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Wastage proves to be a significant cost to food businesses every year, eating away at your profit margins. An average restaurant loses about €24,000 per year from food waste alone.

When was the last time you revalued your menu design, kitchen costs and percentage profit per dish? Typically businesses in the food and beverage sector will aim to achieve a margin of +70%. Are you reaching this? It is important for you to know the exact costings of each item produced in your business offering in order to achieve this. Take some time to go back to basics calculating your contribution margins and your necessary labour costs without sacrificing your service or value for money. Implement some changes such as a waste book to record all losses, weighing scale on receiving deliveries and credit control audits.

We recently held a course on ‘Profitability and Waste Management’ at our Kepak Centre of Excellence, take a read of our simple tips to help save your business money and watch those profit margins increase.

1. Correct pricing is fundamental to profitability. Ask questions such as: what is the cost of producing my product? How much are my competitors charging? How much are my customers willing to pay?

2. Cost each dish to enable you to operate to achieve your gross profit % while offering customers value for money.

3. You can determine what sells from your outlet! After a period of sales, history review each dish and determine their position on the menu based on popularity and contribution margin. Signature bestsellers prioritised and take non popular dishes off the menu.

4. Review and adapt your menu as supplier costs increase. Suppliers provide 10 days’ notice for price increases, so shop around!

5. Maintain effective purchasing and stock policies. Check invoice prices regularly, audit invoices for price accuracy and monitor what you have signed for vs the delivery.

6. Keep labour costs to a minimum without compromising service.

7. Encourage your staff to minimise waste. Product loss happens in many ways such as: poor storage, over production, poor portion control and carelessness in product handling.

8. Replace inefficient technology/electricity with cleaner, smarter solutions.

9. Record all waste with a waste book as a reference, to sum up costings.

10. Reduce, Reuse, Recycle!

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