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How Can You Lower Your Restaurant's Food Cost?

How Can You Lower Your Restaurant's Food Cost?

Food waste is a major issue that has a negative impact on both your bottom line and the environment. This guide provides a comprehensive overview of food waste in the Australian food sector, as well as recommendations for food waste reduction techniques.

Going green should be high on your priority list if you manage a food service business in Australia. There's the broader picture of not harming the environment, as well as the potential to boost profit margins and efficiency.

How to Keep Food Costs Low

Tracking and monitoring the food that comes into your restaurant is the first step in lowering food prices and waste. Many businesses order food in bulk quantities, but using all of that food before it spoils can be difficult. Here are some suggestions for reducing spoilage:

  1. Calculate the Costs of Your Food

In a restaurant, calculating meal expenses can take a long time, but remaining on budget and keeping track of your expenses can help you save time, money, and food in the long run. Inventory, cost of goods sold (COGS), and food cost % are all factors to consider when computing a food cost %. These elements can assist you in sticking to your budget and keeping track of your profit and loss statement.

What is the formula for calculating my food cost percentage?

The best way to figure out what your actual food costs are is to split your COGS by your food sales and multiply by 100. This will provide you with a % result.

  • Food Cost Formula: (Cost of Goods Sold / Food Sales) x 100

Between 25 and 35 per cent of the cost of healthy food is spent on it. However, if your percentage is higher than this, don't be concerned. If you spend more on food, you may not spend as much on labour or rent, which eventually balances out.

  1. When calculating inventory, be consistent.

When estimating your inventory, you should do so at a regular interval throughout the day. It's ideal to calculate your inventory at the start or finish of each day, for example. When calculating inventory and your food cost percentage, this will assist you to keep your numbers consistent.

Regularly checking your inventory can provide you with an insight into how and at what rate your food is being consumed or discarded. To reduce food waste, for example, if you discover that you have salami that is going unused and rotting, reduce your food order to a smaller amount.

  1. Work with Your Food Suppliers

You may work with your suppliers to reduce your food prices once you know how much food your restaurant utilizes at any one time. If at all possible, look around to discover what other vendors have to offer. If you have an excellent relationship with your existing supplier, you might ask for a discount or for them to match their competitors' prices.

Another alternative is to devise a strategy in which you buy in bulk but have the order delivered in multiple shipments rather than all at once. Ordering food in bulk can save money, but it can also lead to food spoilage, negating any savings you would have made by buying in bulk. Having your shipments delivered in multiple instalments ensures that you constantly serve fresh food, avoids food waste, and saves you money.

  1. Join a Group Purchasing Organization

Consider joining a group purchasing organization if you can't work out a deal with your supplier to buy in bulk. Group purchasing organizations unite the resources of several small restaurants to obtain the highest quality commodities at the lowest possible cost. The total capital of numerous independent restaurants is substantial, giving the corporation enormous negotiating power with suppliers and guaranteeing that you get a decent deal.

When buying food, you have the option of bypassing the intermediary and buying directly from the source: local farms and farmers markets. Food is frequently selected before it is fully ripe and flash-frozen before being delivered across the country, which might affect the taste. Buying locally assures you get the freshest products while also supporting your community's economy.

  1. Manage Your Food Orders

When it comes to meal orders, the more effort you put in, the more money you save. Here are some suggestions for how to conserve money while still producing high-quality cuisine.

  • Provide a small menu. You may reduce the number of ingredients you need in your kitchen by limiting your menu. Not only will this help you save money on food by reducing waste, but it will also help you adapt your menu for takeout.
  • Spend some extra time on your prep work. Purchasing a deboned, skinned, and portioned chicken, for example, will be more expensive than purchasing entire chickens.
  • Keep an eye on food prices to see how they can affect your shopping list.
  • To save money on vegetables, select seasonal foods. Seasonal cuisine varies depending on where you live, so go to your local farmers market to see what's new and get ideas for new recipes.
  • When it comes to produce, be careful of food standards. Food is graded and examined according to its quality, freshness, and presentation. The variations between top grades are frequently just aesthetic. For example, the difference between No. 1 and No. 2 avocados is negligible, so choosing the No. 2 choice will save you money without compromising taste.
  1. Implement Portion Control in Restaurants

Controlling your meal amounts is a great strategy to cut down on wastage. Keep track of how much food is thrown away. If your consumers are consistently unable to finish a meal, the serving is too large. To provide the right amount of food to your guests, use restaurant portion control instruments like portion scales and portion spoons.

  1. Use the FIFO (First In, First Out) method.

The first in, first out strategy is simple: use the first ingredients you put into your cabinets and refrigerators. This compels you to use the oldest food first, ensuring that you always have fresh ingredients on hand and preventing food from going bad.

  1. Make the Most of Your Daily Specials

Daily specials might be a good way to cut down on waste in the kitchen. When you find stuff in your cupboard that hasn't been used in a while, come up with a dish that includes or employs that ingredient, and add it to the list of your daily specials. You may also work with your front-of-house personnel to urge clients to try the daily special, which will help you to clear out your inventory while also making a profit.

  1. Educate your employees

It's critical that your employees understand the cost of your food and how their actions can impact your bottom line. There might be a lot of waste during the meal preparation process. While the expense of that waste may seem modest at the moment, it can quickly add up to become a big loss. As a result, if your team understands how much food costs and how to correctly use it, they will be more careful while making food and portioning dishes.

Tips on How to Reduce Food Waste

Some by-products and food waste are unavoidable during the cooking process, but some chefs are discovering imaginative and unique methods to incorporate them into their dishes. Here are some suggestions for repurposing leftovers and decreasing food waste.

  • To make homemade vegetable stock, save vegetable scraps such as onion skins, carrot peels, and mushroom stalks.
  • Don't toss that stale bread away. It can be used to produce croutons, breadcrumbs, and bread pudding, among other things.
  • Shred up roasted chicken and turkey the following day and use the meat in a soup or stew.
  • Craft breweries and brewpubs can make homemade granola from leftover grain from making beer. You can also give it to local farmers as cattle feed.
  • Make meals for your team using leftovers and older ingredients. The food is still safe to consume, but it may have gone above and beyond what you would give to customers. You may treat your employees well while saving money this way.
  • Take your leftovers to a local shelter or food bank if you can't find another use for them. Food donations to charities are tax-deductible, so you can get rid of excess inventory, save money on taxes, and benefit your community all at the same time.

Food waste can have a significant influence on your restaurant's bottom line. However, you may save food expenses in your restaurant by haggling with suppliers, buying locally, offering sensible portion sizes with restaurant portion control tools, and using your ingredients creatively.


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