather all your food purchases for the past three to six months from every vendor or store where you get food. Next, put all that data in a single spreadsheet, and sort it according to what you spend the most money on. What you probably don’t know is that the top eight to 10 items you purchase represent 50 percent or more of every food dollar you spend on food. Once you know your top 10 purchases based on dollars spent, talk with your sales people. Ask them if they will give you a better price if you promise to purchase all of one or each of the products from them. If not, do they have a like-quality or better-quality product for a lower price? (Never substitute product of a lesser quality, however!) By going through this exercise, you could potentially reduce your food cost by 1 to 3 percentage points buying the same groceries you do now.

2. Receiving Procedures: Make sure you only let a key employee or manager who has been trained on receiving deliveries check them in. They should check for product pricing, catch weights, temperature, quality and quantities. Whether by accident or on purpose, some vendors end up charging you incorrectly, sending you bad product and much more, all costing you money you didn’t need to spend. By the way, your vendors know who checks and who doesn’t. By implementing this simple check and balance, you could easily save $300 to $500 a week in food purchases.

3. Key Item Report: This is a clipboard system that prevents expensive or key products from being stolen. It’s a simple count sheet for 10 to 15 items you want to keep track of on a daily or shift-by-shift basis. List the product and how many portions are on the line or cooler. Then write in how many were prepped that day or shift, depending on how much control you wish to have. Starting amount plus prepped gives you how many portions you could have sold. Next, go to your point-of-sale system and find out how many of that product you have sold. Subtract that from what you could have sold. This will tell you how many you should still have in stock. Now go visually check the actual count with that number. If you are short product, it better be on the waste sheet. If not, you either have theft or worse: managers not using the systems you put in place to control your food cost. The sole purpose of this system is to keep honest people honest and discourage theft.

4. Waste Sheet: This is a clipboard system in which you mark down every product/item that is wasted, spoiled, dropped, over-cooked, etc., plus who wasted it, the cost of that product and the reason why it was wasted. Most back-of-house team members think this is an “I gotcha!” It really isn’t. It’s a proactive management tool. When you discover there is a problem, you can fix it today rather than 15 days into next period, when your profit-and-loss statement says your food cost is high. By then, it’s too late because you’ve lost that money.

5. Portion Controls: If your ideal food cost is 30 percent, and you over-portion items by just 10 percent, you end up making a 30 percent ideal food cost 33 percent. If your catering business does $1 million in food sales, that’s the equivalent of $30,000 down the drain just from over-portioning. You need to put portion controls everywhere you can in your kitchen; have a manager be responsible for checking a line checklist to ensure portion controls are being used and followed. You will steady your food cost and see increased sales. The more consistent you are, the more likely your sales will go up because of returning customers.

If you are looking at your food cost and wondering why it’s running so high, first make sure you are calculating the numbers correctly. Once you have done that, start implementing these five simple systems to control your food cost, and watch it drop while your bank account grows.

About the Author

David Scott Peters is a restaurant consultant, event speaker and founder of TheRestaurantExpert.com, a company committed to the success of independent restaurants. TheRestaurantExpert.com 
offers an exclusive online restaurant management software designed specifically to meet the complete operational needs of independent operators. Combined with one-on-one coaching and group workshops, TheRestaurantExpert.com is assisting independent restaurants find success in the highly competitive restaurant industry. Download a free 
report to discover the number-one secret to lowering food and labor costs, and learn more about how Peters can help you at www.TheRestaurantExpert.com.

How joining forces with a fellow Maui Wowi franchisee, networking and careful planning helped my mobile cart business grow and thrive

Like millions of people caught in the doldrums of corporate America, I needed a break from my day job. I was a paralegal, and felt as if I were chained to my desk and longed for a beach vacation. For similar reasons, my current business partner, Chad Debolt, was also searching for his next adventure. Chad worked as a medical equipment salesman, feeling like a prisoner to the insurance companies and ever-changing retail industry. After 20 years in our respective corporate careers, we each were separately looking for a fresh, new start—one that was flexible and where we could be in charge.

The “aloha spirit” was calling our names, and, independently from each other, Chad and I discovered Maui Wowi Hawaiian Coffees & Smoothies. I became a franchisee in Louisiana in 2015, and Chad joined the franchise system in Michigan in 2010. The Maui Wowi franchise concept allowed us to serve premium fruit smoothies and gourmet Hawaiian coffee beverages while also giving us the freedom to be our own bosses and choose from several flexible business models—mobile event carts, mall kiosks or brick-and-mortar shops. I chose the mobile event cart, and Chad opened a mall kiosk. We both embraced our futures in paradise.

Everyone Is Your Friend

In 2012 our worlds collided when I met Chad at a Maui Wowi franchisee conference. Over the course of the conference, Chad had learned of my success and was intrigued by how I managed multiple carts at high-traffic events like concerts and festivals. At this point, Chad had worked a few festival events, but still had his fixed-location mall kiosk, which was negatively affected by the decrease in mall traffic. Eager to learn new business strategies with the mobile carts, Chad asked me for advice.

I invited Chad to Baton Rouge to shadow me and learn how to execute large-scale events. After he visited a third time, we realized we should become business partners, and Chad moved from Michigan to Louisiana. Rather than seeing each other as competitors, we saw friendship and the earning potential of becoming partners. We knew it would be a missed opportunity to not “join carts” and operate at our highest potential. Our mindset was, “Why only bring two carts to a venue that has a 10,000 person-capacity when we can join forces and bring eight?” Chad and I quickly doubled our revenue after enforcing this team strategy.

We became a dominant force in Louisiana’s vendor industry, establishing residencies in large venues such as the Cajundome Convention Center in Lafayette, the Raising Cane’s River Center Arena in Baton Rouge and the University of New Orleans Lakefront Arena in New Orleans. Using our “everyone is your friend” philosophy, we were able to build strong relationships with the venue managers. Establishing this trust created a solid foundation in the arenas, and management would often grant us special privileges such as early entry and extra storage space.

Even though Chad and I have planted our roots for success in these large venues, we continue to understand the value of friendship with all community members, including venue employees, our “competitor” vendors and customers. More often than not, venue employees will help us with set-up, allowing us to save on labor expenses; other vendors will reciprocate the support, becoming a source for advice; and customers will ask us to cater their events, leading to additional revenue streams.

Simultaneous Success

Chad and I take every opportunity to cater customer-requested events, whether it’s a small wedding or a high school wrestling match. Networking from these smaller events has led to our success for our Maui Wowi business, so we never take such events for granted. We understood that in order to grow, we needed to start small but plan big, and learn from our growth along the way.

Taking what we learned from Maui Wowi, Chad and I opened a second business—a bakery called Big Easy Cookie Company. Together, we have been achieving success with both businesses simultaneously, and we are currently planning an expansion for the bakery. We learned that planning is a key element to success. Whether it’s for a business expansion or operating at an Elton John concert, planning is what takes our success to the next level.

In addition to owning and operating two businesses, Chad and I are both parents. Our children are a top priority, and we try to make the best of the precious time we spend together. We know that working and parenting simultaneously is stressful, which pushes us to be proactive. If we have a busy season ahead of us, we proactively map out the calendars and logistics as much in advance as possible. This strategy has helped us reduce wasted energy and maximize opportunities.

Our success did not come without its ups and downs. We learned as we grew, and our experiences helped shape who we are and what our businesses are today. We would not be where we are without a positive attitude to recognize everybody as a friend, our determination to plan ahead, and, most importantly, our desire to be successful.

ABOUT THE AUTHOR

Originally from California, Michelle Barton moved to Louisiana in 2014. Now based in Baton Rouge, she owns Maui Wowi Hawaiian Coffees & Smoothies and Big East Cookie Company with her business partner, Chad Debolt (both are pictured above). She is also a proud parent of a Louisiana State University graduate and a son who is currently transferring there to complete his education. In addition, Michelle actively volunteers in the community with such organizations as Relay for Life and the women’s resource center for the Redwood Empire Paralegal Association.

Sterno’s Craig Carnes explains why the company’s newest flameless heating product is ideal for drop-off catering

In 1914, Sterno Canned Heat was launched. The chafing fuel was such a success, it’s become one of those brand names used interchangeably with the product itself.

“For more than 100 years, the name ‘Sterno’ has been synonymous with keeping food at an ideal and safe serving temperature,” says Craig Carnes, president of Sterno Products. “As one of the most recognized brands in the foodservice industry, we are committed to offering products that demonstrate superior quality, unwavering reliability and failure-proof confidence.”

To best meet the needs of the current catering landscape, Sterno debuted a product at the National Restaurant Association Show in May, available to the foodservice industry as of July—Sterno SpeedHeat. It’s a flameless, water-activated system that produces high-heat steam, with zero ramp-up time.

“We believe this is the most innovative portable heat system since the introduction of Sterno chafing fuel,” says Carnes, adding that interest from caterers has been “off the charts.”

“SpeedHeat is ideal for any quick-serve drop-off catering event,” he says. “It provides a safe, low-cost, flameless application that is quick and easy to set up. Quality food, delivered hot, can now be served at the ideal temperature without any waiting, and the entire system is easily disposable following the event.”

Catering Magazine recently spoke with Carnes in an exclusive first interview about this groundbreaking product.

CM: What need were you seeing in the marketplace that prompted the development of SpeedHeat?

CARNES: Drop-off catering is one of the largest areas of growth for us and is also one of the most diverse, ranging from business lunches and conference meetings, to home entertainment events for family and friends. These are often “quick-serve” events that in most cases last less than an hour. We found that traditional wire-rack chafing dish units requiring proper set-up, open flame and lengthy ramp-up times was not working well for these quick-serve events, often leading to a less-than-satisfying customer experience. The Sterno SpeedHeat System provides a safe, simple and fast solution to serving up a deliciously hot experience for the consumer.

CM:  How does the product work?

CARNES: SpeedHeat is a water-activated packet that rapidly produces high-heat steam with just 20 ounces of water. It comes with a special tray that holds the packets and can keep two half-size food pans hot for the duration of most drop-off catering events. No need for a water pan or wire rack, and no open flame at all. It can be set up anywhere since it doesn’t require any kitchen equipment or an electrical outlet.

CM: How long was SpeedHeat under development?

CARNES: We never stop thinking about ways to expand our product portfolio and to improve the performance and safety of our existing product line. A flameless portable warming system is something we’ve had in varying stages of consideration and development for at least as long as I’ve been with Sterno, which has been nearly a decade. Now with the growth of drop-off catering, the timing of our SpeedHeat product solution is perfect.

CM: What are the top-selling Sterno products to the catering industry?

CARNES: Our chafing fuel continues to be the top choice among caterers for traditional catered events. Besides chafing fuels, we offer a full line of portable catering equipment that includes our WindGuard foldable chafer series. These units are designed to let our customers set up and serve outdoors, even in the breeziest conditions. We are also the industry’s leading supplier of butane fuel. Sterno Butane features an exclusive Temperature Safety Valve that, when used in conjunction with our butane stoves, makes it the safest on the market. Given the popularity of butane action stations, these industry-first safety features really make a difference to our customers.

CM: Could you describe Sterno’s partnership with Mercy Chefs?

CARNES: In 2017, Sterno Products joined forces with Mercy Chefs as an official philanthropic partner to help communities across the country respond to and recover from natural disasters and national emergencies. Founded in 2006, Mercy Chefs provides professionally prepared, restaurant-quality meals for victims, volunteers and first responders in the aftermath of hurricanes, flooding, tornadoes, earthquakes, wildfires and non-nature related emergencies. Sterno provides financial support, as well as equipment and culinary production assistance.

CM: What other types of products does Sterno have under development, or is there any additional news you’d like to share with the catering industry?

CARNES: We continue to work closely with the catering community to develop products that enhance their brand and provide cost-saving solutions to serve food hot for all occasions. We recently introduced a new line of Sterno Delivery Products offering high-quality, antimicrobial lined insulated food carriers. Food can now be delivered hot and safe for all events and kept hot for just the right amount of time with either our new SpeedHeat System or with traditional Sterno Chafing Fuels.