By David Lund With Guest Author Patrick McClary
When people hear the term food cost, they generally think of the simple calculation of cost / selling price = food cost %. This calculation does little more than give you a percentage. Understanding and controlling food cost is much more complex.
In operations that have proper controls and processes in place a spike in food cost can be traced back to one event. Operations that do not have a strong foundation of food cost usually react with bizarre behavior such as stepping up their garbage cans thinking that the costs increases are because of people throwing out food. That may be the case, but looking through garbage cans will not create long-term success when it comes to food cost.
There are many steps to creating food cost success; one interesting factor that is often overlooked is yield and net weight. What is net weight? It is the weight of the usable product that you can sell. Fresh fish is a good example; it is generally packed on ice which can add a lot of weight. Vendors will put the net weight on the box which deducts the weight of the ice and container. Sometimes net weight is not so obvious and can have a significant impact on your food cost.
I always knew about net weight but didn’t think much of it because it was written on the box. That is the case in the first example but there is still a lesson to be learned. A number of years ago, frozen vegetables were used in a buffet restaurant and a supplier offered a product with significant cost savings. The product was tested and we determined that the quality and yield were comparable to our current product so we made the switch. In our testing process results were always tracked which included taking a picture of the box. A few months went by and the buffet chef was complaining about the vegetables and how much more they needed to use to fill a pan. After a quick discussion, I asked him to check the net weight. He looked at me like I was crazy and then proceeded to check the box. When the current box was compared to the one that was tested there was a 10% change in the net weight. How could that be? The box and contents were the same size. Many frozen products are glazed with water to help preserve them and prevent them from drying out. In this case the water glazing was also used to bulk up the weight of the case. Classic bait and switch.
Net weight can be less visible (especially with proteins) with the practice of adding protein, salt and water. The protein levels need to be listed on the box as well as any other ingredient. What people don’t realize is the water can leech out when thawed. That was the concern we had when reviewing the actual to potential food cost of one of our outlets. We found that based on the sales we were using a great deal more chicken than we should have. The first step was not to look through garbage cans, it was to ask questions. How is the chicken coming in? Frozen! Is it IQF or a block? A 25 lb. block. I had two concerns:
- How much liquid is leeching out due to the addition of the salt?
- I thought what would prevent someone from adding water to the bag of chicken before it was frozen.
The team was asked to thaw out a case and weigh the liquid. To everyone’s shock the liquid was 30% of the total weight. In this case the random value chicken was actually costing more than fresh chicken breasts.
The moral of the story is know the net weight and the cost based on this. When we review products we go all out. From counting the number of pickles in a pail, produce box weights and how much one vendor’s cauliflower weighs compared to another. No item is too big or too small because the small forgotten items add up.
