The article highlights the relevance of food costing or breakdowns in the hospitality industry, a tool that allows for a detailed calculation of the costs associated with each dish or drink on the menu. These costs include not only the ingredients, but also the preparation, cooking, storage, and service. Food costing facilitates proper pricing, the identification of opportunities to improve efficiency, adaptation to changes in ingredient costs, and better inventory control. This tool is useful for both small cafes and large restaurant chains, and although its preparation may seem complicated, there are software and tools that simplify the process. Additionally, an example of how food costing is applied to a common dish, a hamburger with fries, is provided.
Effective management in the competitive world of hospitality requires mastery in various aspects. From customer service to the creation of an appealing menu, each element plays a crucial role. However, one aspect that is often underestimated and misunderstood is food costing. This valuable resource in planning and managing costs is essential to maintaining the profitability of any gastronomic establishment.
A food costing, also known as a technical recipe or breakdown, is a detailed calculation of the costs of each dish or drink on the menu. This analysis encompasses everything from the ingredients to labor and indirect costs. While it may seem like a laborious and meticulous job, this process is essential for the correct pricing, which in turn determines the profitability of a hospitality business.
A well-done food costing provides a complete view of the actual cost of each dish. This goes beyond the costs of the ingredients. It also includes the costs of preparation, cooking, storage, and service. Once this total cost has been broken down, owners and managers can establish a selling price that ensures a healthy profit margin.
Carrying out a food costing is not just a matter of accounting, it also has a direct relationship with operational efficiency. By analyzing each ingredient and each step of preparation in detail, opportunities for savings and efficiency improvements can be identified. It also allows for adaptation to changes in ingredient prices, always maintaining a profit margin.
A common mistake in the hospitality industry is price calculation based only on intuition or comparison with competitors. This approach, although quick, can lead to unexpected losses and profitability problems. Without a clear understanding of costs, it is difficult to establish a price that guarantees profitability. This is where food costings show their true value.
In addition, food costings also play a vital role in inventory control. By having a clear view of the ingredients needed for each dish, it is easier to plan purchases and reduce waste. This not only saves costs but also contributes to a more sustainable and environmentally friendly business approach.
It may be tempting to think that food costings are only useful for larger businesses. However, this is far from the truth. From the small cafe to the largest restaurant chain, everyone can benefit from this process. A good food costing can be the difference between survival and failure, especially in times of economic crisis.
Preparing food costings may seem like a daunting task, but there are tools and software that can simplify the process. From menu planning applications to restaurant management software, these solutions can help manage and automate the food costing process. This not only saves time but also improves accuracy.
This is an example of how you can structure your own food costings, although the specific quantities and costs may vary depending on your recipes and suppliers.
To illustrate the food costing process, let's consider an example with a classic dish found on many menus around the world: the hamburger with fries.
Dish name: Classic Hamburger with Fries
Ingredients:
Beef - 150g
Hamburger bun - 1 unit
Lettuce - 30g
Tomato - 50g
Onion - 30g
Cheese - 40g
Potatoes - 200g
Frying oil - 50ml
Condiments (salt, pepper, ketchup, mustard) - to taste | Cost of the ingredients:
Beef - 1.50€
Hamburger bun - 0.30€
Lettuce - 0.10€
Tomato - 0.15€
Onion - 0.10€
Cheese - 0.40€
Potatoes - 0.30€
Frying oil - 0.20€
Condiments - 0.05€ |
Total cost of ingredients for one serving: 3.10€
In addition, you have to consider the costs of preparation, energy, and other indirect costs.
Preparation and other costs: 1.50€
Total cost of one serving of Classic Hamburger with Fries: 4.60€
With this data in hand, you can calculate the selling price according to the profit margin you desire. For example, for a 65% margin, the selling price would be approximately 13.14€.
In conclusion, food costings are an essential element for profitability in hospitality. By providing a clear view of costs, they allow for accurate and efficient pricing. Moreover, they help to improve operational efficiency and reduce waste. Regardless of the size or nature of your hospitality business, food costings are a valuable tool to ensure profitability and long-term success. Setting the right price is just one aspect of the effective management of a hospitality business.
Finding the perfect location, with the right customer traffic, is another critical factor for success. In this regard, the Kamvy agency, specializing in hospitality transfers in Barcelona, can be of great help.
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