The Spike Pub & Liquor Store - ABLE BC

Controlling food cost has never been so important nor so difficult for pub
operators. In the changing competitive landscape, the future success of pubs
depends on their ability to capitalize on the opportunities available from new
operating models. One key opportunity rests in the increased prominence of
food programs.
The pub industry has been hit hard recently. After overcoming challenges
presented by legislation related to smoking and alcohol service, the last couple
of years have brought a second wave of trials that jeopardized this industry's
survival. The economic downturn reduced the disposable income of consumers
and decreased their spending in food service operations. Increased wage
demands and higher input prices have reduced operators' margins. Now, as
BC adopts the HST, patrons will pay tax on items that were previously exempt,
which will likely reduce spending further.
In order to thrive, not just survive, operators must rely less on alcohol sales and
begin diversifying their service offerings. Food can no longer be an afterthought.
A greater focus on food programs will increase revenues, build traffic flows,
and improve profitability. Unlike alcohol, food menus provide operators with
the ability to differentiate themselves from the competition and can become
a more stable source of long-term growth.
Benefiting from these opportunities, however, requires a different approach to
menu planning and cost control. Recipes will become increasingly complex,
menus will need to be updated more often, and there will need to be a greater
emphasis on fresh, made-from-scratch dishes. In light of these changes,
managers should consider the following practical suggestions to ensure that
food costs are maintained and their financial targets are achieved:
Standardize Recipes
Detailed recipes and product specifications will need to be created and adhered
to. These standards will guide employee food production, guarantee that guests
receive a consistent product, and ensure that item costs can be maintained.
Batch recipe and yield costs must also be developed as the number of items
made on site increases.
Update Menu Costing
Every food product and processing activity has a certain amount of inherent
natural variation that cannot be controlled. Not every head of romaine is exactly
the same, for example, and not every roast shrinks the same amount when
cooked. As more fresh ingredients are utilized and the number of preparation
steps increase, the greater the impact of this variation will have on food costs.
Management must include an allowance for this variation when they determine
costs for each menu item. Not doing so will result in ideal cost targets being
set that could never be met, and prices being set that do not provide adequate
margins.
Multiple Vendor Sourcing
Unless contract prices are established, fresh and locally sourced ingredients
are prone to more frequent price changes. To protect themselves, operators
should ensure that they have a minimum of two suppliers for every product
they use. Not only will this promote price competition between vendors, it
will also reduce the chance that the pub will get caught shorthanded, should
a vendor have problems with its supply.
Improve Receiving Practices
Many management hours are spent trying to correct supply problems such
as short shipments, product substitutions, and inferior quality product, which
could have been caught at the door. With clear specifications established, staff
entrusted with receiving product should inspect all items to ensure that they
meet the pub's requirements. Often this involves little more than checking
items off of the delivery invoice.
A scale should be located near the receiving area so that staff can verify the
weight of arriving products. It should be used for items purchased by weight,
such as beef as well as for checking the weight of a case of tomatoes or potatoes.
All produce should be inspected for quality as well as size specifications.
Occasionally, cases should be opened from the bottom to verify that the
The Publican
23