Food Cost Manual

Food Cost Management Best Practice Manual ‘A recipe for success’

Index Section 1 – Management Overview !

Objectives and Outcome

!

Key Performance Indicators

!

Why have a manual?

!

Food Cost Management Facts

!

Who needs to be involved?

!

Management Responsibility Table

!

How to use the manual

!

Food Cost Management Action Checklist

!

Process Flow Chart

!

Questions

!

HUKI Food Cost Management Best Practice

Section 2 – Planning !

Menu Costing

!

Sales Mix Analysis

!

Gross and Net Weights

!

Achievable Food Cost Exercise

!

Setting Menu Selling Prices

!

Forecasting and Food Cost Planning

!

Banqueting Costing and Purchase Planning

!

Peaks and Troughs Planning

!

Shopping Basket

!

Profit Maximisation

!

Budgeting 2

Section 3 – Ordering, Receiving, Storage, Control and Wastage !

Par Stocks

!

Must Stocks

!

Ordering – The Purchase Cycle

!

Receiving and Goods In

!

Storage

!

Security and Key Control

!

Out of Hours Policy

!

Wastage and Out of Date Stock

Section 4 – People !

People

!

Colleague Feeding

Section 5 – Revenue Control and Yield Management !

Revenue Control

!

Reports

!

Covers Definition

!

Nominal Code Definitions

!

Food Tracker

!

Stock Taking

!

Table Management and Food Production

!

Optimum Food Costing

!

Sharing Information

Section 6 – Appendices !

Charts and Food Cost Calculations 3

Management Overview !

Objectives And Outcome

!

Key Performance Indicators.

!

Why Have A Manual?

!

Food Cost Management Facts

!

Who Needs To Be Involved?

!

Management Responsibilities Table

!

How To Use The Manual

!

Food Cost Management Action Checklist

!

HUKI Food Cost Management Best Practice

!

Questions

4

Objective • To provide solutions and tools to effectively manage hotel food cost: Making Food Cost Management A Way of Life.

• Put in place monitoring and control procedures to make sure that these solutions and tools are used.

Outcome • This manual will allow the hotel to develop a systematic approach to food cost management that will bring consistent, controlled and planned profitability.

Leading to: - Optimum Food Costing. • Consistent Standards Throughout The Hotel And Across The Hilton Estate. • Management Has Clear Understanding of Best Practice. • Improved Hotel Food Costs. • Improved Efficiency. • Improved Customer Service. • Improved Staff Training And Knowledge.

• GOP Impact On Balanced Scorecard.

5

Key Performance Indicators for Best Practice Food Cost Management. (KPI’s) • Planned food cost is achieved per period • All menus and buffets are costed • Monthly food purchasing plan is in place • Par stocks in place • Monthly shopping basket exercise completed • Controlled ordering procedure in place • Controlled receiving and storage procedure in place • Recorded wastage procedure active • Staff training and knowledge up to date • Table management procedures in place • Staff feeding meeting Hilton people standards • Effective revenue control in place • Stocktaking accurate and consistent

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Why Has It Been Created? •

Hilton Hotels have a varying level of efficiency in food cost management.

•

Control Systems to manage food cost vary from hotel to hotel.

• No formal document exists to teach Chefs and Managers the Hilton Standard.

•

To separate the food operations process into component parts and give clear operational procedures for each part.

•

There is little understanding of the formal mechanics of food cost management.

•

There is little understanding of what action to take to improve costs generally or what contingencies to make, to react to changes in business demands.

•

Change in management and staffing means that it is not always possible to work to the same standards, and due to the multi cultural and multinational nature of our kitchen brigades systems and procedures may be different in other countries.

•

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.

•

Optimum unit food cost is not planned.

•

To inform, educate and share knowledge with management and kitchen staff on the importance of food cost management.

• Food Cost Management Is Not Just The Responsibility Of The Chef!

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. Year

Sales

Purchases

Cost

2000

£119.2m

£34.4m

28.88%

2001

£123.7m

£35.3m

28.54%

2002

£122.5m

£37.2m

30.39%

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. 1 x Extra banqueting dinner due to an extra delegate arriving late. 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, Executive Head Chef, Food and Beverage Manager / Food Services Manager, Financial Controller, Conference and Banqueting Sales and Operations Managers, Restaurant Manager, 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 •

General Manager – Overall executive responsibility for food cost management likened to responsibility for all revenue streams and control processes within the hotel. Strategic food cost planning.

•

Executive Chef – Daily management and control of all processes, buying, menu planning and costing, receiving, preparation, cooking, stock control and wastage control etc. Strategic food cost planning.

•

Food and Beverage Manager, C&B Manager - Efficient service, revenue maximisation, sales, table management, wastage control, staff training and customer relationship management. Strategic food cost planning.

• Conference & Banqueting Sales Manager – Revenue maximisation, profit planning and customer relationship management.

• Financial Controller – Provision of effective control measures, revenue capture, audit and periodic review of accuracy.

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Management Overview

X

Menu Costing

x

x

x

x

Gross and Net Weights

x

X

x

Setting Menu Selling Prices x

x

Stores

HR Manager

C&B Sales Manager

F&B/FS Manager x

x

Achievable Food Cost Exercises Forecasting and Food Cost Planning

Head Chef

Financial Controller

General Manager

Management Responsibilities Table

x x

x

x

x

x

x

x

x

x

Banqueting Costing and Purchase Planning

x

x

Peaks and Troughs Planning

x

x x

Shopping Basket

x

Profit Maximisation

x

x

x

x

Ordering

x

x

x

Receiving and Goods In

x

x

x

x

x

Budgeting

x

Storage

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 Reports

x x

x

x

Covers Definition

x

x

Nominal Code Definitions

x

EPOS Management

x

Food Tracker

x

x

Par Stocks

x

x

x

x

x

Must Stocks Stocktaking

x

Table Management and Food Production Optimum Food Costing

x

x

x

x

x

x

x

x

x

x x

x

10

x

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.

•

It is Best Practice that all menus are costed.

•

Best Practice is for all costings to be reviewed at least every 3 months to take into account market price fluctuations and seasonal changes.

•

It is Best Practice that a product photograph accompanies all menucosting sheets.

•

Achievable food cost exercises should be undertaken at least every 6 months as Best Practice. Every 3 months if there is a food cost problem.

•

It is Best Practice that 3 AFC exercises are undertaken per service as a minimum.

•

Best Practice is for the Financial Controller to undertake this exercise to review hotel selling prices against cost percentages.

•

Best Practice is to have a 7-9 day average stock holding.

•

Best Practice is for the staff food to come from the public menus.

•

It is Best Practice that the shopping basket exercise is carried out 3 monthly and then at the input of new menus or dishes.

•

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.

•

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.

•

It is Best Practice that nominated suppliers are adhered to when purchasing food products.

•

It is Best Practice that individual supplier order sheets are used.

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 to return inferior quality goods.

•

It is Best Practice that all kitchen personnel can calculate a food-selling price given a set cost price.

•

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 to use a Food Tracker System.

•

It is Best Practice that a stock valuation is obtained per accounting period.

•

It is Best Practice that stock is counted weekly if food cost percentage is not being achieved.

•

It is Best Practice to calculate Optimum Food Cost as part of month end calculations.

•

It is Best Practice that as a minimum all red sections of the Food Cost Management Action Checklist.

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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. 3) If relevant each section has detailed procedures for you to follow. 4) The manual contains appendices of recommended blank masters for reference and copying. 5) The responsibilities of each manager are identified in the appendices. 6) Each section has been given a degree of importance of effective food cost management. Red sections are ‘essential tools’ Yellow sections are ‘recommended tools’ Green sections are ‘desirable tools’ should problems still exist. 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. 8) Formulate an action plan of what needs to be done and allocate responsibilities.

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Food Cost Management Action Checklist Action Area

Section

Menu Costing

2

Achievable Food Cost Exercises

2

Setting Menu Selling Prices

2

Forecasting and Food Cost Planning

2

Banqueting Costing and Purchase Planning

2

Budgeting

2

Ordering

3

Receiving and Goods In

3

Storage

3

EPOS Management

5

Wastage and Out of Date Stock

3

Revenue Control

5

Nominal Code Definitions

5

Optimum Food Cost Calculation

5

Profit Maximisation

2

Security and Key Control

3

Out of Hours Policy

3

Staff Feeding

4

Food Tracker

5

Par Stocks

5

Stocktaking

5

Table Management and Food Production

5

Gross and Net Weights

2

Peaks and Troughs Planning

2

Shopping Basket

2

Continuous Review of Cost, Prices, Accuracy

Yes / No

Throughout

Covers Definition

5

People

4

Reports

5

Must Stocks

5

Red areas are actions that are essential standards of operation. Yellow areas are recommended if food cost problems exist. Green areas are desirable action areas.

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Before You Go Any Further Ask Yourself These Few Simple Questions •

Is food cost profit important to me?

•

Do I know what to do if I get or know I am going to get a poor food cost result?

•

Would I like to achieve a better food cost for the business?

•

Do I know how much any % improvement in food cost would mean to hotel profitability?

•

Can I put in place an action plan to improve?

•

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 how to calculate food-selling prices to achieve a profit?

•

Do I know the cost of each dish sold and are my menus costed?

•

Do I know the average food cost of my buffet?

•

Are any or all of the tools in place to manage food cost?

The list could be endless but if you answered NO to any of these questions then this manual could benefit you.

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Planning !

Menu Costing

!

Sales Mix Analysis

!

Gross and Net Weights

!

Achievable Food Cost Exercise

!

Setting Menu Selling Prices

!

Forecasting and Food Cost Planning

!

Banqueting Costing and Purchase Planning

!

Peaks and Troughs Planning

!

Shopping Basket

!

Profit Maximization

!

Budgeting

This Section Contains KPI’s !

All menus and buffets are costed

!

Monthly food purchasing plan is in place

!

Monthly shopping basket exercise completed

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.

Reasons and Procedures for Menu Costing 1) Recipe costing must be completed for all dishes on the menu, including banqueting and table main courses. 2) Costing exercises must be undertaken on all non-menu buffets. i.e. breakfast and carvery. 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). 5) Any changes should be noted and selling prices or recipes adjusted accordingly. 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.

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7) Ensure that all staff are trained to prepare dishes to the recipes of each dish, and that the method is followed. 8) Banqueting meals should be costed in multiples of 10 portions for single dishes such as, melon, chicken or steak etc, 50 portions for soups and 20/25 for pates and terrines. 9) Canapés should be costed in multiples of 20 portions minimum. (Note that small canapés can be a high cost item due to preparation and content. 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. 16) Achievable food cost exercises need to be carried out on restaurant breakfast, lunch and dinner buffets. (See achievable food cost exercises). It is Best Practice that all menus are costed.

Method Menu or dish costings should be made in multiples of 10 portions. This allows us to gain an average, as however well people are trained and follow procedures there will always be some variance or ‘heavy handedness’. 1) Gather ALL ingredients for 10 portions. 2) Itemise on menu costing sheet. 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. 7) Total cost for 10 portions. Divide into 1 portion. You now have your cost per portion / menu item. 8) Calculate your selling price based on your desired food cost percentage. (See formulas). 9) Describe method of cooking. 10) Photograph for consistent presentation standard You have now prepared a menu-costing sheet. Remember that if using compound dishes such as sauces or Dauphinoise potatoes, these need to be costed separately. Please note the following simple example Menu Grilled Sirloin Steak, Tomatoes, Mushrooms, French Fries, Green Beans Ingredients, Weights and Costs Sirloin Steak 225g x10

@ £2.55 / 225g

= £25.50

French Fries 75g x 10

@ £0.225 / 75 g

= £2.25

Green Beans 75g x 10

@ £0.32 / 75 g

= £3.20

Tomatoes x 10

@ £0.15 / each

= £1.50

Mushrooms 25g x 10

@ £0.35 / 25g

= £3.50

Red Wine Sauce (Previously Cost) Total Cost

@ £0.05/ portion

= £0.50 = £36.45

Therefore the cost of 1 dish is £3.645. (£36.45/10)

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To calculate the selling price of the dish assuming a food cost percentage (%) of 30 % the selling price would be: Food Cost x 100 --------------------30

= Net selling price

£3.645 x 100 ---------------- = £ 12.15 net 30

You now have a net price. Before serving to the customer you must add VAT at the current rate. £12.15 x 1.175 = £14.28. Therefore in order to achieve a food cost of 30%, this example must be sold to the customer for £14.28. This process should be applied to all dishes whether singular or compound. If you follow these simple steps your menu costing will be accurate. After dish costing and dish preparation a photograph of the completed dish should be taken and placed with the cost sheet. It is Best Practice that a product photograph accompanies all menu-costing sheets.

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%.

Breakfast Room Service Restaurant 1 Restaurant 2 Bar Banqueting Total

Sales Mix (%)

Total Sales Value (£)

Outlet Food Cost %

Total Food Cost (£)

20% 10% 25% 5% 5% 35%

10000 5000 12500 2500 2500 17500 50000

15 35 28 40 35 25 26

1500 1750 3500 1000 875 4375 13000

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.

Breakfast Room Service Restaurant 1 Restaurant 2 Bar Banqueting Total

Sales Mix (%)

Total Sales Value (£)

Outlet Food Cost %

Total Food Cost (£)

30 5 25 25 5 10

15000 2500 12500 12500 2500 5000 50000

15 35 28 40 35 25 27.5

2250 875 3500 5000 875 1250 13750

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. The examples below highlight this. Example: - Hotel B serves 6000 covers to achieve an average spend of £12.41.

Breakfast Room Service Restaurant 1 Restaurant 2 Bar Banqueting Total

Sales Mix (cvrs)

Average Spend (£)

1750 500 2000 500 250 1000 6000

7.5 9.5 12.5 18 2.5 22 12.41

Total Revenue (£) 13125 4750 25000 9000 625 22000 74500

Outlet F/Cost % 15 35 28 40 35 25 26.78

Total Cost (£) 1969 1663 7000 3600 219 5500 19951

The food cost per cover is £3.325. (£19951 / 6000). 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).

Breakfast Room Service Restaurant 1 Restaurant 2 Bar Banqueting Total

Sales Mix (cvrs)

Average Spend (£)

1925 550 2200 550 275 1100 6600

6.75 8.55 11.25 16.20 2.25 20 11.17

Total Revenue (£) 12994 4702 24750 8910 619 22000 73975

Food Cost per Cover (£) 1.125 3.326 3.500 7.200 0.876 5.500 3.325

Total Cost (£) 2165 1829 7700 3960 241 6050 21945

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.

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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 10 kg @ £4.00 kg = £40.00 divided by 40 (x 250 grm portions) = £1.00 per portion. After cooking the same 10 kg Rib could weigh 9 kg, (10% shrinkage). Therefore, 9kg@ £40.00 = £4.44 / kg divided by 36 (x 250grm portions) = £1.11 per portion 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. Therefore the rule is Gross Raw Weight x Gross Cost ----------------------------------------Net Yield (number of portions)

= Menu Item Cost Per Portion

Another example could be as follows; 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. Therefore in order to establish the AVERAGE cost of a meal served to a customer it is necessary to calculate as accurately as possible the AVERAGE food consumption per customer. This consumption is then applied to AVERAGE revenue per customer or service to give an AVERAGE food cost. 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. Achievable food cost exercises should be undertaken at least every 6 months as Best Practice. Every 3 months if there is a food cost problem.

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. 2) All participating team members need to be involved and briefed on their roles and responsibilities. Therefore good teamwork is required between the kitchen, restaurant, F&B Management and control departments. Decide before starting who will do what. 3) All food consumed during a service period needs to be given a value. Therefore an opening and closing stock figure needs to be made to calculate consumption. Values need to be given in the same manner as individual dish costing. 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.

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6) At the end of service count back in all food items that are left unconsumed 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. Food Consumption ------------------------- x 100 Net Revenue

£300.00 --------------£1000.00

x 100 = 30%

10) As the AFCE is an average you will need to undertake a number of exercises. It is Best Practice that 3 exercises are undertaken per service as a minimum. Recommended - 3 lunch and 3 dinner services and 4-5 breakfast services. 11) Having completed the exercises add all your costs and revenues together to find out your average cost. Example. Sample AFCE for restaurant buffet lunch over 3 service periods Service 1 2 3 Total

Covers Served

Food Cost (£)

Net Revenue (£)

Food Cost %

50

133

350

38

125

303.75

843.75

36

250

459

1530

30

425

895.75

2723.75

32.88

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. 14) N.B. where an a la carte menu is in operation during a buffet service. Do not include the covers, revenue or food consumed for a la carte as this will negate the result of purely counting the buffet.

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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. • • • • • • •

Required Food Cost % Sales Mix Revenue Mix Seasonality Fair Market Price / Value For Money Average Spend Potential Price Fluctuations

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 1 600 2 1200 3 1000 4 600 Total 3400

Selling Price 3.50 5.50 6.00 8.75

Total Revenue Sales Mix % 2100 11 6600 33 6000 30 5250 26 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. Menu Item

Sales Mix %

1 2 3 4

11 33 30 26 100

Menu Item Cost % 25 45 30 30

Weighted Cost % 2.75 14.85 9 7.8 34.4

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 you are a Chef ask yourself these questions: •

Do I know what next weeks / months food revenue forecast is or am I just planning to order for the number of covers I expect to serve?

•

How much planning do I do?

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. A planning meeting will enable you to do the following 1) Maintain correct stock levels of food to within 4 days. !

Best Practice is to have a 7-9 day average stock holding.

2) Minimise wastage by ordering and producing correct levels of food. 3) Gives suppliers maximum time to get quality and quantity correct. 4) Negotiate prices and discounts with suppliers based on volume. 5) Plan staff feeding (see below). 6) Minimise number of deliveries and invoices. 7) Review menu and dish costings. 8) Rotate menus effectively. 9) Maintain standards by using fresh commodities, therefore satisfying guest expectations.

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Requirements 1) Precise information about menus and contents especially banqueting. 2) Precise information about house function numbers on a particular date. 3) Past history or trend data of sales in reference to a) Last years sales b) Sleeper density (double occupancy) c) Local events and promotions 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. 6) The above statistics after forecasting revenues can be used to forecast costs for food based on the restrictions imposed by the sales mix, then set weekly spend targets based on revenue / cost percentage. Example – If weekly food sales are £25000 and target food cost is 30%. Then the Chef has £7500 to spend in the week. 7) Plan to sale particular menu items on a particular day to cut down wastage. If a function is being served chicken with mushroom sauce, put it on the restaurant buffet and serve it to the staff. Batch cooking is one of the most effective cost and waste control measures. (See below). 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.

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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

Restaurant Roasts

Soup of day

Function 1

Function 2

Staff

Monday

Beef

Tomato

Melon Chicken Chasseur

Tom Soup Lamb Cutlets

Tom Soup Chicken Chasseur

Tuesday

Lamb

Vegetable

Veg Soup Roast Lamb

Terrine Chicken Chasseur

Veg Soup Roast Lamb

Gammon

Mushroom

Sm Salmon Chicken Kiev

Melon Roast Cod

Melon Chicken Kiev

Rib of Beef

Carrot Soup

Haddock Turkey

Carrot Soup

Carrot Soup Turkey

Pork

Bisque

Buffet

Buffet

Bisque Pork

Turkey

Lentil

Lentil Steak Pie

Buffet

Lentil Steak Pie

Beef and Chicken

Consommé

Pork Steaks

Consommé Pork Steaks

Wednesday

Thursday

Friday

Saturday

Sunday

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.

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10) Look at ways that money can be saved by not compromising on quality. Be imaginative! 11) Accurate recipe / dish costings Always ensure that food forecasts are net of VAT. 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.

Points to remember when forecasting •

Ask questions of reservations about large bookings with no meal requirements at your weekly operations meeting. This is a possible sales opportunity and could prevent a large booking turning up without being forecasted.

•

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!

•

Plan ahead. Forecast in advance, react to changes in demand and business mix. If necessary change your menus and pricing.

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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. Menu A

Starter

Soup

Main

Dessert

Coffee

Total

Cost (£)

0.95

0.77

2.85

1.43

0.35

6.35

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).

Selling Below Published Prices 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. If a menu containing a chicken supreme main course is costed at £5.75 and sold at £25.00 it will have a 26% cost. The chicken cannot be replaced with beef fillet costing £8.50, because with the same selling price the cost will be 39%.

! 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.

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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. Breakfast midweek Monday to Friday 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.

Using this forecast you will ensure: 1) Presentation is at its best 2) Products do not deteriorate as they are not held under heat lamps 3) Wastage is reduced as you are cooking for consumption ½ hour ahead Do not allow the breakfast Chef to cook everything off prior to service opening.

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Chart.2.

Peaks and troughs should be forecast on a weekly basis and actioned accordingly. Remember 100 people might be attending a conference breakfast and will not dine in the restaurant, or 50 people might be leaving early on a tour bus.

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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 1) Choose a selection of ingredients (shopping basket). 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). 3) Calculate total cost of shopping basket. 4) On the second week do the same again. You now have 2 shopping basket values. 5) These 2 values are then compared to each other in the form of a percentage. 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.

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Example Product

Unit

Value Wk 1 (£)

Value Wk2 (£)

Diff (+/-) (£)

Diff (+/-) (%)

Value Wk3 (£)

Diff (+/-) (£)

Diff (+/-) (%)

Beef Fillet

Kg

9.00

9.25

0.25

2.70

9.15

0.15

1.6

Lamb Fillet

Kg

8.50

8.50

0.00

0.00

8.34

-0.16

-1.9

Tomatoes

Box

13.00

14.50

1.50

11.53

14.75

1.75

13.46

Melons

Each

0.90

1.15

0.25

27.00

0.90

0.00

0.00

Bread

Loaf

0.45

0.45

0.00

0.00

0.45

0.00

0.00

Cheese

Kg

10.45

11.99

1.54

14.73

11.00

0.55

5.2

Potatoes

Kg

0.25

0.35

0.10

40.00

0.30

0.05

20

42.55

46.19

3.64

8.55

44.89

2.34

5.5

Total

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.

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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

Cash Cow

Dodo

Cuddly Panda

Popularity (sales)

Plough Horse

Low

Contribution (margin of profit)

High

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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.

Low Price: Good Value

Sought After Item and Price Does Not Matter

Low Price But Uninteresting

Tempting But Overpriced

Evaluation The Plough Horse Tempting, but overpriced.

The Cash Cow Sought after item, price does not matter.

Maintain value, review costs and portion size.

Warrants further promotion and merchandising with prime menu position.

Careful price increases through enhanced benefits and added value.

Price increases but with caution

Try repackaging and / or linking

The Dodo Low price, but uninteresting.

The Cuddly Panda Low Price, Good Value.

Is this an old product in decline? Can it be revamped?

Re-appraise, research (market, raw material etc.) and try a variety of options.

Is it a new product that needs attention?

Increase promotions, re-style and / or add value.

If both cash contribution and volume remain low, it may be wise to eliminate this product.

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Promotions Promotions should only be undertaken when there is an opportunity to make incremental sales over and above normal business volumes or when you want to drive ‘cash cows’ and ‘cuddly pandas’ to make incremental profits. 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 ‘oneoff 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.

Table d’Hote and Inclusive Menus 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.

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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. Your 30% total should be made up of 12 food costs of differing amounts! 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.

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Ordering, Receiving, Storage, Control and Wastage !

Par Stocks

!

Must Stocks

!

Ordering – The Purchase Cycle

!

Receiving and Goods In

!

Storage

!

Security and Key Control

!

Out of Hours Policy

!

Wastage and Out of Date Stock

This Section Contains KPI’s •

Controlled Ordering Procedure in Place

•

Controlled Receiving and Storage Procedure in Place

•

Recorded Wastage Procedure In Place

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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. All Hilton nominated food suppliers deliver at least twice a week. Food product orders should be based on the forecast of customer consumption. For standard products work out by monitoring consumption over a monthly period and dividing by the number of days. 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) b) c) d) e) f)

Tinned / Dry Frozen Breakfast Goods such as Preserves and Bacon etc Juices Breads 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.

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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. Do not use it up after. Use it at the time! This saves cost! 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.

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Ordering – The Purchase Cycle Aim The process of ordering sufficient food stocks to meet immediate business requirements, ensuring the freshness and quality of all produce and commodities. Nominated Suppliers – •

Use the list of nominated food suppliers as agreed with HUKI Purchasing Department. It is Best Practice that these suppliers must be adhered to when purchasing food products. In many cases two suppliers have been set up for each hotel for a particular food type grouping. It is essential to use price lists from each of these suppliers to obtain the most competitive price for a particular order. Any queries regarding nominated suppliers should be directed to The Food Supply Chain Executive, at Maple Court.

Order Sheets – •

Supplier order sheets should be prepared before ordering with a supplier and kept on file to ensure that deliveries are as requested. Ensure that the agreed price, specification and product code when possible are entered on to the order sheets, as this will help whoever receives goods to check for accuracy of delivery. Use of order sheets will ensure that contents of stores and fridges will be checked, which will lessen the possibility of wastage through over ordering.

•

It is Best Practice that individual supplier order sheets are used.

Supplier Schedule – •

A supplier delivery schedule should be on display in the kitchen at all times to ensure that all kitchen personnel are aware of cut off dates for orders. This will alleviate the need to use local suppliers and petty cash if a cut off point is missed due to holidays or sickness. Try to order as early as possible or give plenty of notice for large orders, as this will lessen the chance of supplier shortage and having to source alternative orders at a premium cost. Do not rely on answer phones for suppliers, as there is no guarantee that your order has been accepted or that product availability has been checked.

Success Criteria a) All orders will fulfill the business requirements. b) All commodities will be the best value for money. 44

c) Purchasing specifications are being adhered to. d) Optimum use of deliveries from each supplier. e) HUKI Group discounts are maximized. f) Continuity of produce standard is maintained.

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Receiving and Goods In Aim All commodities to be delivered at a time, which will facilitate correct checking and monitoring of produce for weight, quality, temperature and quantity against the order and delivery note, to the specifications required. Credit Notes – •

If there is a discrepancy between the goods delivered and the order sheet produced by the Chef then a credit note or goods returned note must be obtained from the delivery company driver. Both parties must sign these.

Delivery notes – •

Must be obtained for every food delivery and entered onto a purchases received sheet in the main kitchen which can be cross matched with all food invoices processed on Oracle by the hotel Accounts Office.

Temperature Checks – •

Temperature checks must be carried out on all chilled products. (See food safety hazard analysis document by Safety Risk Management for minimum standards).

Weights & Measures – •

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. Grade & Quality – •

All deliveries should be checked to ensure that no products are damaged, past their sell by date or of a lower grade than ordered. Any deviations from the delivery note should be recorded on a credit note / goods returned note.

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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 a) Guests receive a continuous high standard of fresh produce. b) Food health and safety regulations are adhered to. c) Suppliers are meeting hotel business demands. d) No leakage of monies due to non-conformity of prices, quantity and quality by suppliers. It is Best Practice that the Head Chef has overall control and is fully responsible for purchasing and stores.

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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 – •

Must be adhered to as set out by the Safety Risk Management department at Cadogan Square, again it is an offence not to temperature check under the Food Safety Act 1990.

Stock Rotation – •

To ensure that food items do not have to be thrown away, storage of all food products should be clear and simple with all new stock put to the back of any storage facility. Older food should be brought to the front to alleviate any unnecessary wastage.

Storage – •

All foods should be stored as recommended by suppliers and in adherence to the guidelines set down by Safety Risk Management department.

•

All foods should be decanted into suitable containers that provide hygienic storage conditions. All open packets should be decanted and sealed in pest proof containers.

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.

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Success Criteria a) Food health & safety regulations are adhered to. b) Minimal wastage and spoilage of food produce.

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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. 4) A formalised method of control of keys should be in place. 5) Keys must be signed in and out. 6) If locks and/or clasps are ill fitting these should be changed or repaired to ensure effective operation. 7) Any items leaving the stores and kitchen to be transferred to other departments must be requisitioned using the appropriate documentation. 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; 1) 2) 3) 4) 5) 6) 7) 8)

Who can purchase food? Who can receive food goods in? Who stores food? Who reconciles invoices to goods in? Who checks wastage? Who authorises returns? Who authorises allowances? Who is authorised to dispose of OLD stock.

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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. A policy needs to be agreed and implemented so as there is control out of hours. It is not good enough to say that ‘the stores are closed’. Our customers do not want to hear this. It should be trained into staff that each and everyone within the Food and Beverage Department should take responsibility for the control of stores. At least 2 people should be present when making out of hours requisitions 1) To check stock issues for quantity. 2) To check stock issues for conformity. 3) To prevent pilferage. People responsible can and should include the following 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.

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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 •

How often am I placing second orders?

•

What food is being thrown away and why?

•

Do my Chef’s know how to carve?

•

Are the restaurant trained in the efficient use of the toaster and coffee machine?

•

Are we cooking properly? (A roast joint sealed properly will not only taste better but the wastage and shrinkage is significantly reduced).

•

Do I regularly review the stores for stock that is either slow moving or will soon be out of date?

•

Do I check expiry dates of goods on receipt?

•

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.

•

On delivery do you check weights? Is a 7oz Chicken Supreme always 7oz or is it 6oz? Therefore forcing you to use more!

•

On delivery do you inspect quality for potential shelf life? Remember if it is not fresh when it comes in, it will not last so long in your stores.

•

It is Best Practice to return inferior quality goods.

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Consider the following table as an aide-memoir to wastage control. Cause

Effect

Cure

Over Buying

Slow Moving Stock Difficulty in Control New Rotations of Stock

Better Planning Par Stocks for Items Decrease Wastage

Under or Panic Buying

Higher Prices

Better Planning

Poor Storage

Quick Deterioration

Containers with Lids Don’t Over Order Correct Storage Temp

Over Portions

Increased Usage Poor Presentation Stock Products

Work to Specs Staff to Understand Weights and Measures Use Measured Dispensers

A key task when looking to control wastage is to look at your most wasted or biggest wasted items. •

Can they be controlled in any way?

•

Can the staff be trained to waste less?

•

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!

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People •

Recruitment and Training

•

Balanced Scorecard

•

Job Sharing and De Skilling

•

Colleague Feeding

This section contains KPI’s •

Colleague feeding meeting Hilton People standard

•

Staff training and knowledge

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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; 1) Has the candidate a good command of the language? 2) Has the candidate a good level of mathematical understanding? 3) Has the candidate potential for management development? 4) Will he / she be able to understand and solve reasonably complex business problems given training? 5) Has the candidate the ability to learn and develop under training? 6) Is the candidate responsible enough to take on responsibility? 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. Once recruited training is the element that binds everything together. It is an essential business need. The more time you expend on the training and development of your team the greater the business success you will achieve. ‘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.

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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 •

People, Customer, Quality, Profit

Each is a key-determining factor within your operation and each must take equal importance within your operation. • •

People – recruit, train and develop

Customer – give quality, value and respect • •

Quality – maintain consistency

Profit – develop, control and reinvest

Job Sharing and De-Skilling Before any recruitment takes place, analyse the requirements of a job. In the current climate we all know that it is difficult to recruit skilled Chefs. However, is it always necessary to recruit skilled Chefs on a full-time basis. 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. Examples of jobs that can be de-skilled are •

Salad Prep and Sandwich Prep

•

Vegetable Prep and Vegetable Cooking

•

And many functions that require basic chopping, cutting and slicing

•

Use the skills of the Chef’s to cook and finish.

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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. Please contact Group Human Resources Department at Maple Court for standards of staff food required and entitlements for all contract types including live-in staff. 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 a) Colleagues are contented with choice and quality. b) Viewpoint result constantly moving forward. c) Minimum cost and wastage achieved. It is Best Practice and the Hilton people standard that colleagues receive as a minimum. •

Breakfast – Cereals, Toast, Tea and Coffee

•

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).

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Revenue Control and Yield Management •

Revenue Control

•

Revenue Capture

•

Reports Schedule

•

Reports Index

•

Covers Definition

•

Nominal Code Definition

•

Food Tracker

•

Stocktaking

•

Table Management and Food Presentation

•

Sharing Information

•

Optimum Food Costing

This section contains KPI’s •

Effective revenue control in place

•

Table Management procedures in place

•

Stocktaking regular and accurate

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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 – •

It is essential that management review all available reports so that business decisions can be based on factual information. Menu choices and planning can be based on actual sales achieved to avoid wastage and spoilage.

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 – •

All items that are used by management or staff should be authorised and tracked so that the Accounts Office can charge to hotel expenses and credit the food stock account.

Allocations – •

These should be in line as per HUKI instructions. Please contact your Regional Director of Finance for up to date standard allocations.

Retrospective Discounts – •

These are credited by HUKI for quantities purchased from nominated food suppliers. These can be checked by the Accounts Office through supplier invoice listings reports produced through Oracle financials.

Allowances – •

All revenue that is allowed off the daily revenue should be documented and authorized by Financial Controller. A running total should be tracked by the Accounts Office so that these can be reviewed in conjunction with the monthly food cost result and help identify any training needs or issues within departments.

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Reports – •

Various Fidelio reports can be printed to help ensure that guest packages are reviewed and can be charged accordingly at different meal periods. There are many Micros reports available to analyze revenue and dish favorites. Please see reports section for a list available.

Guest Key Cards – •

Staff should examine these for every meal period to ensure that the correct charge is raised to the correct guest.

Lost / Leaked Business – •

A cross matching of revenues and covers should be carried out by the kitchen to ensure that numbers charged are the same as numbers that actually dined. This will help identify if all exclusive guests and additional guests are being charged for. A review of actual sales reports against forecasted sales will pinpoint any discrepancies.

Success Criteria a) All HUKI Group discounts are being maximized through nominated food suppliers. b) All revenue is captured and gross profits are maximized. c) Informed decisions can be made from accurate data capture. d) Mystery customer result standards are achieved through correct billing. Wastage and spoilage can be reduced from dishes that are proven sellers All the above revenue control measures are Best Practice

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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.

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Key Responsibilities Below is a table listing employee responsibilities for the EPOS system. Job Title Waiter / Barman

Supervisor

Outlet Manager

Duty Manager

Night Auditor

User Level Server

Supervisory

Management

Management

Management

Definition Able to post and cash off items on the system. At end of shift can only produce a report to enable the balancing of room charges and credit cards. NOT CASH. Able to post and cash off items. Able to void transactions. At end of shift can only produce a report to enable balancing of room charges and credit cards. NOT CASH. Able to post and cash off items. Able to void transactions. At end of shift can produce a report summary to balance all payment types. Able to post and cash off items. Able to void transactions. At end of shift can produce a report summary to balance all payment types. Able to post and cash off items. Able to void transactions. At end of shift can produce a report summary to balance all payment types.

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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.

Meal Plan Reports The Fidelio system produces meal plan reports for the breakfast and dinner service periods. This will highlight which guests are on an inclusive package and those who are not. The restaurant should use this report to tick off each guest who dines in the restaurant to ensure they are charging all non-inclusive guests for their meals. This report should be attached to the restaurant pay-in for breakfast and dinner so that reconciliation can be carried out by the Reception Staff, Night Auditor and Income Auditor so that any possible missed revenue can be posted to the guests room account.

Function / Meeting Charges Function and meeting charging should be treated no differently to charges posted to guest bedrooms. You must ensure that a delegate or organiser is presented with a charge docket if they require an extra pot of tea or coffee. Many hotels do not have their meeting or banqueting department set up as outlets on their EPOS systems so a manual number cheque pad should be used then posted by Reception. To assist in capturing possible lost revenue it is imperative that there is a line of communication between meeting organisers and hotel staff to ensure that any delegates above the contracted numbers are charged for. 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.

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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?

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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 hotel should be using various reporting tools to help: a) b) c) d) e) f) g) h)

Analyse what sells and what does not. Are all prices on system correct and regularly checked. Show what guest entitlements are per meal period. Quick pointer for guest names at meal periods to meet Brand Standards. Reconcile revenues and covers. Look at voided transactions for security. Monitor promotions and allowances. Produce stocktaking results.

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.

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Financial Controller Report Schedule Title Revenue Report Off Line Payments Food Discounts Beverage Discounts Outlet Transfers Micros/Fidelio Balance Revenue Centre Financial Serving Period Financial System Financial Payment Employee Closed Check Report

Frequency Daily Daily Daily Daily Daily Daily Daily Daily Daily Daily Daily

Revenue Report Off Line Payments Food Discounts Beverage Discounts Outlet Transfers

Weekly Weekly Weekly Weekly Weekly

Micros/Fidelio Balance Revenue Centre Financial Serving Period Financial System Financial Report Major Group Cost Report Family Group Cost Report

Weekly Weekly Weekly Weekly Weekly Weekly

Revenue Report Off Line Payments Food Discounts Beverage Discounts Outlet Transfers

Monthly Monthly Monthly Monthly Monthly

Micros/Fidelio Balance Report Revenue Centre Financial Serving Period Financial System Period Financial Major Group Cost Report Family Group Cost Report

Monthly Monthly Monthly Monthly Monthly Monthly

Menu Item Cost Report

Monthly

Content Breakdown of revenue centres Any off line payments used Any discounts given on food Any discounts given on beverage Transfers between revenue centres Revenue balances into Fidelio Total days business by revenue centre As above except by serving period As above consolidated All payments that have been used See how checks are opened/closed Weekly breakdown of revenue centres Weekly summary of any off line payments Weekly summary of any food discounts given Weekly summary of any beverage discounts given Weekly summary of transfers between beverage centres Weekly summary of balances in fidelio Weekly summary business by revenue centre Weekly summary as above except by serving period Weekly summary as above except consolidated Weekly breakdown of sales with attributed costs Weekly breakdown of sales with costs in groups starters, main, sides etc… Monthly breakdown of revenue centres Monthly summary of any off line payments Monthly summary of any food discounts given Monthly summary of any beverage discounts given Monthly summary of any transfers between revenue centres Monthly summary of balances in fidelio Monthly summary and business revenue centre Monthly summary as above except by serving period Monthly summary as above except consolidated Monthly breakdown of sales with attributed costs Monthly breakdown of sales with costs by group e.g. starters/sides/mains Monthly report showing by revenue centre menu item costing

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Chef Report Schedule Title

Frequency

Content

Food Discounts Revenue Centre Financial

Daily Daily

Food Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Weekly Weekly Weekly Weekly

Weekly breakdown of any food discounts Weekly summary of business by revenue centre Weekly breakdown of sales with attributed costs Weekly breakdown of sales with costs in groups e.g. starters/main/sides etc…

Food Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Monthly Monthly Monthly Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given Monthly summary of business by revenue centre Monthly breakdown of sales with attributed costs Monthly breakdown of sales with costs by group e.g. starters/sides/mains etc… Monthly report showing by revenue centre menu item costing

Any discounts given on food Total days business by Revenue centre

Food and Beverage Manager Report Schedule Title

Frequency

Content

Food Discounts Beverage Discounts Revenue Centre Financial

Daily Daily Daily

Food Discounts Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Weekly Weekly Weekly Weekly Weekly

Weekly breakdown of any food discounts given Weekly breakdown of any beverage discounts given Weekly summary of business by revenue centre Weekly breakdown of sales with attributed costs Weekly breakdown of sales with costs in groups e.g. starters/main/sides etc…

Food Discounts Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Monthly Monthly Monthly Monthly Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given Monthly summary of any beverage discounts given Monthly summary of business by revenue centre Monthly breakdown of sales with attributed costs Monthly breakdown of sales with costs by group e.g. starters/sides/mains etc… Monthly report showing by revenue centre menu item costing

Any discounts given on food Any discounts given on beverage Total days business by Revenue centre

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Bars Manager Report Schedule Title

Frequency

Content

Beverage Discounts Revenue Centre Financial

Daily Daily

Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Weekly Weekly Weekly Weekly

Weekly breakdown of any beverage discounts given Weekly summary of business by revenue centre Weekly breakdown of sales with attributed costs Weekly breakdown of sales with costs in groups e.g. starters/main/sides etc…

Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Monthly Monthly Monthly Monthly

Menu Item Cost Report

Monthly

Monthly summary of any beverage discounts given Monthly summary of business by revenue centre Monthly breakdown of sales with attributed costs Monthly breakdown of sales with costs by group e.g. starters/sides/mains etc… Monthly report showing by revenue centre menu item costing

Any discounts given on beverage Total days business by Revenue centre

Restaurant Manager Reports Schedule Title

Frequency

Content

Food Discounts Beverage Discounts Revenue Centre Financial

Daily Daily Daily

Food Discounts Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Weekly Weekly Weekly Weekly Weekly

Weekly breakdown of any food discounts given Weekly breakdown of any beverage discounts given Weekly summary of business by revenue centre Weekly breakdown of sales with attributed costs Weekly breakdown of sales with costs in groups e.g. starters/main/sides etc…

Food Discounts Beverage Discounts Revenue Centre Financial Major Group Cost Report Family Group Cost Report

Monthly Monthly Monthly Monthly Monthly

Menu Item Cost Report

Monthly

Monthly summary of any food discounts given Monthly summary of any beverage discounts given Monthly summary of business by revenue centre Monthly breakdown of sales with attributed costs Monthly breakdown of sales with costs by group e.g. starters/sides/mains etc… Monthly report showing by revenue centre menu item costing

Any discounts given on food Any discounts given on beverage Total days business by Revenue centre

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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

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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

2. 3. 4. 5. 6. 7.

Report Name Revenue Report - System Wide - Major Group OffLine Payments - System Wide Food Discounts - System Wide Beverage Discounts - System Wide Outlet Transfers - System Wide Micros/Fidelio Balance Report - System Wide Revenue Centre Financial Report

8. 9. 10.

Serving Period Financial Report System Financial Report - System Wide Payment Report

1.

To Whom FC/Hotel Micros Project Mgr (MPM) FC FC/Chef/F&B Mgr/Rest. Mgr FC/F&B Mgr/Bars Mgr FC FC/GM/MPM FC/Rest Mgr/Bars Mgr/F&B Mgr/Chef FC FC FC

1. Revenue Report - System Wide This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and Conference and Banqueting). 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 -

2. Offline Payments - System Wide This report shows any offline payments that have been used. 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.

3. Food Discount Report - System Wide This report shows any food 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).

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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).

5. Outlet Transfers - System Wide This report shows any transfers that have been made from one revenue centre to another. 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

6. Micros/Fidelio Balance Report - System Wide This report shows the balance which has been posted into Micros to Fidelio. 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

7. Revenue Centre Financial Report - Revenue Centre Wide This report shows the total business by day for that particular revenue centre. The report is a full breakdown which incorporates net sales, service charge, total revenue, discounts, voids, checks that have begun, transferred in, paid and transferred out. 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.

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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). This information is by serving periods. 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.

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). This information is for the system.

10. Payment Report - System Wide This report shows any payments that have been used. 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)

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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.

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Weekly Reports Report Name

To Whom

1.

Revenue Report - System Wide - Major Group

2. 3. 4. 5. 6. 7.

OffLine Payments - System Wide Food Discounts - System Wide Beverage Discounts - System Wide Outlet Transfers - System Wide Micros/Fidelio Balance Report - System Wide Revenue Centre Financial Report

8. 9. 10.

Serving Period Financial Report System Financial Report - System Wide Major Group Cost Report - Revenue Centre Wide Family Group Cost Report - Revenue Centre Wide

FC/Hotel Micros Project Mgr (MPM) FC FC/Chef/F&B Mgr/Rest. Mgr FC/F&B Mgr/Bars Mgr FC FC/GM/MPM FC/Rest Mgr/Bars Mgr/F&B Mgr/Chef FC FC GM/FC/Chef/F&B Mgr/Bars Mgr/ Rest Mgr GM/FC/Chef/F&B Mgr/Bars Mgr/ Rest Mgr

11.

1. Revenue Report - System Wide This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and Conference and Banqueting). 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

2. Offline Payments - System Wide This report shows any offline payments that have been used. 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)

3. Food Discount Report – System Wide This report shows any food 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).

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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).

5. Outlet Transfers - System Wide This report shows any transfers that have been made from one revenue centre to another. 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

6. Micros/Fidelio Balance Report - System Wide This report shows the balance, which has been posted into Micros to Fidelio. 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

7. Revenue Centre Financial Report - Revenue Centre Wide This report shows the total business by day for that particular revenue centre. The report is a full breakdown, which incorporates net sales, service charge, total revenue, discounts, returns, voids, checks that have begun, transferred in, paid and transferred out. 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.

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). This information is by serving periods

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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). This information is for the system.

The following two reports are additional reports that are pulled off weekly

10. Major Group Cost Report - Revenue Centre Wide This report highlights costs by the major groups (food, beverage, wine, tobacco/miscellaneous) 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.

11. Family Group Cost Report - Revenue Centre Wide The information shown in this report is in an identical format to the major group cost report (10), This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft drinks etc.

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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.

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Monthly Reports Report Name 1.

Revenue Report - System Wide - Major Group

2.

OffLine Payments - System Wide Food Discounts - System Wide Beverage Discounts - System Wide Outlet Transfers - System Wide Micros/Fidelio Balance Report - System Wide Revenue Centre Financial Report

4. 5. 6. 7. 8. 9. 10. 11. 12.

Serving Period Financial Report System Financial Report - System Wide Major Group Cost Report - Revenue Centre Wide Family Group Cost Report - Revenue Centre Wide Menu Item Cost Report - Revenue Centre Wide

To Whom FC/Hotel Micros Project Mgr (MPM) FC FC/Chef/F&B Mgr/Rest. Mgr FC/F&B Mgr/Bars Mgr FC FC/GM/MPM FC/Rest Mgr/Bars Mgr/F&B Mgr/Chef FC FC GM/FC/Chef/Bars Mgr/Rest Mgr/F&B Mgr GM/FC/Chef/Bars Mgr/Rest Mgr/F&B Mgr GM/FC/Chef/Bars Mgr/Rest Mgr/F&B Mgr

1. Revenue Report - System Wide This report shows revenue, by revenue centres (e.g. Restaurant, Bar, Room Service and Conference and Banqueting). 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

2. Offline Payments - System Wide This report shows any offline payments that have been used. 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)

3. Food Discount Report - System Wide This report shows any food 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.

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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.

5. Outlet Transfers - System Wide This report shows any transfers that have been made from one revenue centre to another. 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

6. Micros/Fidelio Balance Report - System Wide This report shows the balance, which has been posted into Micros to Fidelio. 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

7. Revenue Centre Financial Report - Revenue Centre Wide This report shows the total business by day for that particular revenue centre. The report is a full breakdown, which incorporates net sales, service charge, total revenue, discounts, returns, voids, checks that have begun, transferred in, paid and transferred out. 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.

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). This information is by serving periods

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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). This information is for the system.

10. Major Group Cost Report - Revenue Centre Wide This report highlights costs by the major groups (food, beverage, wine, tobacco/miscellaneous) 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.

11. Family Group Cost Report - Revenue Centre Wide The information shown in this report is in an identical format to the major group cost report (10), This is for the family groups within the system e.g. starters, mains, grills, whiskey, soft drinks etc.

The following report is an additional report that is pulled off monthly

12. Menu Item Cost Report - Revenue Centre Wide This report shows by revenue centre a menu item costing for each menu item that is in that particular revenue centre. 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

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Miscellaneous Micros Reports There are a number of miscellaneous reports available in Micros. There is also the opportunity to have other reports programmed for specific needs. Examples of the following reports can be found in the appendix.

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Miscellaneous Reports Report Name A.

Revenue Centre Item Sales Report

B.

Revenue Centre Item Cost Report

C.

System Menu Item Sales Report

D.

Menu Engineering Report

E. F. G.

Employee Closed Check Report Employee Financial Report Time Period Summary

To Whom Chef, GM, FC, Restaurant/Bars Mgr Chef, GM, FC, Restaurant/Bars Mgr Chef, GM, FC, Restaurant/Bars Mgr Chef, GM, FC, Restaurant/Bars Mgr FC, Restaurant/Bars Mgr Restaurant/Bars Mgr Restaurant/Bars Mgr

A. Revenue Centre Item Sales Report B. Revenue Centre Item Cost Report These reports highlight the menu items sold by revenue centre. 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) Price - Selling price of the item 2) Current Qty Sold - Quantity of that particular item that has been sold 3) Current Sales Total - Selling price x the quantity sold 4) Current Qty % - Percentage as a quantity against the total mix 5) Current Sales Mix % - Percentage as a sales figure against the total mix 6) Item Cost - If the costings of the items have been put in the price file in the configuration these will show in this column 7) Current Qty Prep - Quantity of the item that has been prepared by the Kitchen 8) Current Cost Total - Qty prepared x item cost 9) Current Qty % - Percentage as a quantity against the total mix

C. System Menu Item Sales Report This report shows the same information, in the same format as reports 1&2 above. This report is for the whole of the system rather than one particular revenue centre

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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).

E. Employee Closed Check Report This report is one of the most useful and powerful reports in the system. A Financial Controller/Restaurant Manager can see exactly how the checks are being opened/closed by this report. This report is used by the Night Auditor/Supervisor if there are any problems with balancing at the end of shift/night. The Micros Check numbers are shown going down the left hand side of the report. The columns across the report are as follows: (a) Table - Table number which the check was opened to (b) Group - Used when a bill has been split - e.g. if there are two people sharing the bill, there will be a 2/3 in this column (c) Guests - Number of guests/covers on the bill (d) Open/Closed - Date and time the check was opened/closed (e) Prt - How many times the check has been printed (f) Sub Total - Self explanatory (g) Auto SvcChg - should have zeros in this field (we do not use auto service charges) (h) Svc Charge - this is where the waiter would put in a tip payment (I) Payments - the total amount due is shown here together with the payment method

F. Employee Financial Report This report shows the total revenue generated by each employee. This report is useful for Restaurant/Bars Managers when trying to track sales by employees for sales races. The report is a full breakdown, which incorporates net sales, service charge, total revenue, discounts, returns, voids, checks that have begun, transferred in, paid and transferred out. 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.

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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.

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Covers Definition Brand Standard = any person ordering a food menu item including tea and coffee Restaurant 1 Breakfast •

English or Continental breakfast served within the Restaurant up until 11.00 am or EPOS closure whichever is the latest.

Lunch •

Any cover / person served a meal in the restaurant during the period 11.00am until 6.00pm or EPOS closure as above.

Dinner •

Any cover / person served a meal in the restaurant during the period 6.00pm until 11.00pm.

Restaurant 2 / 3 / 4 As Restaurant 1, for breakfast, lunch and dinner. 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 •

Any cover as per breakfast served 11.00 am until 6pm

Dinner •

Any cover as per breakfast served 6.00pm until 11.00pm

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Functions and Banqueting Breakfast •

Any person having food served to them as a restaurant breakfast in a banqueting or conference room 6.00am until 11.00 am. NB. This excludes just tea and coffee.

Lunch •

Any person having food served to them in a banquet room or function related area (ie. Buffets in Lobby’s etc). 11.00am until 6.00pm.

Dinner •

As lunch except between 6.00pm and 11.pm

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 •

Any food served in a guest bedroom from 4.00am until 11.00am

Other Covers •

Any food served in a guest bedroom from 11.00am until 4.00am

Bar 1 Food and nibbles served over the bar counter and charged for i.e. pre packed crisps and snacks.

Other Food Sales •

Any Night Porter food served in public areas excluding guest bedrooms

•

Any outside catering revenue 88

Non-Cover Sales •

Any food consumed on a complimentary basis

•

Aircrew welcome lounges

•

Executive and / or Club Lounges.

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.

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Nominal Code Definitions Food Sales Breakfast •

Food served between the stated opening hours of 6.00am and 11.00am. This includes the value of food supplied with inclusive packages.

•

Food served between the stated opening times of 11.00am and 6.00pm. This includes the value of food served with inclusive packages.

•

Food served between the stated opening times of 6.00pm and 11.00pm. This includes the value of food served with inclusive packages.

Lunch

Dinner

Banqueting Food •

As above per service period.

Banqueting Food Other •

Tea, coffee, nibbles, and canapés served throughout the day.

Room Service Other Revenue •

Food served throughout the day or night except room service breakfast served 4.00am until 11.00am.

•

Food served as per Restaurant lunch and dinner

Bar Food

Other Catering • All Night Porter food (ex room service), all takeaway food and all outside catering.

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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). 3) Un-accrued invoices from previous periods will raise costs. 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. 6) Management and entertainment figures may only be entered monthly. 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. It is Best Practice to use a food tracker system.

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Stocktaking Aim To provide a true and auditable value of monthly assets and to provide data for the calculation of monthly food cost profit. It is Best Practice that a stock valuation is obtained per accounting period. As a 24-hour business it is important that you are flexible in your approach to stocktaking whilst at the same time ensuring accuracy and consistency. 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. The best way to ensure an accurate result is to maintain a consistent approach. Therefore, always count in the same order and count in the same unit sizes relevant to what you are counting. Be methodical. Count in •

¼, ½, ⅓, Whole kilos, jars, tins, bags and boxes etc.

•

Stock should be counted in the same units and given the same value as that stated on the suppliers delivery invoice.

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.

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It is a misconception that the Head Chef has to do all of the stocktaking. The important thing is that you have somebody who 1) Can count and judge weight and value and 2) Who recognizes the goods / product. Stocktaking can be carried out by anyone as long as the above rules are followed. Therefore if a Commis’ is good at mathematics and is methodical there should be no reason as to why he cannot help. This is also an ideal training method to help them understand food costing within the kitchen.

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. Give realistic values to prepared or compound products; Example; •

2 Trays of Dauphinoise potatoes – how many potatoes, how much cream, how much cheese? Give these a value. Or use the standard recipe costing.

•

Fresh fruit salad - How many apples, oranges, pears and pineapples etc?

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? Large stock discrepancies should be noted and investigated. These investigations should be identified to the Head Chef and Financial Controller.

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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. It is Best Practice to have a 7-9 day stock holding of foodstuffs.

Method For Calculating Stock Value Food results sheets are assembled and calculated from actual stock on hand (stock sheets), creditors, credit notes, invoice returns and authorised journals. 1) All brought forward figures to be checked to previous result carried forward / closing figures. 2) Non-invoiced goods (accruals) total to be supported by listing of supplier and amounts outstanding. 3) Purchase figures to agree to appropriate payments returns i.e. statement, invoice returns etc. 4) Closing stock total to be supported by actual stock sheets. 5) Revenue figures to agree to business and reflect sales position for exact stock period excluding VAT. 6) Staff feeding figures to agree to set amount. 7) Stock sheets updated for price change on a weekly basis. 8) All arithmetical accuracy to be checked. Calculations Opening stock value + purchases value – closing stock value = consumption Consumption Food Cost Percentage = ------------------------------------- x 100 Net Revenue ( -Allowances)

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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. 1) All stocks to be taken and calculated at current purchase prices. 2) No estimated values to be included, compound dishes made in house must be broken down by value of their component parts. 3) The total stock valuation must be the figure used on calculation of the trading result. 4) Stocks to be taken by competent persons (see training). Authenticity of stock holdings and valuations to be checked quarterly by Hotel Controller as a standard. Stock count sheets to be kept for a period of 12 months.

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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’. The customer is looking for a) b) c) d) e)

Freshness Colour variation Uniform dish display Attractive but not over garnished Visual variation (height)

•

Understanding when and what your customer expectations are, is the base for managing the experience.

•

Use the ‘little and often’ principle.

•

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.

•

The presentation must be checked by the Senior Chef and Restaurant Manager prior and during service.

•

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.

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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 •

Should be produced in batches of no more that 20-25 portions for peak times. The recipe in the breakfast specifications manual should be followed. This will not only ensure that the product looks and tastes good but also that wastage is reduced.

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.

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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 As already mentioned in forecasting and planning will be busy on nights when there are popular sporting events on the television. Using the micros room service menu analysis you will be able to predict those nights and sales mix.

Food Production Remembering these principles will ensure efficient food production. •

Always use a standardised production method.

•

Recipes must always be costed, and updated regularly.

•

Use only seasonally available commodities.

•

Always use existing nominated supplier base.

•

Look for value for money ingredients. Look for ingredients that you can get consistently.

•

Take into account pack size, yield and shelf life.

•

The product if used should be able to be reproduced in volume.

•

Preparation and production time for dishes needs to be consistent.

•

Customer expectations are met and exceeded by the specifications, quality, production and presentation.

•

Products should be scoped so that substitutions can be made, should availability problems occur. 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. It is the responsibility of the Accounts Office to supply the General / Hotel Manager and all of the Management Team with daily accurate information giving details of revenue, covers and average spends. All information produced and issued daily by the Accounts Office should mirror any revenue or statistical reports that can be produced from Oracle. !

Without accurate information it is impossible to successfully manage a hotel or department.

!

Without accurate information we cannot measure success or failure against targets.

!

Without accurate information we cannot forecast business trends or plan for the future.

!

Without accurate information we cannot judge individual or team performance.

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Information Table Below is an example of the various information that should be shared to manage food cost profitability. Report Type

Use

Daily Food Supplier Usage.

Track monthly cumulative expenditure.

Daily Food Cost Tracker.

Track monthly cumulative food cost %.

Daily Revenue, Covers & Average Spend by Department.

To ensure covers and revenue match forecast and match dishes served from kitchen.

Monthly General Ledger Report For The Food Cost of Sale Account (294-31001).

To ensure all suppliers on report are food 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.

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Optimum Food Costing This can be simply defined as follows; ‘The minimum cost of product used to serve a meal to a specified standard as a percentage of maximum achievable sales revenue’. This definition is of course not as simple as is sounds. We have seen throughout this manual that a number of factors exist that we must take into consideration. However, optimum food costing can be worked towards by implementation, regular review and training of this manual. All sections contribute towards optimizing food cost and although some sections are small, all are as equally important to Best Practice management.

Calculating Optimum Food Cost 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; • • • • •

Food cost for buffet restaurant based on the AFCE. Food cost for restaurant a la carte based on menu costing and sales mix. Food cost for Room Service based on menu costing and sales mix. Food cost for banqueting based on banqueting menu cost and selling price tracker sheet. Food costs for any other outlet based on menu costing and sales mix

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.

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Example Hotel Optimum Food Cost Calculation Sales (£)

FC (£)

FC (%)

Buffet

10000

3500

35

A la carte

2000

600

30

Room Service

2000

800

40

Bar/Lounge

2000

500

25

Restaurant 2

3000

1140

38

Banqueting

20000

3600

18

Total

36000

10140

26

The cost values are calculated from the menu cost sales mix analysis, AFCE’s and Banqueting menu sales / cost matrix tracker. It is Best Practice to calculate optimum food cost as part of month end calculations.

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Appendices Charts and Food Cost Calculations •

FC001

Food Expenditure Tracker

•

FC002

Food Suppliers Goods Received

•

FC003

Suppliers Order Form

•

FC004

Hotel Audit Checklist

•

FC005

Outlet Manager Questionnaire

•

FC006

Quick Calculation Table

•

FC007

Menu Costing Sheet

•

FC008

Revenue Deductions

•

Conversion Formulae

•

Conversion Tables

•

List of Nominated Food Suppliers (at October 2002)

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Conversion Tables Exact Formulae –Dry Goods •

Ounces to Grams – Multiply by 28.35

•

Grams to Ounces – Multiply by 0.0352

•

Pounds to Kilograms – Multiply by 0.4536

•

Kilograms to Pounds – Multiply by 2.20262

Exact Formulae - Liquid •

Fluid Ounces to Millilitres – Multiply by 28.4

•

Millilitres to Fluid Ounces – Divide by 28.4

•

Pints to Litres – Multiply by 0.568

•

Litres to Pints – Divide by 0.568

Workable Equivalents Ounces / Fluid Ounces

Gram / Millilitres

½

10

1

25

2

50

3

75

4

100

5

125

10

250

15

375

20

500

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Conversion Formulae To Calculate Selling Price on known GP% •

Cost Price x 100 / Known Cost % = Net Selling Price

To Add VAT •

Net Selling Price x 1.175

To Find Food Cost % •

Cost Price / Selling Price x 100 = % Cost

To Find Food Profit % •

Cash Profit / Selling Price x 100 = % Profit

To Find (Take Off) Vat Element •

Selling Price / 1.175 = Net Price

Example Cost Price

= £1.45

= 29%

Cash Profit

= £3.55

= 71%

Selling Price = £5.00 Net Selling Price = £5.75 Inc Vat

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