Today, we are going to discuss reducing your menu size and limiting items to reduce waste. In our last article we talked about waste. Spoilage can be a huge money suck that destroys profitability. One way to reduce spoilage is to reduce the number of products you carry. If you do not have as many products, you will have to use the ones you have more frequently, which leads to greater rotation and less spoilage. So today, let’s eliminate some products.
Every Product Needs Multiple Uses
First and foremost, every product should have multiple uses. As we mentioned in the last article on food waste, if you have an ingredient that only exists in one menu item, chances are you are going to consistently carry too much or too little of it. Every ingredient you stock should appear in several menu items, especially if the ingredient is one with a short shelf life. We will talk more in our next article about creating new menu items to rework ingredients, but first we’ll look if we can’t just eliminate those one use ingredients today.
The Boston Matrix
The Boston Matrix is typically used when determining the strength of an investment portfolio, but can be used to determine the success or failure of menu items. The concept is fairly simple but will take some time to calculate out.
You will start with an X-Y axis, don’t worry it won’t get too technical. One axis determines the popularity of a menu item. The more popular it is, the higher on the axis you place it. The other axis is used for profitability. The more profit you make off of selling a menu item the higher it is on the axis.
Notice for this axis, it’s profit, not menu price. Just because you sell a steak for $21, doesn’t mean you necessarily make the most profit off of it. Be sure to factor in proper food cost.
The matrix creates four possibilities, one in each quadrant: Stars, Cash Cows, Problem Children, and Dogs. We’ll explore each of those next.
High popularity, high profitability menu items. These are your key entrees and appetizers. They are very popular and make a great margin. You want to continue to promote these items and develop more items like them. These items continue to make you profitable and should be in the most prominent places on your menu.
High popularity, low profitability menu items. These entrees and appetizers make you some money but not as much as the stars. They require little promotion while still selling in volume. These are your cash cows. Continue to milk them while you can. These menu items pay your bills. While not providing great profitability they provide stable cash flow so that you can cover expenses. Additionally, they don’t require much, if any marketing. The bring in cash with little effort. You can enjoy the cash flow or tweak ingredients to make them more profitable and turn them into stars.
Once again, continue milking these items until they lose popularity and become dogs (more below) or rework them to create a new star.
Low popularity, high profitability menu items. These are your problem children. They are items that make you a lot of money, but aren’t as popular as you’d like. You need to work with these children to either promote them better or make them more desirable. Try to place these items more prominently on the menu or tweak them to include more popular ingredients while still maintaining a good margin. You can turn problem children into Cash Cows or Stars with some work. However don’t get trapped spending all of your time and effort investing in problem children menu items. Sometimes it is best to let a poorly selling item go because it’s not worth the effort to make it popular. You’ll end spending so much time and money that the profitability that made it great will disappear.
Low popularity, low profitability menu items. These entrees and appetizers are not popular and don’t make you a lot of money. These items are easy removals from the menu. There is no sense in trying to push these items to hopefully become a problem child, just eliminate the headache and spend your time on your other menu items.
Create New Items If Needed
When classifying each of your menu items into the four parts of the matrix, you may have too many cows or too many problem children. You know you need to eliminate some but aren’t fully sure on which ones. You may be able to take one or two lesser items and combine them into a new hybrid item that will appeal to more people. Or, you could eliminate both items and create a new item that fits the same type of flavor profiles as the originals while including more popular ingredients.
We’ll talk more about building new menu items in our article later this week. As always though, we can help if you are having trouble.
Eliminating Menu Glut
It may be tempting to keep a lot of menu items on the menu because you want to make everyone happy, however only by nicheing will you be able to develop a true brand identity.
By cutting back on your total menu items, you can focus on only the items that you are really good at and eliminate those that don’t make you money or aren’t popular. By slimming down your menu you can order less product, improve rotations which lowers spoilage and waste, and you’ll make a more happy and satisfied customer because you more appropriately met their needs. All these factors combine to make your restaurant run smoother and more profitably.