Properly tracking the amount of finished product yielded from the
preparation of raw products and ingredients is a critical component in
food cost control management. This practice is especially important
for those operations that cut their own meats, make batch recipes, cook
items in bulk or prepare large quantities of raw produce. If done
properly, tracking yields can be a relatively easy process and should
be frequently done for those raw products that you spend the most on
each month. To simplify this process, you can download our free Yield Calculator Spreadsheet.
Determining
accurate recipe and menu item costs are the foundation of menu item
pricing. Without establishing an accurate menu item cost, it is
impossible to determine a menu pricing strategy that will achieve your
restaurant food cost and profitability goals. To establish an accurate
menu item cost, it is important that the ingredient and recipe cost for
a given menu item is determined properly. To achieve this, it is
important to distinguish between the "as purchased" product price and
the "edible portion cost" for your menu item ingredients. Using a
yield analysis spreadsheet will enable an operator to easily calculate
this edible portion cost.
Prime rib is an excellent example of
a menu item that can benefit from a yield analysis to ensure the
correct menu item pricing is established. As an example, imagine an
eleven pound rib that has an "as purchased" cost of $5.50/lb. After
the cooking process is complete, this eleven pound rib might produce an
eight pound prime rib. Since prime rib is cut, portioned and sold
based on the cooked weight, it is important that the operator calculate
what the cost per pound is for the cooked prime rib (the edible portion
cost), not the invoiced cost per pound (the "as purchased" cost). In
this case, the edible portion cost for the prime rib is $7.56--more
than two dollars above the raw "as purchased" invoice cost of $5.50.
Any menu item price calculations need to consider the portion size that
will be served to the guest, the desired food cost percentage AND the
edible portion cost of the prime rib.
It is not sufficient to
do a yield analysis only once for your key
products for the purpose of calculating menu prices and then to stop
with any future yield
calculations. Rather, routine analysis for each key item should be
executed to ensure that yield results remain consistent over time. Any
change in
yield results that go unnoticed will have a significant impact on your
profitability for that menu item and will undermine any
menu item pricing strategy you put in place. Further, executing routine
yield calculations for your key items will help create yield trends and
averages that are invaluable in gauging ongoing product and employee
preparation performance by ensuring consistent achievement of the
established acceptable product yields.
In
the previous prime rib example, the yield after cooking was 73%. If
73% was considered an acceptable yield, then subsequent weekly yield
calculations should produce a yield relatively similar to this figure.
Any significant variations from this number will have a significant
profitability impact on that menu item.
It is important to
understand that executing a yield analysis, alone,
will not have any effect on your food cost and restaurant
profitability. Rather, the goal of yield calculations is to make aware
the fact that there are product or performance inconsistencies that are
affecting menu and recipe costs. In
other words, yield calculations bring to light that there is a problem,
but the problem must then be identified and solved if yield results and
profitability are to return to normal. Changes in product yields can
be attributed to a number of factors. Just a few possible causes that
an operator might want to examine are changes in product specification
(fat content, quality grade, size, origin, etc.), brand or manufacturer
or cooking procedures. Another common reason for variable yield
results is the inconsistent trimming and breaking down of meats.
Operations that cut their own meats often times have different yields
based on the employee executing the preparation. By executing yield
calculations, operations can set benchmarks and monitor employee
performance against these standards. Further, routine yield
calculations on meats that are broken down in-house can help quickly
identify a change or inconsistency in the raw product from the supplier
before the change becomes noticeable by looking at the bottom line.
While executing routine yield calculations can seem like a
time-intensive and daunting task, it need not be. Using a spreadsheet,
like the free one that we provide on this website,
can make yield calculations relatively easy. Further, the little extra
time that it takes the employee responsible for the preparation of the
product in tracking what they produce will let them know that you are
vigilant about maintaining standards and this will help them police their
own performance.
Once
you have a tracking spreadsheet in place, the best place to begin is
identifying the items to track. Our recommendation is to request a
tracking report, also known as a velocity report or descending dollar
report, from your supplier. This report lists all of your purchases in
a given time period in a descending dollar format. We recommend that
an operation routinely execute a yield analysis for at least the top
five items listed that are prepared or cooked before portioning for
sale.
Our final recommendation is to stay consistent with the
execution of this practice and to review the results frequently. Often
times these types of procedures can begin to get overlooked in the
bustle of the restaurant environment. However, staying on top of your
yields, especially for those items that you spend the most money on,
will help ensure that you are getting every possible penny of profit to
your bottom line.
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