Professional Documents
Culture Documents
Management
Best Practice
Manual
‘A recipe for success’
Index
Section 1 – Management Overview
! Objectives and Outcome
! Questions
Section 2 – Planning
! Menu Costing
! Shopping Basket
! Profit Maximisation
! Budgeting
2
Section 3 – Ordering, Receiving, Storage, Control and Wastage
! Par Stocks
! Must Stocks
! Storage
Section 4 – People
! People
! Colleague Feeding
! Revenue Control
! Reports
! Covers Definition
! Food Tracker
! Stock Taking
! Sharing Information
Section 6 – Appendices
3
Management Overview
! Questions
4
Objective
Outcome
• Improved Efficiency.
5
Key Performance Indicators for
Best Practice Food Cost Management.
(KPI’s)
6
Why Has It Been Created?
• Hilton Hotels have a varying level of efficiency in food cost management.
• To separate the food operations process into component parts and give
clear operational procedures for each part.
• A lot of our Chefs are recruited from smaller hotels or restaurants where
formal food costing is not important to the business.
• Chefs control the biggest cost budget after payroll but are given little or
no training and assistance in how to do it.
7
Food Cost Management
“The Facts”
Hilton, as a group has generated and forecasts to generate the following sales,
purchases and cost percentages in the 3 year period ending 2002.
After payroll, food purchase is our biggest operating cost of sales. Therefore it is
important that tight controls and tested methods exist in order that the company
maximizes profitability.
Frightening Scenario
It is human nature that processes can lapse for various reasons such as
sickness, holidays and new staff appointments etc. It is also realistic to
assume that we do not do things right all of the time so imagine if the
following revenue was not raised at each HUKI hotel every day of the year.
1 x Exclusive breakfast due to Fidelio meal plan report or guest key card not
being checked.
1 x TDH dinner due to Fidelio meal plan report or guest key card not being
checked.
If we use an average selling price of £10.50 for breakfast, £21.95 for dinner
and a banqueting menu of £29.00 across the 77 hotels in the Hilton portfolio,
we would be losing net sales of: -
£ 1.725m
For your hotel this could mean a minimum of £22.500 p.a. lost sales
and £6.750 unattributed costs.
8
Who Needs To Be Involved And Understand The
Process
General Manager,
Financial Controller,
All team members who impact on food buying, production and service.
Each department head plays a key part in the process and it should be noted that
their contribution is important. In order to achieve a balanced approach,
everyone must contribute and be looked upon as an important contributor.
Key Responsibilities
9
Management Responsibilities Table
Financial Controller
General Manager
F&B/FS Manager
HR Manager
Stores
Head Chef
Management Overview X x x x x X x
Menu Costing x x
Gross and Net Weights x x
Achievable Food Cost Exercises x x x
Setting Menu Selling Prices x x x
Forecasting and Food Cost Planning x x x x x
Banqueting Costing and Purchase Planning x x
Peaks and Troughs Planning x x
Shopping Basket x
Profit Maximisation x x x x
Budgeting x x x
Ordering x x x
Receiving and Goods In x x x
Storage x x
Security and Key Control x x x x
Out of Hours Policy x x x x
Wastage and Out of Date Stock x x x
People x x
Staff Feeding x x
Revenue Control x
Reports x x x
Covers Definition x x
Nominal Code Definitions x
EPOS Management x x
Food Tracker x x
Par Stocks x x x
Must Stocks x x
Stocktaking x x x x
Table Management and Food Production x x
Optimum Food Costing x x x x x x x
10
HUKI Food Cost Management
Best Practice
• It is Best Practice that Banqueting menus should not be sold under their
costed price. Therefore if a customer wishes to purchase at a given selling
price the Chef should be consulted to devise and cost a separate menu.
• Best Practice is for the staff food to come from the public menus.
• It is Best Practice that the hotel works with a recorded Par Food Stock. If
relevant this should be per outlet. Par Stocks should be based upon a
maximum of 7-9 days trading per average.
11
• It is Best Practice that as a minimum all Meat, Fish and Vegetables are
weighed on delivery.
• It is Best Practice that the Head Chef has overall control and is fully
responsible for purchasing and stores.
• It is Best Practice that invoices are not paid until Credit Notes are
received.
• It is Best Practice that all kitchen personnel are trained on this manual.
• It is Best Practice that contracts are signed for minimum numbers, and
that minimum numbers are charged without fail.
• It is Best Practice that as a minimum all red sections of the Food Cost
Management Action Checklist.
12
How To Use The Manual
1) Before use it is assumed that all users have a degree of knowledge. Not all
sections will be relevant to you or your hotel.
2) The manual acts as a training tool and aide memoir to ensure that you
have a consistent and structured approach to food cost management.
6) Each section has been given a degree of importance of effective food cost
management.
7) Work through each section of the manual. Start with the management
responsibilities and action checklist found in the next section. Do a health
check of where you currently stand.
13
Food Cost Management Action Checklist
14
Before You Go Any Further Ask Yourself These Few
Simple Questions
• Is food cost profit important to me?
• Have I been able to solve all of my problems in the past without them
reoccurring?
• Do all of my team understand how to manage food cost? Can I teach them
to manage it better?
• Are enough team members involved in managing the food cost? Did I
know that so many people play a part?
• Do I know the cost of each dish sold and are my menus costed?
The list could be endless but if you answered NO to any of these questions
then this manual could benefit you.
15
Planning
! Menu Costing
! Shopping Basket
! Profit Maximization
! Budgeting
16
Menu Costing
Menu or recipe costing is the key component of effective food cost management.
This applies to all food that is served whether it is a single item such as a
sandwich, single main course, restaurant buffet or indeed a breakfast buffet. You
need to know how much an item costs before you can effectively set a selling
price. Or indeed if you have a selling price, how much a dish needs to cost in
order to make a set profit margin.
Menus need to be costed to ensure that both profit is made and that customer
expectation of quality and standard is reached or exceeded. Therefore a balance
needs to be made between what is practical to put on the menu to achieve cost
and what is luxury (You can up sell to luxury?).
With differing sales mixes within all hotels due to the type of food offerings, it is
not the case where all food products sold will automatically achieve a planned
food cost. For example the costs in a fine dining restaurant will or might be
considerably higher than at banquets or breakfast.
Due to seasonal variations some products are not available all year round or
their price might be artificially inflated due to the fact that the product is
sourced from overseas. Menu costing needs to make allowance for this.
1) Recipe costing must be completed for all dishes on the menu, including
banqueting and table main courses.
3) Costings should be made on a ‘gross weight’ basis. (See gross and net
weights).
4) Best Practice is for all costings to be reviewed every 3 months to take into
account market price fluctuations and seasonal changes. (See also
stocktaking).
N.B. all menus should carry the proviso that prices are subject to
change etc. it is up to the hotel to enforce this as with all contracts and
agreements.
6) Update your EPOS system and the recipe card along with date of
alteration.
17
7) Ensure that all staff are trained to prepare dishes to the recipes of each
dish, and that the method is followed.
10) Common mistakes are over garnishing. This wastes food and will often
detract from the main part of the dish, as well as impacting on food cost.
Cost garnishes per 25/50 portions and divide down cost to single portions.
Nobody knows the cost of a single sprig of Rosemary or 2 slices of
cucumber!
11) Include in your costings an amount for wastage, (not to exceed 2%).
12) Include in your costings an amount for staff feeding, (not to exceed 3%).
13) Include in the cost of a STARTER and MAIN COURSE the cost of a
bread roll and butter.
14) Include with the cost of coffee and tea the cost of milk, sugar, mint, petit
four, biscuit or pastry (cost in multiples of 10).
15) Insist on minimum sales numbers for certain items. i.e. if you make a
terrine that contains 25 portions, 13 portions could be wasted (if not
resold) if you serve it to a dinner for 12.
Method
3) Give a weight or size to each item (kg, gram, bag, box etc). Be consistent
in your approach.
4) Cost each item on the basis of net raw weight. (See gross and net weights).
18
5) Add roll and butter (for starters and main course).
6) Add wastage.
8) Calculate your selling price based on your desired food cost percentage.
(See formulas).
Menu
19
To calculate the selling price of the dish assuming a food cost percentage (%) of
30 % the selling price would be:
You now have a net price. Before serving to the customer you must add VAT at
the current rate.
Therefore in order to achieve a food cost of 30%, this example must be sold to
the customer for £14.28.
After dish costing and dish preparation a photograph of the completed dish
should be taken and placed with the cost sheet.
20
Sales Mix Analysis
As you will see from the table below, each food outlet within the hotel probably
has a differing food cost. This is especially true in the larger hotels. Therefore in
order to achieve the overall desired food cost, a balance needs to be achieved.
Example:- Hotel A has food sales of £50.000 per month, its food sales and
department costs are broken down as follows to achieve a food cost percentage of
26%.
The total food cost percentage is reached by dividing food cost £ by total sales £
and multiplying by 100. (See formulas).
Example: - If hotel A’s sales mix was to change as outlined below. Note what that
change in sales mix does to the change in food cost percentage based on the same
£50.000 sales.
It can be seen that because of the drop in banqueting revenue and the increase in
revenues from restaurant 2, that the food cost has risen for hotel A by 1.5% to
27.5%.
These are two basic examples that are related to constant revenues. Also to be
taken into consideration is the rise or fall in covers within a sales outlet. The
continuing variance of covers will also affect the cost of food sold.
21
For example 100 covers for breakfast at full spend of £14.50, generates net
revenue of £1234.00.
If the breakfast spend was £6.00 per cover, 100 covers would generate £510.63
net revenue.
If hotel B’s covers were to increase by 10% but the average spend was to
decrease by 10% the following effect would be seen if we took the same food cost
per cover per outlet. (It is true that a menu sold at whatever price, still costs the
same to produce).
The food cost for hotel B has now risen to 29.66%, because of the movement in
business. (£21945 / £73975) x 100.
Because of this, in order to achieve the same 26.78% food cost as in example 3
the Chef must try to save or adjust his overall cost by £2135.
In summary, you need to understand the rise and fall of sales mix in costs,
revenues and covers in order to explain fluctuations in food cost.
22
Gross and Net Weights.
After preparation and cooking most food products experience shrinkage.
Therefore, there is less product available to serve to the customer. To take
account of this net raw weight must be used in menu costing calculations. The
example below will highlight the difference that the gross / net variance could
show to a food cost.
Example.
Based upon a 10kg Rib of Beef costing £4.00 / kg. Total Value = £40.00
After cooking the same 10 kg Rib could weigh 9 kg, (10% shrinkage). Therefore,
If this 0.11p difference in cost was multiplied at 10 covers per service (lunch and
dinner) over a whole year then undercosting would amount to £803.00 just on
this one menu item.
A whole fresh salmon, with head, tail and bones weighs 10 kg and costs £2.50 per
kilo. Total Cost £25.00.
If after gutting and trimming we have only 7 kg left (30% wastage) the cost per
kilo would now be £3.57. The £3.57 cost should be used in your menu cost price
calculations.
23
Achievable Food Cost Exercises
A different approach needs to be applied to the costing of restaurant buffets
(breakfast, lunch and dinner), as the food served is not of a fixed portion and
customers have the choice of eating as much or as little as they wish. Although
portion control is practiced to an extent with the Chef carving joints or serving
individual portions of chicken or salmon etc, again the customer decides more or
less how much they wish to eat.
The AVERAGE calculation is used, as over a period you will find that the same
amount of food is being consumed per head. The only variables to the calculation
are the net cost of food and the net selling price.
Method
1) The complete exercise will consist of quiet, moderate and busy service
periods. The hotel needs to work out what is an average amount of covers,
for a quiet, moderate and busy service. Once you have established these
averages, choose service periods where you will serve approximately this
number of covers.
4) All food items need to be counted to create an opening stock within the
department. Start with the simple things like sugar, butter, milk and
coffee. Moving on to cold buffet displays and finally hot dishes as they
leave the kitchen. Count in the same manner as you would when
stocktaking. Have previously prepared spreadsheets ready for counting.
5) As the buffet is replenished or extra items issued from stores, these items
need to be added to the stock sheets.
24
6) At the end of service count back in all food items that are left un-
consumed by the customer. Give these items a value. This will be your
closing stock.
7) Calculate your opening stock, plus additions and your closing stock
figures to find your consumption. N.B. All food that is returned to the
kitchen to be used again is part of your closing stock. All wastage is part
of your consumption.
8) Establish your net food revenue for the service period. (Treat discounts
and complimentary as full price).
9) Now that you are in possession of your consumption and revenue you can
work out your food cost percentage.
Example.
11) Having completed the exercises add all your costs and revenues together
to find out your average cost.
Example.
Service Covers Served Food Cost (£) Net Revenue Food Cost %
(£)
1
50 133 350 38
2
125 303.75 843.75 36
3
250 459 1530 30
25
You can see that the average cost of the lunch buffet for this restaurant is
32.88%, based on 3 exercises.
12) Costs will vary between services; therefore the more exercises undertaken
the more accurate your AVERAGE results will be. Agree the accuracy of
the results with the Financial Controller.
13) These exercises should be used as a guide to costing, so that the Chef is
aware of how much the buffet is costing to produce per service period. If
it is too high he needs to trim it back. However do not compromise on
standards.
26
Setting Menu Selling Prices
There is no hard and fast rule to set menu selling prices. The most important
thing to do is to consider all factors.
A practical way of seeing if selling prices generate the hotel sufficient profit is to
carry out the following exercise.
Looking at historical data (Micros / EPOS System) and your anticipated menu
sales estimate how many individual menu items you will sell over a period (4
weeks).
Menu Item Estimated Sales Selling Price Total Revenue Sales Mix %
1 600 3.50 2100 11
2 1200 5.50 6600 33
3 1000 6.00 6000 30
4 600 8.75 5250 26
Total 3400 19950 100
Now multiply each menu item sales mix percentage by a pre determined cost
percentage, as identified below to give a weighted cost percentage.
This gives an overall weighted cost of 34.4%. Therefore, if the target is 30% cost
the selling prices will either have to be increased or the cost prices reduced.
Best Practice is for the Financial Controller to undertake this exercise to review
hotel selling prices against cost percentages.
27
Forecasting and Food Cost Planning
This is a tool that is not often used to effectively control the management of food
cost. Its aim is to gear the Chef to the ordering and production of food in a
regulated manner to service customer requirements based on anticipated
business needs.
If the hotel expects to have total food revenues of £100.000 next month and is
looking to achieve a 28% food cost then the Chef has only £28.000 to spend!
How often is the revenue forecast discussed by the General Manager, Financial
Controller, F&B and C&B Managers or Revenue Manager and Chef together?
Prior to the start of each month the Chef, F&B Manager, Storeman, Buyer,
Financial Controller etc. should hold a planning meeting. Remember again that
after payroll, food purchasing is the biggest cost for the hotel.
28
Requirements
4) Current statistics -
a) Sleeper/ Breakfast ratio – weekday and weekend
b) Sleeper / Dinner ratio - weekday and weekend
c) Sleepers that will eat in banqueting
d) Sleepers that won’t eat (aircrew)
e) Sleepers that eat in Executive / Club Lounge
f) Inclusive Sleepers
g) Tours
5) Sales mix pattern – do not just look at today look at the next 10 days and
adjust your plans accordingly.
Example –
If weekly food sales are £25000 and target food cost is 30%. Then the
Chef has £7500 to spend in the week.
Best Practice is for the staff menu to be the same as the restaurant or
banqueting buffets.
8) Plan to make use of cheaper cuts for buffets. Casseroles, pies and stews
are widely accepted by the customer, as it is what they will eat at home.
Remember when people are away from home they want something
familiar. Most customers are not used to gourmet cuisine.
29
9) Use a weekly planner as detailed below to plan menus. It is the same as
planning a staff roster or holiday planner. Be lead by what you have to
produce. i.e banqueting menus
Note that the planner can be broken down into daily service periods and can
accommodate a number of functions. You will see that the staff are being
served the same food as the customers.
30
10) Look at ways that money can be saved by not compromising on quality.
Be imaginative!
Ideally the food and beverage team should be planning 2-3 months in advance.
By doing this, if you know that you will have a change in sales mix, therefore
probably meaning a change in cost mix, you will be able to re-cost or adjust
menu items and re-print outlet menus. This might be a good time to install
incentives or promotions.
Review
One of the most important areas of forecasting is review. At the end of each day
or week write down the actual number of covers served and the revenue taken. If
there is a difference to your forecast find out why?
If you have a variance to your weekly food cost estimates there should be
reasons, therefore you can investigate any overspend etc.
Reviews can help the team learn and develop. Reviews also allow us to use our
experience to plan better in the future.
• Midweek demand for room service is particularly high when there are
major sporting events such as the Champions League on. Obtain a list of
fixtures and plan accordingly.
• Make food cost and particularly wastage part of your daily reviews and
meetings. Put as much emphasis on it as you would payroll!
31
Banqueting Costing And Purchase Planning
The purchase of food for function set menus should be made consulting the
individual recipe / menu costing sheets.
As it is known how much it costs to produce each dish and therefore each
whole meal. The total cost of a menu can be established. The Chef should
regularly consult and adhere to the cosBting plans.
Example.
If 125 covers were to be served at the function the Chef would have £793.75
to spend in buying produce. (125 x £6.35).
If a menu is sold below its published selling price, the food cost margin will
not be achieved, therefore increasing cost and effecting profit. If a customer
wishes to pay a lower price than the stipulated menu price, the Head Chef
must be consulted and separately cost and suggest a menu that fits with his
cost structure.
Example.
! It is Best Practice that banqueting menus should not be sold under their
costed price. Therefore if a customer wishes to purchase at a given selling
price the Chef should be consulted to devise and cost a separate menu.
32
Peaks and Troughs Planning
To totally understand how your business should be managed, and to ensure best
presentation, best use of manpower, equipment and to reduce wastage to a
minimum, you must forecast both covers and at what time peaks and troughs
will occur.
Example.1.
Peak is 7.00 am until 8.30 am. Outside these times are troughs. Presentation
dishes for troughs should be reduced to half the size.
Chart.1.
Do not allow the breakfast Chef to cook everything off prior to service opening.
33
Chart.2.
34
Shopping Basket
In order to track the movement and fluctuation of price over a given period each
Head Chef, Financial Controller or F&B Controller should undertake a
shopping basket exercise.
The exercise will track the rise and fall in commodity prices and can be a tool in
setting menu selling prices, planning menu cost prices and assisting in explaining
food cost fluctuation.
It is Best Practice that the shopping basket exercise is carried out 3 monthly and
then at the input of new menus or new dishes.
Method
2) Give a current market value. (This market value will be identified as the
starting point or 100%. On the second week or month the market values
of the same commodities will be established).
4) On the second week do the same again. You now have 2 shopping basket
values.
A rise in market prices will be expressed as 100%+ and have a negative effect on
cost price and a fall will be expressed as 100%- and have a positive effect on cost
price.
A minimum of 40 items should be used for the exercise and they should be
selected from commodities that have regular cost price movement (perishables).
Dry goods and goods that have a fixed annual price should not be used. Goods
with high volume and high price movement are particularly relevant. Consider
fish and vegetables out of season.
35
Example
We can see from the above example that food prices between week 1 and week 2
have risen by 8.55%. This is expressed as 108.55% to the starting point (week 1).
This means that our selected purchases are 8 ½% more expensive.
In week 3 prices have risen over week 1 by 5.5%. This is expressed as 105.5%.
(Please note that prices may also fall. If they fell by 5.5%, they would be
expressed as 94.5% of week 1).
Menus should be costed on week 1, therefore price rise and fall if significant
should be applied to menu price costing, in order that food cost profit can be
maintained or menu items changed. It is therefore correct to say that if prices
fall we will theoretically make a higher food cost profit. It is also correct to say
that if prices rise you should adjust your menu selling prices to reach the same
desired level of food cost %. On a weekly basis you should not expect significant
price fluctuation, however, over an extended period and due to seasonal
variations prices will go up and down.
36
Profit Maximization
Often popularity and profitability are confused. Menu items can be arranged on
a grid – the so called ‘Boston Matrix’ – representing their performance with
regard to volume (popularity) and cash contribution (profit).
The ‘Cash Cow’: high sales and high profit contribution make this the ideal
product. It can be ‘milked’ for cash, if cared for and fed regularly.
The ‘Plough Horse’: high sales and low profit contribution. It works hard but
the profits are not always immediately apparent; it will take time to reap the full
reward from this crop.
The ‘Cuddly Panda’: low sales but high profit. Lovable but elusive, it will
require careful study and special attention.
The ‘Dodo’: low sales and low profit. Probably extinct. Therefore, get it off your
menu.
High
37
Profit Improvement Strategy
Profit maybe enhanced by manoeuvring ‘cash cow’ menu items towards the top
right of the grid. As shown in the example below. However, when considering
strategies / tactics be aware of the potential effects and possible consequences.
Evaluation
38
Promotions
If you have a food cost management problem do not run a promotion if it means
buying in extra menu items over and above your norm. Promotions should be
staged from within the normal operation of the business.
The only proviso to this is when a new menu or menu items are being introduced
and a sales drive is required to initiate customer awareness.
Specials
Specials are items that the Chef is able to purchase at a more competitive ‘one-
off price’, that will facilitate the ‘cash cow’ syndrome or menu items that need to
be sold before expiry dates which are ‘cuddly pandas’ or ‘dodos’.
Do not put high sales and low profit ‘plough horses’ on promotion.
When writing Table d’Hote or inclusive menus always use ‘Cuddly Pandas’. The
thinking behind this is that the customer must consume the menu items that you
specify at a cost you can control.
39
Budgeting
As an outcome of the use of this Best Practice manual, food cost budgeting
should become easier and more accurate for the hotel. However, unless the
manual is used correctly it will not be an aid to budgeting.
When budgeting it is an unrealistic assumption that the food cost should remain
the same for every accounting period. Therefore, if for example the hotel is
looking to attain an annual food cost of 30% it is unrealistic to have 12
accounting periods saying that they will all be at 30% cost.
Food costs could vary dependant upon the hotel and time of year, from 18 – 35%
per period. Your budgets should reflect the monthly movement in sales mix. If it
does not your year end budgeted food cost will be impossible to achieve.
When budgeting for the next financial year you should use all available data
from the EPOS, sales mix analysis, menu costing and profit maximization
exercises to set a realistically achievable budget that fits with your business
needs.
Take into account possible movements in rooms business mix. Hilton is rapidly
expanding its leisure market. Therefore, more and more sleepers will be on low
priced inclusive breakfast and dinner packages. If you do not react your food
cost will automatically move upwards.
40
Ordering, Receiving, Storage, Control and Wastage
! Par Stocks
! Must Stocks
! Storage
41
Par Stocks
Par Stocks are one of the most effective tools in food cost management. A par
stock is the minimum number of any product that should be kept at any one time
for normal trading patterns.
It is Best Practice that the hotel works with a recorded par food stock. If relevant
this should be per outlet. Par stocks should be based upon a maximum of 4 days
trading per average.
Example 1.
If you use 600 loaves of bread over 30 days you consume an average of 30 per
day. Build in a 10% error factor for unexpected rises in business and you should
hold 33 loaves. If you receive 3 deliveries a week then 231 loaves are required
weekly or 77 per delivery.
Food products requiring a par stock are, but are not limited to
a) Tinned / Dry
b) Frozen
c) Breakfast Goods such as Preserves and Bacon etc
d) Juices
e) Breads
f) Staple menu items such as Sirloin Steaks
Consider when setting par stocks what size or weight of product needs to be
purchased. Can a smaller size be bought or can it be purchased less frequently?
Review par stocks as business demand changes. i.e. Christmas or quieter periods
such as January. The Par Stock must be flexible depending on volumes and
menu sales mix forecast and time of year.
Micros sales information on mix and volume must be used regularly to check
actual consumptions.
Too much stock will lead to wastage. Too little will lead to panic buying or
customers not having the correct product available.
42
Must Stocks
For food the must stocks are items that appear daily on your menus. These
should adhere to specification for quality, consistency and contractual
requirements.
However you should question the amount that you order. If you only average
sales of 5 Fillet Steaks per night, do not order 20 per day.
Do not order separately for banqueting, restaurants and staff. Combine your
orders and try to negotiate a better price with the supplier.
Items that do not appear on your menu should not be purchased. Regularly
review invoices to see what is being bought.
It is Best Practice that if food is specified, ordered, received and stored by the
same person, that invoices and control measures are audited for irregularities at
least by-weekly.
Carefully consider the purchase and use of luxury items such as Caviar, Fois
Gras and Saffron etc. Can an alternative be used without compromising on
standards?
Remember that food cost profit should be the first consideration in menu
planning.
43
Ordering – The Purchase Cycle
Aim
Nominated Suppliers –
Order Sheets –
Supplier Schedule –
Success Criteria
a) All orders will fulfill the business requirements.
44
c) Purchasing specifications are being adhered to.
45
Receiving and Goods In
Aim
Credit Notes –
Delivery notes –
Temperature Checks –
• All deliveries must be checked against delivery notes and order sheets
to ensure that quantities and specification delivered match those that
are charged for. An appropriate set of scales should be available to
ensure all weights match delivery notes. Any deviations from the
delivery note should be recorded on a credit note / goods returned
note.
It is Best Practice that as a minimum all meat, fish and vegetables are
weighed on delivery.
46
Please refer to the food safety hazard analysis manual to ensure that all
health and safety regulations are being adhered to as outlined by Safety Risk
Management at Cadogan Square.
Success Criteria
It is Best Practice that the Head Chef has overall control and is fully responsible
for purchasing and stores.
47
Storage
Aim
To ensure that there is an adequate supply of all food items maintained for
immediate use, with the minimum loss arising from either wastage or
spoilage.
Date Coding –
• All meat, poultry and fish items must be date stamped before storage
to ensure that items do not pass their sell by date. Be aware that it is
an offence under the Food Safety Act 1990 to not date code / stamp.
Date coding guns and labels can be purchased through a nominated
supplier recommended by Safety Risk Management at Cadogan
Square
Temperature Checks –
Stock Rotation –
Storage –
Please refer to Food Safety Hazard Analysis Manual to ensure that all health
and safety regulations are being adhered to as outlined by Safety Risk
Management dept.
48
Success Criteria
49
Security and Key Control
As we have already said, Hilton Food Cost is an expensive commodity. As a
reminder Hilton UK & Ireland spend £50m per annum buying food. It therefore
needs to be looked after and be secure.
Each hotel needs to put in place security and control measures that best fit its
own operational needs. The following is a guideline to best practise;
1) Once goods have been received ensure that they are put away in suitable
storage containers.
2) All stores, fridges and freezers are locked when not in use.
3) Keys to stores and cold rooms must be kept in the kitchen during shifts
and locked away on kitchen close down. Keys should have restricted
access. A list of authorised people should be kept with the keys.
6) If locks and/or clasps are ill fitting these should be changed or repaired to
ensure effective operation.
8) The issuing and receiving departments must sign this, and the requisition
kept for stock taking departments.
9) The department and duty managers should make regular checks out of
shift, to ensure that security is maintained to doors, keys and stock.
As well as the above points the following should be agreed within the hotel and
individuals trained on their own responsibilities;
50
Out of Hours Policy
As hotels are a 24-hour operation it is impossible for our kitchens to be always
fully stocked and because of the needs and requests of customers from time to
time we will need to requisition from the stores, outside normal opening hours.
It should be trained into staff that each and everyone within the Food and
Beverage Department should take responsibility for the control of stores.
Head Chef and Deputies, Food and Beverage Manager and Deputies,
Management Trainees, Duty Managers, Heads of Department, Security, Duty
Food and Beverage Manager.
Kitchen Closedown
At the end of each working day a formal kitchen closedown procedure should be
in place to ensure that not only food hygiene regulations are being adhered to but
also that food is correctly stored so it can be used the next day.
• Ensure all food items are cling filmed, date stamped (with 2-day shelf
life) and refrigerated.
• If any food is still left in the restaurant, i.e. soup, salad bar etc, make sure
that they are brought in and samples of appropriate foods have been
taken and recorded in the food sampling folder.
• Record wastage.
51
Wastage and Out of Date Stock
Wastage is the discarded element arising from the inefficient use of resources. It
will never be eliminated but can be reduced.
Keep wastage to a minimum and order effectively. Only authorise stock for
disposal as a last resort.
Check what you and your Sous Chefs do, ask questions
• Are the restaurant trained in the efficient use of the toaster and
coffee machine?
• When you return goods to suppliers, do you always check that you
receive credit notes?
• It is Best Practice that invoices are not paid until Credit Notes are
received.
52
Consider the following table as an aide-memoir to wastage control.
A key task when looking to control wastage is to look at your most wasted or
biggest wasted items.
• How often during a breakfast service do you check how much coffee
and bread is wasted?
• Undertake a waste control exercise. Empty the refuse bins at the end
of service and analyse what has been wasted!
53
People
• Recruitment and Training
• Balanced Scorecard
• Colleague Feeding
54
Recruitment and Training
One of the most important aspects of today’s Chef is his ability to control and
manage costs. The misconception when new employees are recruited is that they
only need to be able to cook and / or prepare food.
In todays changing environment the Chef is one of the key drivers to business
success and profitability, therefore, when recruiting for new employees the
following needs to be considered;
5) Has the candidate the ability to learn and develop under training?
This simple approach will enable the Executive Chef to delegate responsibilities
and give accountability to other members of his team. Therefore enabling him to
concentrate on the more strategic aspects of the job.
If in doubt set your new recruits tests that relate to their job function. Quite
simply check that they can use a weighing scale, check that they can check an
invoice, check that they have an understanding of portion control.
It is Best Practice that all kitchen personnel can calculate a food-selling price
given a set cost price.
‘Not enough time’ is not an excuse. All elements in this document are designed to
help achieve Optimum Food Cost. A Head of Department will not achieve this
alone, it will only be achieved through teamwork and the understanding of all
the various areas.
55
TBS Training
Effective Food Cost Control should be included as part of the training and
review process within your department. As we have said being a Chef is not just
about cooking and hygiene. It should form a basis for more in depth training in
the future.
It is Best Practice that all kitchen personnel are trained on this manual.
Balanced Scorecard
It could be argued that effective food cost management is related to a balanced
scorecard approach as championed by the company. Success will be achieved by
placing equal importance on the four core values of
Each is a key-determining factor within your operation and each must take equal
importance within your operation.
A lot of functions within the food operation can be given to less skilled staff. With
a little training they can undertake a lot of the basic mis-en-place that takes up
so much time. Think about how this could impact on your business.
• And many functions that require basic chopping, cutting and slicing
56
Colleague Feeding
Aim
To ensure that quality and choice expectations of all our colleagues are met
and the cost of production can be greatly reduced through menu forward
planning. Staff feeding will be the same standard as that of our customers. A
fixed rotational menu will be applied having reflected time of year and ethnic
backgrounds. If your hotel is small and serves a limited amount of staff food
the matrix in the food forecasting and planning section should be applied.
Food & beverage machines – There are currently various machines available
from Coca Cola Enterprises Ltd. Call Group Purchasing Department at
Maple Court for the latest specifications and prices available.
Success Criteria
It is Best Practice and the Hilton people standard that colleagues receive as a
minimum.
• Lunch and Dinner – a selection of hot and cold dishes are offered to
suit cultural tastes as appropriate and includes a vegetarian option.
All dishes are nutritious and wholesome. (Typical dishes include: meat
or fish with potato, vegetables, vegetarian options, salad items, cold
meats, cheeses, fresh bread and butter).
57
Revenue Control and Yield Management
• Revenue Control
• Revenue Capture
• Reports Schedule
• Reports Index
• Covers Definition
• Food Tracker
• Stocktaking
• Sharing Information
58
Revenue Control
Aim
To ensure we are maximising all food revenue segments and any gross profits
associated with them and capturing all relevant data to enable analysis of our
business so that we can make strategic and informed decisions.
Epos Analysis –
Promotions / Vouchers –
• Any food dishes that are discounted or are free of charge to the
customer should be tracked so the Accounts Office can charge the
cost to marketing expenses and credit the food stock account.
Management Account –
Allocations –
Retrospective Discounts –
Allowances –
59
Reports –
• Staff should examine these for every meal period to ensure that the
correct charge is raised to the correct guest.
Success Criteria
a) All HUKI Group discounts are being maximized through nominated food
suppliers.
60
Revenue Capture
To ensure that all food services provided to our guests are charged for it is
essential to put in place basic revenue capture measures. Many control
mechanisms are already set up within Fidelio and the various EPOS systems
within the company such as Micros and Remanco.
It is vital that EPOS systems are used to their full potential by ensuring every
employee has their own system key. This will enable management to track
training needs and sales performances by employee. It will also ensure that there
is a segregation of duties for departmental cashing up. Keys should be assigned
with the relevant system responsibilities per employee depending on job title and
position.
It is imperative to have an EPOS champion per hotel so that the system database
is current and correct for items and prices, otherwise use of open food &
beverage sales keys will occur, rendering any data analysis useless for
stocktaking, tracking sales trends, menu costing, menu engineering and staff
performance incentive schemes.
It is Best Practice that all dishes set up on the EPOS system match the hotel
menus and menu prices to eliminate the use of the open food key button.
Revenue is charged correctly and that all historical data is accurate and will
assist in making strategic business decisions based on fact.
The Management Team should monitor use of voids, open checks and cancelled
checks to eliminate any possible foul play and to ensure that staff can be
identified if they are having legitimate problems with using the system.
61
Key Responsibilities
Below is a table listing employee responsibilities for the EPOS system.
62
Remember that it is essential that there is “segregation of duties” in place so that
no member of staff can reconcile their own cash takings. In many hotels a Duty
Manager will sign for a pay-in once it has already been completed. This is not
acceptable as they are only signing to say that the member of staff has reconciled
their own takings.
Restaurant staff should liase with the C&B Sales Department to ensure numbers
for lunch and dinner match the final numbers discussed at the “Meet and Greet”
with the organiser in the morning. This will ensure extra diners are charged and
not just processed as inclusive.
63
Financial Responsibilities Checklist
Use the following checklist to assess how you are helping the Management Team
to successfully control Food Cost Management.
Epos System
1. Are all menu items on EPOS system and correctly priced?
2. Are the Open Food & Beverage keys disabled?
3. Are reports generated and monitored for Voids, Open Checks etc?
4. Are all employees on system current and have relevant responsibilities?
5. Are there enough members of the Management Team with good system
knowledge in case of sickness or staff turnover?
6. Are departmental pay-ins authorized and checked by the Management Team
with no member of staff being able to reconcile their own cash takings?
7. Has the “No Sale” button been removed from the tills?
8. Are all items on system set up for the correct sales categories?
E.g. Is a cup of coffee coded to food sales?
9. Are daily saves completed by Night Audit?
10. Are touch screen pads in outlets user friendly for staff to use correctly?
Revenue Control
1. Are guests asked to produce proof of a signed room key card when ordering
items in the F&B outlets?
2. Are reconciliation’s carried out to ensure that revenue matches food orders
taken in the kitchen?
3. Are Meal Plan reports used to ensure correct charging of inclusive and
exclusive diners? Are these reports attached to departmental pay-ins so Night
Audit and Income Auditor can check them?
4. Are delegate numbers checked and recorded in the restaurant or meeting
rooms to ensure additional attendees are charged?
5. Are all complimentary items authorized with a Management signature?
6. Are all discounts recorded on a Revenue Deduction sheet and credited to Cost
of Sale account and debited to Expense accounts?
Reports
1. Is a Daily Food Cost Tracker sheet completed and issued daily to the
Management Team?
2. Is a Daily Actual Revenue & Covers report issued to the individual outlets
daily?
3. Is a Weekly and Monthly sales forecast issued to the individual outlets?
4. Is a Food Supplier Usage sheet completed and issued daily to the chef?
5. Is a monthly Food Cost result completed and issued to the chef with a full
breakdown of revenues, stock values and credits?
6. Is chef issued with a General Ledger Account (180 characters) report so he
can check all invoices coded, and credits given for the Food Cost of Sale account?
Miscellaneous
1. Does the closing stock value generated from the stock sheets match the figure
on the Balance Sheet?
2. Are all Food Invoice Batch headers signed and authorized in accordance with
64
“Segregation of Duties”?
3. Are prices updated regularly on the stock sheets to give a true valuation of the
closing stock value?
4. Is the chef assisted at month end by a member of the Management Team when
counting physical stock?
5. Have you checked that there are full menu costing sheets for every dish served
in the hotel and that these have been reviewed quarterly to ensure that they are
relevant?
6. Are all delivery notes, un-batched invoices & credit notes accrued at month
end into the Food Cost of Sale account?
7. Are all suppliers used by chef nominated?
8. Is there a good mix of use between the two nominated suppliers for a main
food grouping to ensure that the hotel is buying at the most competitive price?
E.g. Are the two nominated meat suppliers bidding for business with cheaper
prices than their competitor?
65
Reports
It is essential that as a business we are able to analyse all available data. This will
enable informed decisions to enhance our business. With such a diverse portfolio
of hotels encompassing many different food outlets and staff positions it would be
wrong to say that one solution will meet all needs. However the main
fundamentals of reporting will be very similar throughout the group.
The above are fundamental in controlling revenue and cost of sale and should be
readily available and utilised by as many departments as possible.
Unfortunately within the portfolio of hotels there are many different IT systems
and versions to control our food outlets such as Micros, Remanco, Fidelio F&B
and Uniwell, but all of these systems are capable of producing data to help run
the business.
The system manuals should be checked to see what is available and then a table
produced for what each hotels individual requirements are, who needs them and
at what time.
The following reports section list reports available on Micros. As stated above a
reports schedule should be drawn up and issued for other systems.
66
Financial Controller
Report Schedule
Title Frequency Content
Revenue Report Daily Breakdown of revenue centres
Off Line Payments Daily Any off line payments used
Food Discounts Daily Any discounts given on food
Beverage Discounts Daily Any discounts given on beverage
Outlet Transfers Daily Transfers between revenue centres
Micros/Fidelio Balance Daily Revenue balances into Fidelio
Revenue Centre Financial Daily Total days business by revenue centre
Serving Period Financial Daily As above except by serving period
System Financial Daily As above consolidated
Payment Daily All payments that have been used
Employee Closed Check Report Daily See how checks are opened/closed
67
Chef
Report Schedule
Title Frequency Content
68
Bars Manager
Report Schedule
Title Frequency Content
Restaurant Manager
Reports Schedule
Title Frequency Content
69
Index
Daily Reports
- Overview of reports and who should receive the reports
that can be pulled off by the Night Auditor at the end of the day.
Weekly Reports
- Overview of reports and who should receive the reports
that can be pulled off by the Night Auditor at the end of the
week. (There are two additional reports from those pulled off
on a daily basis).
Monthly Reports
- Overview of reports and who should receive the reports
that can be pulled off by the Night Auditor at the end of the
week. (There is one additional report from those pulled off
on a daily basis).
Miscellaneous Reports
- Overview of additional miscellaneous reports, which can be
used by various Heads of Departments
70
Daily Micros Reports
The reports in the following section are printed every night by the Night Auditor.
This section identifies the areas of importance that should be looked at and who
should be using them. Examples of some of these reports can be found in the
appendix.
71
Daily Reports
Report Name To Whom
1. Revenue Report - System Wide - Major FC/Hotel Micros Project Mgr
Group (MPM)
2. OffLine Payments - System Wide FC
3. Food Discounts - System Wide FC/Chef/F&B Mgr/Rest. Mgr
4. Beverage Discounts - System Wide FC/F&B Mgr/Bars Mgr
5. Outlet Transfers - System Wide FC
6. Micros/Fidelio Balance Report - System Wide FC/GM/MPM
7. Revenue Centre Financial Report FC/Rest Mgr/Bars Mgr/F&B
Mgr/Chef
8. Serving Period Financial Report FC
9. System Financial Report - System Wide FC
10. Payment Report FC
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food, beverage,
wine, tobacco/miscellaneous and tips.
The final column shows the number of covers for a revenue centre, by meal period
Points to note -
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of offline payments are shown going across the report (e.g. cash, cheque
etc)
Points to note - Offline payments should only be made when the interface between Micros
and Fidelio is down. The revenue on this report should be posted manually into
Fidelio.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).
72
4. Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).
The revenue centres and meal periods are shown down the left hand side of the report, and
the transfers in/transfers out are shown going across the report
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per guest,
number of checks and average spend per check.
The breakdown at the bottom of the report is the same information that the User pulls off
at the end of shift report to cash up. This information includes payments, discounts, and
total sales.
Points to note - Voids should be checked on a daily basis to assess lost revenue, food and
service quality and possible training needs.
- Error corrects and cancels should be checked to assess training needs.
73
8. Serving Period Financial Report - By Shift
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
Points to note - This information assess results by individual shifts. If there are any
concerns regarding the previous points then this report should be checked to
see which shifts are the cause.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of payment are shown going across the report (e.g. cash, cheque etc)
74
Weekly Micros Reports
Weekly Micros reports should be printed on the Thursday night each week after
the end of day reports. This allows us to compare food & beverage results on
Micros with those posted onto Fidelio. Examples of some of these reports can be
found in the appendix.
75
Weekly Reports
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food, beverage,
wine, tobacco/miscellaneous, and tips
The final column shows the number of covers for a revenue centre, by meal period
It should be noted that offline payments should only be made when the Front Office
interface is down. If this report is showing offline payments, it should be checked very
carefully the reason for these.
The revenue centres and meal periods are shown down the left hand side of the report, and
the different types of offline payments are shown going across the report (e.g. cash, cheque
etc)
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).
76
4. Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report, and
the different discount types are shown going across the report (e.g. HR11, Business
Privilege).
The revenue centres and meal periods are shown down the left hand side of the report, and
the transfers in/transfers out are shown going across the report
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per guest,
number of checks and average spend per check.
The breakdown at the bottom of the report, is the same information that the user pulls off
at the end of shift report to cash up. This information includes payments, discounts and
total sales.
77
9. System Financial Report - System Wide
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
The following two reports are additional reports that are pulled off weekly
The major groups are shown down the left hand side of the report, with sub totals
underneath each major group shown.
The weekly sales figures are shown in the first column, followed by the sales mix
percentage.
The weekly costings, together with the weekly cost mix percentage are then shown, together
with the weekly gross margins.
Other information shown at the bottom of the report includes the total sales count, total
gross sales, total preparation count and total preparation cost.
This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft
drinks etc.
78
Monthly Micros Reports
Monthly Micros reports should be printed on the last day of every month. These
reports consolidate each day’s information into one final selection of reports,
which can be used to assess the performance of the food & beverage team.
Examples of some of these reports can be found in the appendix.
79
Monthly Reports
The revenue shown is broken down further into meal periods of the different revenue
centres.
Within each revenue centre/meal period you can see the major groups (e.g. food,
beverage, wine, tobacco/miscellaneous, and tips
The final column shows the number of covers for a revenue centre, by meal period
It should be noted that offline payments should only be made when the front office
interface is down. If this report is showing offline payments, it should be checked very
carefully the reason for these.
The revenue centres and meal periods are shown down the left hand side of the report,
and the different types of offline payments are shown going across the report (e.g. cash,
cheque etc)
The revenue centres and meal periods are shown down the left hand side of the report,
and the different discount types are shown going across the report (e.g. HR11, Business
Privilege.
80
4. Beverage Discount Report - System Wide
This report shows any beverage discounts that have been given
The revenue centres and meal periods are shown down the left hand side of the report,
and the different discount types are shown going across the report (e.g. HR11, Business
Privilege.
The revenue centres and meal periods are shown down the left hand side of the report,
and the transfers in/transfers out are shown going across the report
The revenue centres and meal periods are shown down the left hand side of the report.
Across the report shows revenue by major groups (food, beverage, wine,
tobacco/miscellaneous and tips, with a total revenue column.
The column showing inclusives should be looked at and analyzed carefully. These are
extracted from the Fidelio balance.
Transfers in/out, covers and voids (voids from previous rounds in the Bar, menu item
voids) can also be seen in this report
Other information includes cancel totals, error correct totals and no sales count.
The report is split with a new sales total figure, number of guests, average spend per
guest, number of checks and average spend per check.
The breakdown at the bottom of the report is the same information that the user pulls
off at the end of shift report to cash up. This information includes payments, discounts,
and total sales.
81
9. System Financial Report - System Wide
The information shown in this report is laid out identically to that in the revenue centre
financial report (7).
The major groups are shown down the left hand side of the report, with sub totals
underneath each major group shown.
The weekly sales figures are shown in the first column, followed by the sales mix
percentage.
The weekly costings, together with the weekly cost mix percentage are then shown,
together with the weekly gross margins.
Other information shown at the bottom of the report includes the total sales count, total
gross sales, total preparation count and total preparation cost.
This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft
drinks etc.
The menu items/record number is shown down the left hand side of the report.
The columns across the top of the report show from left to right, price, monthly quantity
sold, monthly sales totals of that particular item, monthly quantity percentage, monthly
sales mix percentage, menu item cost, monthly quantity prepared, monthly cost total,
monthly quantity cost percentage, monthly cost mix percentage and monthly gross
margins
82
Miscellaneous Micros Reports
83
Miscellaneous Reports
84
D. Menu Engineering Report
This report gives the Chef/F&B Operators a breakdown of each menu item.
You can select all of the revenue centres (system wide) or one particular revenue centre
e.g. Restaurant
The menu item number and menu item names are shown down the left hand side of the
report.
The columns across the report are as follows: -
1) Current Qty Sold - Quantity of that particular item that has been sold
2) MM % - Menu mix as a %
3) Sales Total - Total sales of that particular item
4) Sales Mix % - Percentage as a sales figure against the total mix
5) Qty Prep - Quantity of the item that has been prepared by the Kitchen
8) Prep Cost - Qty Prepared x item cost
9) Menu CM - Menu Contribution Margin - Total sales minus the preparation cost
10) Item CM - Item Contribution Margin - Item sales minus the preparation cost
11) Category - Star (high sales - high GP), Dog (low sales - low GP), Plow horse (low
sales - high GP), Puzzle (high sales - low GP).
85
G. Time Period Summary Report
With the advent of the new working time directive this report will become particularly
important when scheduling staff. A Restaurant / Bars Manager can see at a glance when
the Restaurant / Bar or Room Service is at its busiest and quietest. By using this report
and by multi-skilling staff we are able to schedule staff to the optimum, reducing labour
cost without impacting on service quality.
The figures on this report are easier to understand when put onto an excel spreadsheet
and placed into graph format. By doing this we can see sales peaks and troughs and
understand our busiest and quietest periods during the day.
86
Covers Definition
Brand Standard = any person ordering a food menu item including
tea and coffee
Restaurant 1
Breakfast
Lunch
Dinner
Restaurant 2 / 3 / 4
Lounge, Deli, Bar and Caffe Cino Food (not second restaurant)
Breakfast
• Any cover / person served from this area between 6.00 am and
11.00 am. This includes single services of tea and coffee. Where
guests order multiple teas and coffees, this should be treated as 1
cover per person.
Lunch
Dinner
87
Functions and Banqueting
Breakfast
Lunch
Dinner
Others
Tea and coffee served in a function room or lobby or other related area
throughout the day and including nibbles and canapés, offered with
beverages (alcohol, teas, coffees).
This does not include sandwiches, which are a lunch or dinner item.
Room Service
Breakfast
Other Covers
Bar 1
Food and nibbles served over the bar counter and charged for i.e. pre
packed crisps and snacks.
88
Non-Cover Sales
Day and 24-hour delegates who have multiple servings of food items should be
recorded as 1 cover per item served.
i.e. morning coffee, lunch, afternoon tea is equal to 3 covers.
It is important that it is identified and trained into team members that covers
need to be accurately recorded in order to track average spend and judge
volume of business for staffing etc.
Ensure during banquets and functions that minimum numbers of covers are
charged for.
It is Best Practice that contracts are signed for minimum numbers, and that
minimum numbers are charged without fail.
89
Nominal Code Definitions
Food Sales
Breakfast
Lunch
• Food served between the stated opening times of 11.00am
and 6.00pm. This includes the value of food served with
inclusive packages.
Dinner
• Food served between the stated opening times of 6.00pm
and 11.00pm. This includes the value of food served with
inclusive packages.
Banqueting Food
Bar Food
Other Catering
• All Night Porter food (ex room service), all takeaway food
and all outside catering.
90
Food Tracker
Once planning, delivery, preparation and menu sales are complete, in order to
track your performance you must have a tool to combine all of your component
parts. A useful tool for this is a food tracker, which will give you a rough
estimation of week, or month to date food cost%.
See appendices.
If all the information in the example is used and data is up to date then a
reasonably accurate picture should be built of the running months food cost.
However the following should be noted and may cause adverse effects if not
controlled properly
1) Revenues will rise and fall with additional and rebated charges.
2) Credit notes will reduce costs. (Any awaiting credits should be made clear
on delivery notes).
4) Invoices not received for delivered and used goods will reduce costs.
5) Invoice prices should be checked for accuracy against price list and
purchasing manual.
7) The food tracker does not take into account the movement in stock levels
or stock valuation.
8) Invoices should be broken down into categories (meat, fish, dairy etc) and
monitored against average consumption.
Regularly liase with the Finance Department to see that revenues and invoicing
are up to date.
Regularly liase with Stores and Purchasing to see that all invoices are in place /
received.
In order to optimise use of the food tracker a weekly target of cost against
revenue should be set in order to have controlled expenditure.
91
Stocktaking
Aim
To provide a true and auditable value of monthly assets and to provide data for
the calculation of monthly food cost profit.
During all stock takes you must understand that you will never get a 100%
accurate result as a) stock moves and b) you will always miss something.
Count in
However also remember that luxury items such as Caviar, Saffron, and Fois
Gras etc have a high net value, therefore with these items you need to be more
accurate and precise.
Don’t worry too much about the Pennies, it is the Pounds £ that are important.
A minimum of two (2) people should stock take, 1 counting and 1 recording,
checking and questioning the count and value. One of the counters should be
independent of the kitchen.
92
It is a misconception that the Head Chef has to do all of the stocktaking. The
important thing is that you have somebody who
and
Stocktaking can be carried out by anyone as long as the above rules are followed.
If you count in the same order you will be able to compile and use the same stock
sheets weekly /monthly. Remember however to regularly update them as menus
and business changes.
Example;
Use basic Excel spreadsheets per sub department and get each section Chef to
count his own fridge and workstation.
If you have a large enough operation Dry Stores should have a ledger that
records stock movement in and out of the store. Periodic spot-checks will ensure
that no items are missing. (Could be computerised to give a real time value).
When stocktaking, always question the reason goods are in a certain fridge or
store. For example would you expect to see 5 kg of smoked salmon in the dairy
fridge or 5 fillet steaks in the bar, knowing full well they do not have it on their
menu or indeed a grill?
93
From time to time you will have items in the store that do not seem to be used.
Also known as slow moving items. As they inflate the value of stock you either
need to use them or get the Financial Controller to dispose of them.
5) Revenue figures to agree to business and reflect sales position for exact
stock period excluding VAT.
Calculations
Consumption
Food Cost Percentage = ------------------------------------- x 100
Net Revenue ( -Allowances)
94
Taking of Food Stock
Food stocks should be taken monthly or weekly if adverse results are being
produced.
It is Best Practice that stock is counted weekly if food cost percentage is not
being achieved.
3) The total stock valuation must be the figure used on calculation of the
trading result.
95
Table Management and Food Production
The management of both hot and cold tables is a ‘science’. Look upon these as
visual Table d’ Hote menus. The majority of customers eat with their eyes. So
what they see forms their expectation of tastes and flavours.
In order to successfully sell buffets they must have a certain ‘WOW’ factor.
Every time a customer sets eyes on the buffet they must have a ‘Hilton Moment’.
a) Freshness
b) Colour variation
c) Uniform dish display
d) Attractive but not over garnished
e) Visual variation (height)
• Do not cook everything off prior to service; choose dishes that can be
cooked quickly.
• Ensure that the Chef on the table understands all the dishes, all the
ingredients, and cooking method.
• The Table Chef must have a personality and character so that they can
talk and sell food to the customers.
• Carving techniques must be taught, a bad Table Chef will cost you money
in wastage.
• Fully brief all restaurants, bar, lounge and even reception staff on what is
on the menu.
• When replenishing dishes, take old dishes away and replenish with a new
dish. N.B. Do not top up dishes in front of the customer.
• Remember that the food quality expectation of the last customer is the
same as the first.
96
Breakfast
Using the knowledge gained from peaks and troughs, food production should be
geared up to just in time cooking.
Monitor the average consumption over a weekly period. Establish what the
average mix of business is by consumption of key production items;
• Scrambled Eggs
• Bacon
• Sausages
Scrambled Egg
Bacon
• When bacon is trayed up do not overlap the rashers. Do not stack trays
on top of each other. This will stop the rashers sticking together and
causing increased wastage or poor portion control. Bacon must be cooked
using the methods in the breakfast specification manual.
Sausages
• These must be trayed up so that there is space to get an even colour on the
product during the cooking process. They should be oven baked. Under
no circumstances should they be fried.
Re-Stocking
• Once peaks and troughs have been established use a ½ size dish for
trough and a full-size for peaks.
When stocking a product, do not ‘tip’ new in on top of old, this leads to poor
presentation and a build up of old product generally in fat at the bottom.
The method is to take away the dish that needs restocking, have a new dish ready
with new product and place (do not tip) the old product on top, taking care, so no
liquid comes from the old onto the new.
97
Lunch / Dinner
Production for lunch and dinner tables follows a similar system to breakfast. The
basis being the forecast of number of covers and at what time they will be eating.
This covers the majority of bookings of groups. i.e. tours and Conferences.
The entrée dishes should only be cooked off for immediate use, ‘little and often’.
This will reduce wastage.
When cooking a la carte production. Ensure that your mis en place is only
sufficient to cover your immediate service needs. Do not batch cook for a la
Carte, except in the cases of Soups, Terrines and Stocks.
Take Micros sales analysis to help predict volumes. Remember sales mix will
vary according to weekend and midweek.
Room Service
Food Production
• Look for value for money ingredients. Look for ingredients that you can
get consistently.
98
Sharing Information
To make strategic business decisions concerning the hotels food and beverage
outlets it is essential that all data is readily available and is accurate.
All information produced and issued daily by the Accounts Office should mirror
any revenue or statistical reports that can be produced from Oracle.
99
Information Table
Below is an example of the various information that should be shared to manage
food cost profitability.
Daily Revenue, Covers & Average Spend by To ensure covers and revenue match forecast and
Department. match dishes served from kitchen.
Monthly General Ledger Report For The To ensure all suppliers on report are food
Food Cost of Sale Account (294-31001). suppliers. All credits for inter departmental
transfers have been posted. All credits for
discounts, management complimentary account
and promotions have been posted.
Monthly Food Cost Result. This should list opening and closing stocks,
supplier usage, credits for IDTs, credits for
discounts, management complimentary account
and promotions.
Monthly EPOS Sales Report by Item. To track success of menu dishes and ensure menu
cost (if applicable) is correct per item.
Daily Revenue Deduction Tracker. Track all deducted revenue such as allowances,
discounts, promotions and management
complimentary account.
Monthly Oracle Statistics Report. Lists revenue, covers, average spends and
sleeper/diner ratios. Utilise for forecasting and
planning menus.
100
Optimum Food Costing
This can be simply defined as follows;
All sections contribute towards optimizing food cost and although some sections
are small, all are as equally important to Best Practice management.
On a monthly basis the hotel can calculate its optimum food cost based on the
previous months sales. The calculation is made up of a combination of the sales
mix and achievable food cost exercises.
From menu costing, sales mix and the AFCE’s the hotel should calculate its
forecasted monthly cost. Any variance to this forecasted monthly cost should be
investigated.
The financial or food and beverage controllers need to calculate the following;
From the example below based on previous calculations the optimum food cost
for the trading period is 25%. If the calculations have been made correctly this
will give a true picture of what the food cost should be within the hotel.
101
Example
The cost values are calculated from the menu cost sales mix analysis, AFCE’s
and Banqueting menu sales / cost matrix tracker.
102
Appendices
Charts and Food Cost Calculations
• Conversion Formulae
• Conversion Tables
103
Conversion Tables
Exact Formulae –Dry Goods
Workable Equivalents
½ 10
1 25
2 50
3 75
4 100
5 125
10 250
15 375
20 500
104
Conversion Formulae
To Add VAT
Example
105