Lists should be short. See Kelson, A. H. (1994) "The ten commandments for menu success". While menu engineering is most often mentioned in the context of traditional paper restaurant menus, the concepts are equally applicable to menus posted online, drink menus, specials written on table tents, and items written on menu boards. It can be confused with static menus because the words, outside of the context of menu names, are similar. Since 1999, Mirus has been used by Operations, Finance, Marketing, and IT. Avec des Glacons, Hache, Omakase, Du Jour, Veloute Sauce are all explained on the chart, a perfect reference for anyone who wants to understand every word a menu might throw up. Click the button below to download the 3 Ways to Measure Restaurant Cannibalization PDF to learn how to dive into your even data deeper. For example, let's say after some menu analysis, you discover that you have the most expensive burger in town. Sales mix is the proportion of each product sold relative to total sales. Your food cost % =35.40% (8.85 divided by .25 = 35.4%). The sales mix calculation tool below will help you get a better picture of the dynamics of your menu, which items are most popular, which ones drive the most revenue, which ones are stars, and which ones are dogs. Use the profit/popularity information from part (b) to help determine how you want to deal with each of your menu items. Typically viewed at the end of a meal, a dessert menu is a menu or section of a menu that lists only the desserts. Furthermore, out of these 40, I estimate that only 10 are doing a good job with their engineering efforts. He is available to work with restaurants. The contribution margin is calculated as the menu price minus the cost. This article is based on a series of interviews that Menu Cover Depot conducted with California-based menu engineer Gregg Rapp. Also, you may want to tell customers why the item is on your menu: Did your grandmother use this recipe? Click the button below to download the 3 Ways to Measure Restaurant Cannibalization PDF to learn how to dive into your even data deeper. The two criteria for determining which menu items should be featured on a menu have been food cost percentage and gross profit. When you understand the profitability of each item, you can develop better pricing strategies to better engineer your menu. For example, if you buy 12 eggs for $3, then by dividing $3 by 12 you’ll see that the AS cost of an egg is $.25. Part of the design process involves highlighting the items you want to sell the most (your Stars), but it goes beyond this and can’t be accomplished with a simple checklist. Your best option may sometimes be to deemphasize these items by simply listing their title and prices on your menu and not putting any further effort into their promotion. Customers can choose individual items and combine them any way they want. : Effects of Menu Price Formats on Customer Price Purchases", Learn how and when to remove these template messages, Learn how and when to remove this template message, Michigan State University School of Hospitality Business, https://en.wikipedia.org/w/index.php?title=Menu_engineering&oldid=895499159, Articles that may contain original research from June 2014, All articles that may contain original research, Wikipedia articles with style issues from June 2014, Articles with multiple maintenance issues, Creative Commons Attribution-ShareAlike License, Psychology (perception, attention, emotion/effect), Managerial accounting (contribution margin and unit cost analysis), Marketing and strategy (pricing, promotion), This page was last edited on 4 May 2019, at 17:47. A beverage menu is any menu or section of a menu that sells alcoholic and non-alcoholic drinks. Instead, the determining factors are the restaurant owner/manager’s knowledge of the menu and willingness to put in the time and effort needed to understand the process and execute changes. In the end, no matter where you are in the PMIX reporting spectrum, you’ll want to make time each week to see what’s selling and what isn’t. It involves categorizing all menu items into one of four menu engineering categories, based on the profitability and popularity of each item. This makes static menus particularly easy to navigate. And, as we mentioned, food and beverage in a static menu are usually categorized into different groups. $8.85 is your Plate Cost or Food Cost in terms of what the products cost. You might think menu engineering is just a menial task, but when it's done right, it can increase your sales by 27%. A fixed menu is also commonly called a set menu, and there are two common types. Through the Eyes of the Customer. Then another sandwich on Tuesday. For that reason, many restaurateurs don't take the time to analyze their menus. It … Menu engineering is the study of the profitability and popularity of menu items and how these two factors influence the placement of these items on a menu. You can find more on cannibalization here, market basket analysis here and the pit falls of trying to rely on PMIX alone, here. Think of a dog groomer with a menu of services. Larger menus hinder your ability to influence customers’ actions. To accomplish this, divide the Total Item Sales by the Total Sales. Promoting only low food cost items will likely result in lowering your average check and unless the restaurant attracts more customers, overall sales will not be optimized. These items referred to as primes. cannot measure things like cannibalization by simply looking at a product mix report. Many-panel menu—The more panels you have in your menu cover the less control you have over the menu. Viewing the data at the section level will then enable you to determine how to place and promote menu items within each section of your menu. If they stick to those sandwiches on those days and repeat that week after week, it’s a cycle menu. And there’s no better way to make more money than that! This number is useful as it can be used to determine the efficiency of changes to your menu. However, if the number goes down, well, you might want to rethink that special because it’s clearly not making you more money. For drinks it may be shots, cocktails, beer, and wine.