Unlocking the potential for profit growth is as simple as having the right menu design strategy. By implementing the concept of a menu engineering matrix, you can leverage an increase in profits of up to 5%. Although it may require some effort, the potential benefits make it worthwhile. Here, we offer insights on how you can successfully implement menu engineering to attract customers and optimize profitability for your business.
What is Menu Engineering?
If you’re a part of the hospitality industry, you may have encountered menu engineering. The process of analyzing each item on your menu to increase profitability.
To do this effectively, you must evaluate popularity, pricing, and profit margins. This information will guide you in deciding where to place each item for maximum impact on your guest’s experience. A good inventory control system could help you get precise data on your menu options.
In addition to item placement, the overall appearance of your menu is equally essential. It should showcase your establishment’s tone and design to leave a lasting impression on your customers. Menu engineering provides valuable insights into your product offerings, allowing you to focus on increasing profits by tweaking individual items.
Using a Menu Engineering Matrix
A menu engineering matrix is a powerful tool for business owners to determine which products are best for their restaurant. By classifying menu items into four categories, this matrix can help you prioritize your offerings based on popularity and profitability.
To fill out the matrix, you need to calculate the sales volume and profit margin for each item over a specific period. Using this data, you can plot each dish on the graph to see where it falls in terms of popularity and profit.
By analyzing your menu in this way, you can focus your efforts on items that perform well and improve or eliminate those that don’t. With the help of a menu engineering matrix, you’ll be able to fine-tune your business and maximize profits.
The matrix is split into four categories:
Menu items under the ‘dog’ category have low profitability and popularity due to high labor and ingredient costs. It’s important to consider altering these dishes or relocating them on the menu. If they continue to perform poorly, removing them entirely may be necessary.
While “Plow-horse” items are popular among diners, they have low profitability due to the high cost of ingredients. When adjusting the recipe, caution is needed to maintain the item’s popularity. You may be able to find suitable alternatives that won’t affect the taste. Alternatively, consider reducing the portion size to minimize waste. However, be mindful to make only minor alterations to avoid upsetting customers who expect a certain quantity.
If you have items on your menu that don’t sell well but have high profitability, they are called “Puzzle”. There’s a simple trick to increase their popularity among customers. Simply move them to the top right-hand corner of the menu. Studies show that diners tend to look at this part of the menu for the longest time, so it’s the perfect spot for items with high-profit margins to gain visibility. After some time, evaluate whether this change has led to an increase in popularity for the item. This easy adjustment can make a significant difference in your business’s profits.
The star menu items have proven to be both profitable and popular among your customers. These items are cost-effective to produce and already have a high demand. It’s suggested to maintain these items as they are and keep promoting them as you’ve been doing. Ensure their visibility on the menu as they are a clear choice among your customers. Ultimately, aim to make every item on your menu a star.
Assessing your menu and dishes is key to boosting your food business’s profitability. To achieve this, it’s critical to identify and evaluate your most popular dishes and their potential impact on customers if removed or modified. Customer feedback is essential in this process, so listening to and engaging with your customers and employees is crucial. By implementing menu engineering, you can make strategic changes that will enhance your menu and customer experience, ultimately driving profits up.
You can combine this strategy with reducing wood waste at your establishment. The more technics you implement the more chances of success you have.