“We’re always looking to give our fans more ways to enjoy the classic menu items they know and love,” McDonald’s said of the addition of the new Big Mac, according to Fox 6. 

The sandwich will include two tempura chicken patties, pickles, shredded lettuce, and American cheese, a combination the company said was a huge success when it was rolled out to customers in the UK.

The Chicken Big Mac comes amid a fast food feud that has been dubbed the “Chicken Sandwich Wars,” which have intensified since Popeyes introduced its popular chicken sandwich in 2019. Other chains have followed the trend, with McDonald’s, Burger King, and Wendy’s introducing new sandwiches meant to compete with Popeyes and Chick-fil-A.

“Chicken continues to be a significant opportunity for us… We’ve got some great global equities already in our McNuggets and with McChicken, but we also have some equities in McCrispy and McSpicy that we think we’ve got an opportunity to do more with globally. So that’s going to be a priority area,” McDonald’s CEO Chris  Kempczinski said in a Q2 earnings call.

The Chicken Big Mac includes two chicken patties, pickles, shredded lettuce, and American cheese. Getty Images/ Paul J. Richardson
Coming out of the pandemic, expectations, and technology are shifting . . . .

What Date-Night Guests Now Demand of Restaurants

If, at this stage in the industry’s COVID rebound, there is a dichotomy forming between experiential brands and those rooted in convenience, then “date night” falls squarely into the occasion wishlist of full-service operators.

Yet with prices climbing and safety concerns lingering, diners are returning to sit-down concepts with an elevated set of expectations. As checks rise and frequency tightens, the margin for error does as well. Experience and retention platform SevenRooms on Thursday released a “Date Night Diner Report” through research from YouGov and its own data. The goal is to paint a portrait of the current American date night, as well as the turn-offs and dealbreakers that could cost a restaurant a future loyal guest.

“Our research reveals that diners value experiences, additional perks, and service points at different levels than ever before,” SevenRooms CEO Joel Montaniel noted.

To take stock of the landscape, the company asked customers what they want on date nights.

26 percent: Preferred day of the week: Friday and Saturday

53 percent: The preferred style of date: one-one-one.

In big metros like New York City and L.A., tables for two are the most popular party size booked, at 50 and 56 percent, respectively.

Concerning the restaurant they pick:

46 percent: Usually book a restaurant they’ve been to before. But, they could be convinced to go elsewhere.

54 percent: Typically book a casual meal where they can stay and talk at the table for a while.

None of this is overly surprising. In fact, it suggests people are returning to a world they’re familiar with. The parameters of date night in America have not been rattled by COVID—it’s the expectations we need to get into.

Also, in recent months, SevenRooms said, diners have found it more challenging to secure prime tables at their go-to’s. They now use a variety of ways to get in.

53 percent: Customers who go on dates who say they do not make a reservation, but still go to the restaurant.

Walk-in diners and digital waitlists have become more prevalent for date-night planning:

47 percent: Of all completed covers at NYC restaurants were walk-ins, a 5 percent increase from June.

25 percent: Of all completed covers at L.A. spots were walk-ins, a 5 percent jump as well.

“Whether a guest is booking an online reservation, adding themselves to a digital waitlist, or coming into a restaurant to join a waitlist before popping into a wine bar around the corner to wait, technology has made it easy for restaurants to show guests an experience that will keep them coming back,” SevenRooms said.

So moving to dealbreakers, here’s what would turn a customer away from a restaurant for a future date:

Their meals arrived at different times (more than 10–15 minutes apart): 45 percent

The restaurant was louder than expected and they couldn’t have a conversation: 43 percent

The restaurant ran out of menu items they were looking forward to 31 percent

They were seated too close to another table: 31 percent

They were seated next to a couple talking too loudly: 26 percent

The restaurant was too crowded to find their date: 24 percent

All told, though, what SevenRooms data showed was, arguably, that the experience upon arrival is more critical than detractors. The top three experiences or amenities date-night guests said they want available to them were:

33 percent: being provided a complimentary dessert or cocktail

24 percent: Earning extra rewards during the meal, like loyalty, credit card points, or exclusive offers.

23 percent: Incentives to return for another date night, such as discounts and an exclusive date night menu.

Date-night diners added they’re keen on personalization, including menu items that are in line with their dietary needs or preferences, and that the waiter or staff knows their name from a previous visit.

33 percent: Said personalized dining mattered more to them than getting food quickly, menu variety, etc.

43 percent: Noted they’d be impressed if their date booked a personalized restaurant experience for them.

“A resurgence of the American date night is here, and these date night diners are flipping the script on what that experience should look and feel like,” Allison Page, co-founder, and chief product officer at SevenRooms, said in a statement. “Our research reveals that diners value experiences, additional perks, and service points at higher levels than ever before. To provide these experiences, restaurant operators should look to incorporate technology solutions that provide them with the data and information to tailor experiences to each guest’s specific preferences. By doing so, they’ll not only learn how to best cater to each couple but also how to avoid date-night dealbreakers to create the perfect night out.” – Source: FSR.

McDonald’s board is gaining three new members and losing one longtime director . . . .

McDonald’s Board Adds Three new Directors in Shake-up

Sheila Penrose will retire Sept. 30 after 16 years on the board and surviving Carl Icahn’s proxy fight.

The new board additions include Marriott International CEO Tony Capuano and Salesforce CFO Amy Weaver.

McDonald’s board is gaining three new members and losing one longtime director.

Sheila Penrose, who leads the board’s sustainability and corporate responsibility committee, will retire on Sept. 30 after 16 years on the fast-food giant’s board. Earlier this year, billionaire Carl Icahn targeted her seat in his unsuccessful proxy fight with McDonald’s over animal welfare, but she handily survived the challenge.

In a statement Monday, Enrique Hernandez Jr., chairman of McDonald’s board, praised Penrose for overseeing the company’s progress on its climate, responsible sourcing, and diversity, equity, and inclusion targets.

The board elected three new members: Tony Capuano, Jennifer Taubert, and Amy Weaver, who will take their seats on Oct. 1. The shake-up brings the total number of directors to 14 and doubles the number of female members.

Capuano is CEO of Marriott International, a position that has given him experience working with franchisees. He’s also a member of the Business Roundtable.

Weaver has been a chief financial officer of Salesforce since 2021. Before that role, she served as the company’s chief legal officer. McDonald’s highlighted her digital experience as well, with her previous work at Expedia.

Jennifer Taubert, worldwide chairman of pharmaceuticals at Johnson & Johnson, listens during a Senate Finance Committee hearing on drug pricing on Capitol Hill in Washington, D.C., the U.S., on Tuesday, Feb. 26, 2019.

Taubert serves as executive vice president and worldwide chairman of pharmaceuticals for Johnson & Johnson. Before working at Johnson & Johnson, she was employed at rival pharmaceutical giants Merck and Allergan. – Source: CNBC.

Now under new CEO Kevin Hochman, the causal chain is making it a point to cut discounting . . . .

Chili’s Has an Aggressive, Multi-Layered Plan to Build Margins

Kevin Hochman, named CEO of Brinker International in May, knew he entered a strong foundation, with brands that have stood the test of time.

Fourth quarter results explain his high praise. Chili’s experienced a 0.3 percent same-store sales bump (8.6 percent on a two-year basis). Average weekly sales per unit were $59,500 ($3.1 million annualized AUV), compared to $56,900 in Q4 2019. Maggiano’s saw a 30.1 percent comps lift (10.3 percent on a two-year basis), and average weekly sales of $163,600 ($8.5 million annualized AUV), versus $152,400.

But Hochman didn’t join the team for the status quo. The CEO spent his first few months in the field learning from restaurant teams about immediate challenges.

“We’re working quickly to identify the things we can do to grow the business sustainably, improve the guest experience, reduce cost and complexity, and implement more strategic pricing, which will, in turn, expand restaurant margins and grow profits,” Hochman said during the company’s Q4 earnings call.

There is clearly room to get better. Traffic was negative at Chili’s in Q4 as guests reacted to the inflationary environment. The brand experienced a 1 percent negative sales impact from understaffed locations not fully opening dining rooms at peak times and throttling back online orders. Traffic has shown sequential increases into August, although it’s still in the mid-single-digit negative range. Off-premises held at 34 percent, as dining rooms saw positive sales and traffic.

Restaurant operating margin in Q4 was 10.3 percent, but Hochman thinks mid-teens is achievable. He doesn’t have a timeline of when that may happen, but there is a path in place. The CEO created two teams of senior executives, one dedicated to identifying sales opportunities, and the other focused on simplifying operations.

CHILI’S

Chili’s wants to showcase its value, like the $10.99 3 for Me Deal that comes with a drink, appetizer, and entrée. 

Growing comps starts with reimagining the menu. Chili’s will lean into a barbell strategy that provides everyday value to low-income customers and uses food and beverage innovation to mitigate trade-down from higher-paying guests. Hochman is looking to drive traffic, but without deep discounting and giving away as much free food through the rewards program. The CEO said 37 percent of items are moving at a discount, which he referred to as “simply too high.”

Hochman believes the chain has competitive value, like its 3 for Me deal featuring an appetizer, entrée, and a drink starting at $10.99, and a $9 lunch combo. But he added that Chili’s must do better at promoting these offerings. The brand is in the process of reinvesting marketing dollars from My Chili’s Rewards comped meals into advertising everyday value.

“I think there are some things I can bring from my [quick-service restaurant] days that I think can help the business,” said Hochman, who previously led KFC and Pizza Hut. “I think more strategic pricing. I think [quick-service] does an exceptional job of understanding how we make sure that the great value that we offer is advertised and drives traffic. … One of the lessons in [quick-service]—if you’re going to have great value, you have to make sure you talk about it. Quite frankly, it’s been a little bit invisible in our business the last few years, and we need to get back on air once we’re ready to do that.” To simplify operations and reduce costs, Brinker is looking to cut low-mixing items, redundant pantry SKUs, unnecessary dishware, and unneeded processes that don’t help the customer. Less complexity should help with poor retention, which is leading to higher-than-normal training expenses and the use of overtime. When Hochman spoke with operators, he learned that it’s become more difficult to work inside a Chili’s. He used the example of portioning proteins, like counting shrimp or measuring brisket. One hour of prep per restaurant equates to the company paying 46 years’ worth of labor annually.

Hochman recalled a team member suggesting that instead of counting all shrimp prior to opening, employees simply grab the necessary number when the dish is ordered.

“That seems pretty logical and something that we could immediately do,” the executive said. “And probably there was a time where we put in  proteins and we were really worried about the waste on them. And labor rates weren’t where they were, so they might have been good decisions 15 years ago. But today, in a world where wage rates are where they are and turnover rates are where they are, that’s not the most fun task to do. Why don’t we get rid of that and save millions of dollars in terms of labor that can either be redeployed back into the restaurant or potentially to the bottom line?”

CHILI’S

Chili’s is suspending its robotics testing.

Change is also coming for virtual brands It’s Just Wings and Maggiano’s Italian Classics. The two mixes 6 percent and Hochman want to make sure attention toward these concepts matches up with the level of sales they’re bringing in. For instance, Maggiano’s Italian Classics has 26 unique SKUs to service 2 percent of the business. Hochman said the brand could delete more than half of those SKUs and still retain most of the sales mix. For It’s Just Wings, it’s not as much about simplification since the brand was designed to fit well within the kitchen. It’s more about removing items with low sales volume and working to build capacity during the dinner daypart.

Additionally, Brinker will take more pricing on virtual brands since most of the sales go out for delivery—a customer base that values convenience and is not as impacted by price increases. To grow the concepts, the company will bring It’s Just Wings flavors and curly fries to the core Chili’s menu and place the casual chain’s chicken crispers onto the It’s Just Wings menu for more variety.

When it comes to technological initiatives, the leadership team made decisions on whether to accelerate projects or stop them, based on the ability to impact sales and the probability of success. As a result, Chili’s suspended its test of  “Rita the Robot”—a self-functioning machine that could play host, waiter, and busser. However, the company will accelerate what it calls “Kitchen of the Future 3,” or equipment that improves the speed of service and table turns. Chili’s is also testing technology that would enable guests to seat, order, and pay on their own, and it’s working to enhance its mobile site interface for off-premises customers.

“We’re going to stop some of those projects that we just didn’t have a line of sight to a return on the business, but we’re going to double down and accelerate the ones that we think will have a more meaningful impact on restaurant margins and a quicker impact on our business,” Hochman said.

Brinker’s food and beverage costs were unfavorable by 310 basis points compared to last year, driven by close to 15 percent commodity inflation. Every category was negatively impacted, with poultry seeing the biggest year-over-year increase. That especially hurts the company, since chicken mixes 52 percent across menus. But the chain is starting to see cost reductions.

Labor was unfavorable by 70 basis points year-over-year, fueled by a 6-7 percent rise in wage rates.

Chili’s expects to exit Q1 at 8 percent pricing, and that should remain the same throughout fiscal 2023. Maggiano’s will carry pricing of mid-5 percent, and that’s projected to reach closer to 7 percent for the entire year.

Chili’s ended its 2022 fiscal year with 1,596 restaurants systemwide, including 1,232 domestically and 364 internationally. Maggiano’s completed the year with 54 locations, 52 of which are in the U.S.

In fiscal 2023, Brinker is anticipating revenue of $3.9-$4 billion, capital expenditures of $155-$165 million, and the opening of 19 locations. – Source: FSR.

The First Sports & Social DraftKings Venue to Open in Troy, Michigan

DraftKings Inc. and Live! Hospitality & Entertainment announced today that the country’s first Sports & Social DraftKings venue is slated to open this fall at Somerset Collection, Michigan’s exclusive luxury shopping destination located in Metro Detroit. In July 2021, DraftKings and Sports & Social announced a strategic relationship to create a unique food, beverage, and entertainment experience for its customers. The collaboration will bring together Live! Hospitality & Entertainment’s market leadership in operating high-energy, first-class dining and entertainment venues with DraftKings’ industry-leading sports gaming platforms.

“We are thrilled to debut the first-ever Sports & Social DraftKings and offer customers in Michigan our innovative mobile sportsbook app with an exciting in-person experience,” says Michael Kibort, Sr. Director, Retail Sportsbooks at DraftKings. “Thanks to the strong support of Live! Hospitality & Entertainment, we believe we have created a premier dining, sports, and entertainment destination for fans to enjoy.”

Sports & Social DraftKings will offer a premier live sports viewing and wagering experience with its state-of-the-art 32-foot LED media wall and premier gameday watch parties. Guests will be able to access DraftKings’ user-friendly mobile platforms to play daily fantasy sports and wager on sports from their mobile devices across various sports, including football, basketball, baseball, golf, MMA, soccer, tennis, and more while watching multiple games live.

The venue also will offer an elevated menu that features made-from-scratch gameday favorites, curated cocktails, specialty drinks, including its signature Crush selection, and a variety of beers from national brews to local favorites. Customers will be able to enjoy special food and beverage-focused events throughout the week, including a brunch experience on Saturdays and Sundays with the venue’s famous #brunchtails table drinks and menu favorites like Chicken & Bliss, avocado toast, and savory breakfast skillets.

“DraftKings is an industry leader in sports and entertainment, and we are incredibly excited to be working with them on this new collaboration for Sports & Social,” states Reed Cordish, Principal of The Cordish Companies and CEO of Live! Hospitality & Entertainment. “We are creating a new standard for dining and sports entertainment with Sports & Social DraftKings that is unmatched.”

The 10,400 square-foot space, located in the stand-alone building adjacent to Somerset Collection South, will include an exclusive DraftKings Lounge that can be utilized for private parties and events, as well as a dog-friendly outdoor patio that will provide an enjoyable setting for al fresco dining, live music and socializing with family and friends. The venue also will offer live music and entertainment multiple days a week, as well as a wide variety of social games, such as skeeball, hoops, Beirut, foosball, shufflepuck, and arcade games.

“We are honored that Sports & Social DraftKings has chosen to establish its first U.S. location at Somerset Collection,” says Nate Forbes, Managing Partner of The Forbes Company. “Our guests travel from across Michigan, the Midwest and Canada to experience many brands that are exclusive to Somerset Collection, and we are thrilled that this venue will give them another reason to make this region a destination.”

Sports & Social DraftKings venues are currently being designed by ICRAVE, an internationally acclaimed award-winning strategy, design, and development firm, and promise to fill a niche by providing upscale, premier sports and entertainment experience. Additional locations of Sports & Social DraftKings are expected to be announced in the coming months. – Source: FSR.

Restaurant owners should view today’s inflationary environment as an opportunity to pause . . . .

How AI Can Help Restaurants Reduce Costs, Fight Inflation

When costs go up, restaurants have to look for creative ways to reduce their spending and maintain healthy profit margins. Squeezed by inflationary pressures on both food and labor costs, some restaurant managers are succumbing to sneaking hidden fees—ranging from fuel to kitchen appreciation surcharges—into customer receipts.

But today’s savvy restaurant management teams aren’t risking hard-earned customer goodwill with nickel-and-dime fees. Instead, they’re adopting tools rooted in artificial intelligence to better control their operating costs, undertaking initiatives that will continue to pay benefits no matter how economic conditions unfold.

“Temporary” fees have a way of becoming permanent, and customers often view surcharges as a disingenuous way to raise prices. Instead of looking for a quick fix, sophisticated restaurant owners and management teams pay close attention to every operating cost. Costs that never got a second look in the past often provide opportunities for savings and improved margins. In many instances, the tools of artificial intelligence deliver significant savings.

Intelligent equipment maintenance

Take, for example, the repair and maintenance of kitchen equipment, a $28 billion annual expense industry-wide. Equipment downtime adds another $46 billion in annual lost revenue. According to ResQ’s 2022 State of Disrepair report, on-demand repairs of refrigeration and kitchen equipment top the list of full-service restaurants’ annual spending on service.

For years, restaurants have been relying on the accumulated expertise of veteran repair technicians to find and solve equipment problems. If service personnel didn’t have much experience, the restaurant paid for the technicians’ “education” through inevitable costs when out-of-service equipment caused kitchen downtime.

Service Intelligence is a new AI-powered technology, however, that puts the accumulated expertise of technicians who specialize in commercial kitchens into the palm of even the most novice technician.

Data stored in the smartphone app walks a technician step-by-step through the diagnosis and solution of all sorts of problems on both cold-line and hot-line appliances. With all that experience available to them, technicians are able to get to the root of the problem, order the parts they need, and get the kitchen equipment back into operation as soon as possible.

AI and data-driven maintenance push repair companies toward the ultimate cost-saving goal: providing true prescriptive maintenance. Prescriptive maintenance is a concept that collects and analyzes data about an equipment’s condition to come up with specialized recommendations and corresponding outcomes to reduce operational risks. The purpose is to resolve issues before they become a problem while promising cost savings over routine or “time-based” preventive maintenance because tasks are performed only when warranted. When companies have data across the lifetime of a machine, they will be able to fix problems before they even happen, causing no machine downtime and saving restaurants more money in the long run.

The savings are subtle but real: Kitchen equipment is better maintained and operates more efficiently. Problems that take equipment out of service can be resolved more quickly, reducing the hassles and costs of appliances that aren’t working. Service technicians spend less time on fixes and do it right the first time.

AI for inventory, menu plans

The possibilities of cost savings through the application of artificial intelligence extend throughout restaurant operations. AI-enabled software can be integrated, for instance, with the restaurant’s point-of-sale system. By analyzing historical inventory, purchasing data, and recent customer buying trends, the software makes recommendations that ensure just the right amount of ingredients are purchased. Elimination of wasted purchasing makes a substantial contribution to operating margins.

Other management teams use AI-driven tools to create menus designed to maximize profits.  The software helps determine the precise cost of each menu item, then gathers data about the popularity of each dish. The resulting comparison allows restaurant owners and managers to recognize the stars of their menus—the items customers love, but don’t cost much to make—as well as dishes that are both costly and slow sellers.

With that data, menus can be redesigned to spotlight high-margin items—a move that can add 10 to 15 percent in profitability. Slow sellers can be eliminated, saving the costs associated with the inventories and labor necessary to produce them.

Staff recruitment that works

AI tools also help resolve the staffing issues that continue to bedevil restaurants. By one recent estimate, industry-wide turnover in restaurants runs as high as 75 percent a year. Every time a back-of-house employee resigns, the restaurant loses the employee’s skills, accumulated knowledge, and contributions to the team’s culture. When front-of-the-house staff leaves, customer service declines as the existing staff are stretched thinner and new staff members learn the ropes. Customer relationships suffer as well.

Recruitment tools based on AI aid in finding potential new hires through steps such as allowing candidates to submit resumes by text. AI-based tools evaluate candidates and identify those who are a good fit, reducing the amount of time hiring managers need to spend reviewing applications. Other software analyzes historic and recent trends to create cost-efficient staff scheduling that allows the restaurant to meet customer-service standards.

Better candidates will lead to better hires. Better hires, in turn, are more likely to become skilled and efficient long-term employees. Better scheduling reduces wasted payroll dollars and provides greater satisfaction for staff members. Cost savings may be subtle at first, but streamlined HR operations will make a significant impact on cost savings over time.

Restaurant owners should view today’s inflationary environment as an opportunity to pause and take a closer look at their operating costs to identify areas to reduce spending. Restaurant management teams who find ways to use AI technology to tighten their costs rather than imposing new fees will be well-positioned to maintain the loyalty of existing customers and attract new diners. Source: FSR.

The right deal at the right time . . . .

How Restaurants Can Use Incentive Marketing to Inspire Engagement

Recent data found that over the past year, the price of full-service restaurant meals rose 9 percent and the price of limited-service meals rose 7.3 percent. It’s no surprise, as restaurants continue to reel from supply chain issues, talent shortages, and rising operating costs.

Soon enough, rising restaurant prices will reach a ‘tipping point where menu prices outweigh value received, causing a decline in consumer demand. Consumers are already changing purchasing behaviors by eating out less, ordering fewer items, or cooking at home more often.

To combat the negative impacts of a guest tipping point, restaurants must adapt to the moment by using smart targeting strategies and incentive marketing to stay top of mind.

Incentive Marketing & Direct Mail

The right deal at the right time will often be the defining factor in where consumers choose to eat or to eat out at all. By using direct mail to deliver incentives directly to a consumer’s mailbox, brands can increase brand awareness, customer acquisition, and loyalty.

Direct mail reaches across generations, including millennials. In fact, recent research from Vericast’s 2021 Restaurant Report revealed that 72 percent of millennials regularly read or look at ads they receive in the mail.

Beyond just brand awareness, direct mail also influences purchasing decisions. The same study mentioned above found that for over half of consumers, direct mail encourages them to visit a restaurant or order delivery.

An Omnichannel Approach

Incentive marketing using direct mail is most impactful when part of a larger omnichannel strategy. For example, brands can use direct mail to point consumers to an app or website to get more information or a personalized offer. Omnichannel shoppers have a 30 percent higher lifetime value than those who shop using only one channel.

Further, as digital platforms like Connected TV (CTV) and social media continue to grow in popularity and consumption, restaurants should consider the use of these channels to further amplify, tailor, and localize messaging.

Take Advantage of Mega Pay Weeks

During times of inflation when consumers have less purchasing power, another strategy restaurants can use is targeting marketing initiatives for weeks when most Americans receive a paycheck.

According to IHS Markit payroll tracking data, there are four upcoming 2022 “mega pay dates” in which paychecks and benefit payments will happen simultaneously, meaning more Americans are getting paid on the same dates: September 2, September 30, December 2, and December 30. At Vericast, we have seen firsthand that businesses benefit greatly from running ads during mega pay dates, and volumes during these weeks are some of the highest of the year.

Targeting communication before, during, and after these key dates can help brands drive incremental traffic at a time when there is more discretionary income in the market.

Build Loyalty Through Offers

While the financial crunch is real, restaurants can still inspire action through incentive marketing, an omnichannel approach, and strategic communication around mega-pay weeks. These approaches will not only influence consumers to action through deals but will help brands be top of mind when individuals are most likely to spend.

Rob Crews is the Director of Restaurant Industry Strategy for Vericast. In this role, he analyzes industry data and identifies opportunities to help clients drive profitable sales using Vericast’s proprietary tech stack.  Prior to joining Vericast, Rob spent most of his career in restaurant marketing as a Chief Marketing Officer working for national brands such as Wendy’s, Arby’s, Church’s Chicken, LongHorn Steakhouse/The Capital Grille, Ryan’s/Old Country Buffet, and Applebee’s. Rob holds an IDM Award in Mobile Marketing from the Institute of Direct and Digital Marketing in the United Kingdom and a Bachelor of Science with Honors in Economics and an MBA in Marketing from the University of Iowa. He lives in Atlanta with his wife and children.

Source: FSR.

Theoretical Food Costing & Menu Engineering Tips for Full-Service Restaurants

As inflation and global food costs remain high or unsteady, now, more than ever, restaurant owners must be intentional with their menus and profitability to be successful. Some operators are looking into simplifying menus, while others are experimenting with alternative ingredients (e.g., light vs dark meat, vegetarian vs meat, etc.,) to save money. Proper tracking of menu items is critical in today’s market, as it allows restaurants to make better purchasing decisions, analyze trends, track differentiating food prices, and more.

Two strategies that many full-service restaurants have started utilizing to combat the rising cost of goods and shrinking margins are menu engineering and theoretical food costing. So, what are menu engineering and theoretical food costing?

Menu Engineering

Menu engineering is a tactic designed to increase the maximum profit per guest by optimizing menus via restaurant data points, menu analysis, and strategic design optimization.

Menu engineering allows restaurants to:

Control costs easier

Identify higher-profiting menu items

Eliminate poor-performing menu items

Develop an ongoing menu analysis system to continue analysis and optimizations moving forward

Highlight and showcase popular and profitable menu items through visual design elements & more

Theoretical Food Costing

Theoretical food costing, on the other hand, is what your restaurant’s food costs should be based on the costs of ingredients and meals sold—assuming no waste, breakage, or shrinkage. By pivoting from simple basic food cost calculations to more complex reporting, such as actual vs theoretical food costs (AvT), operators can determine what costs should have been vs. what they actually were given a specific time period. This allows restaurants to more efficiently analyze their financial status and have more control over their food costs with more data.

Best practices for theoretical food costing and menu engineering

Analyze Your Popularity vs Profitability Matrix

The first step in menu engineering is to identify your menu items in the popularity vs. profitability matrix. The matrix has four quadrants for categorizing each menu item, which is referred to in the industry as a plow horse, star, dog, and puzzle. These quadrants categorize how profitable vs. how popular each individual item on the menu is.

Here’s an example of how a basic menu matrix is structured:

Design Engineering

Once your menu is solidified, another step to engineering your menu is to focus on design cues. Showcase your star items and draw attention to your top menu items. By adding a layer of visual focus to your menus, you can help attract customers to top products that add revenue and increase margins in your restaurants.

Use data and technology for accuracy and transparency

In the past, many restaurants viewed menu engineering and food costing as intuitive or gut instinct-type tasks. Others have historically managed their reporting via spreadsheets. These methods, however, are error-prone, inaccurate, and can be especially difficult for restaurants with large menus.

Restaurant technology streamlines the menu engineering process to make quick, easy, accurate assessments and refinements of your menu. For example, using a theoretical recipe tool, you can adjust portions or ingredients of an individual menu item to see how that affects your product margins. Simultaneously, by being able to view accurate purchasing, pricing, inventory, and food waste data, you can optimize your menus for your restaurants with the ability to see and consider more precise data.

Determine individual plate costs

Another advantage to using technology is generating the final costs of individual recipes. Recipe costing can be difficult to do manually or with spreadsheets as food costs are often in flux and recipes evolve. Tech solutions help operators easily assess, change, and understand individual plates and recipes.

Better data with fluctuating prices

By knowing the real-time data of your best and worst-selling items, plate costs, and food costs, you can make more informed decisions on which items to keep, change, or eliminate to reduce costs and boost profits.

Optimize inefficiencies and save

Armed with valuable data, work to identify, and improve inefficiencies. For example, if food spoilage is a problem, look at your inventory management process to evaluate historical sales data to see what you need for a given shift. Or, if over-portioning is an issue, look into a recipe management system to help maintain smaller portions and eliminate waste. This data allows you to identify and optimize inefficiencies easily.

Multiple factors influence your cost of goods and profit margins. By utilizing technology that allows for real-time pricing updates, changes, and fluctuations, you can make sure your restaurant reporting is accurate in real-time and driven by your restaurants’ specific data points across locations or regions. This allows you to change, subtract, or add menu items to increase your profit margins based on the data unique to your restaurants.

Human error and outdated systems make it difficult for restaurants to accurately predict or increase their profit margins. By utilizing a restaurant technology platform, restaurants can quickly and easily see inefficiencies and ways to save. This way, you can spend less time calculating price fluctuations, food costs, and other variables and maximize your profit margins.

Greg Staley is the CEO of SynergySuite, a back-of-house restaurant management platform. Greg focuses on facilitating better visibility and increased profitability for restaurant chains through the use of intelligent, integrated back-of-house technology. For more information or to discuss SynergySuite’s solutions, please contact Greg at greg@synergysuite.com.

— FSR

Buffalo Wild Wings Launches New Sauce with New York Jets Player Ahmad ‘Sauce’ Gardner

Buffalo Wild Wings is teaming up with Jets rookie Ahmad “Sauce” Gardner to launch the new limited-edition “Sauce Sauce.”

Buffalo Wild Wings x Sauce Garner Sauce Sauce:

The limited edition “Sauce Sauce” is the perfect combination of smokey sweet and spicy BBQ.

Starting Tuesday, August 30, “Sauce Sauce” will be available at Buffalo Wild Wings locations nationwide for a limited time only.

“Sauce Sauce” can be ordered on wings and chicken sandwiches for dine-in, takeout, and delivery through the Buffalo Wild Wings website and app.

Together Buffalo Wild Wings and Sauce will host the first ever Sign with Sauce event, where Sauce will sign autographs in his signature “Sauce Sauce.”

The first 150 Jets fans will get a chance to meet Sauce and get his signature in sauce on  September 1st at the Wayne, NJ Buffalo Wild Wings location. – Source: FSR.

Golden Corral Receives Honor at Disabled American Veterans National Convention

Golden Corral announced that the company was named to the National Adjutant’s Circle at the DAV (Disabled American Veterans) National Convention on Aug. 4 for its 20-year partnership.

The National Adjutant’s Circle honors corporations and organizations for their exceptional support of disabled veterans. From what began as a company tradition to celebrate our nation’s heroes, Golden Corral has served over 6 million complimentary meals to military personnel and generated nearly $18 million in guest contributions to support community-based service initiatives for veterans through DAV every Veterans Day.

“It was an incredible honor for Golden Corral to be recognized by Marc Burgess, DAV CEO, with the National Adjutant’s Circle award,” says Chief Marketing Officer and U.S. Navy veteran Skip Hanke. “Our partnership with DAV is incredibly important to us, and we’re proud to consistently contribute to the organization’s mission. Our country’s heroes have earned and deserve the exceptional support that DAV offers them each and every day. I want to thank not only DAV but also all of our Golden Corral franchisees, whose consistent commitment to veterans over the years made this award possible.”

Founded in 1920 and chartered by the U.S. Congress in 1932, DAV is a nonprofit organization with more than 1 million members dedicated to keeping America’s promise to veterans. The organization fights for the interests of America’s injured heroes on Capitol Hill, educates the public about the great sacrifices and needs of veterans transitioning back to civilian life, provides employment resources to veterans and their families, and ensures veterans and their families can access the full range of benefits available to them. To learn more about DAV, visit DAV.org.

The annual national convention was held Aug. 6-9 to discuss the critical issues facing the veteran community. DAV recognized 36 individuals and corporate donors for their support of disabled veterans during the Dinner of Gratitude at the Hyatt Regency Orlando in Florida. Along with Golden Corral – America’s No. 1 buffet and grill – Chisholm Chisholm & Kilpatrick, TriWest Healthcare Alliance, and USAA were also named to the National Adjutant’s Circle. – Source: FSR.
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