Calculating plate costs without standardized recipes

[Qwerty]

I just started a new job recently...things are going well. I only have one minor issue. The food cost with the last chef was pretty out of whack, and to top it all off, the "systems" that the place uses, especially regarding inventory, recipes, cost control, etc are all pretty shabby.

Its a small place, not very busy right now because of the winter season, so I have some time to implement my own systems and all that.

The main issue is, since the food cost under the last guy was pretty bad, he now wants me to do a "plate cost" style of food cost and recipe development. I've never professionally done that system before, and I haven't even practiced it since school. I've never used that method for costing dishes as a sous chef or chef, and it's my understanding that the typical types of places that implement a plate cost and strict recipe/portion control are the "chain" type of places, where there is a centralized management structure that independently develops recipes and hands them down to the outlets. As a corporate structure, this makes sense to me as an overall business plan. but for an independent operator, not so much.

My main method for food costing has been to base the cost of the dish on the protein's EP, account for the garnishes, Q factor, etc, and also what we think we "could" charge. We also have, in previous jobs, taken monthly inventory and all that to determine the actual usage and food cost, etc. This method seems to work quite well. This has all been at smaller restaurants, not at big corporate places.

Now, I've agreed to do the plate cost...I tried to convince the owner that it wasn't really needed and that I was pretty sure I could get a hold of the food cost not doing the plated cost. I don't know if why or how he has it in his head that this is a good idea, but he seems convinced and I'm not inclined to push TOO hard since he is, after all, the boss. It's not a huge deal to me, I have a decent grasp on what I need to do, but the problem is this:

How do I accurately forecast the plate cost when I don't have existing, costed recipes to rely on? I'm planning on changing the menu next week, and while I have "recipes" and methods in my head about everything on the menu, I don't have technical, written recipes with yield and such. So...how do I do a plate cost without this knowledge? Let me give an example...

If I want to do Seared Duck with Braised Cabbage, I know that (for example) duck costs me $4.00 a portion. I know that cabbage costs $1.00 a pound.

What I need in this example is a PORTION cost for the cabbage, right? I don't know how many portions a lb of braised cabbage yields...so I make a recipe that looks like this:

1 lb cabbage

1/4 c. dark brown sugar

1/4 c. light brown sugar

1/2 c. red wine vinegar

1 Green apple, grated

2 TBSP. Carraway Seeds, toasted

salt to taste

OK...that is an example recipe, BTW. So, I just pulled that out of my ass...I have no idea if the proportions are right, etc. I won't know until I make the recipe, write everything down, and adjust accordingly...right? I won't know until I make it how many portions I get out of one batch...right? Could be 4 could be 10 portions.

So, how can I accurately forecast plate costs without standardized recipes? My plan as part of the new menu rollout was to develop these recipes, fine tune them, THEN determine yield and batch/portion cost. The owner didn't like it because, as he said, I'm working backwards. Technically he is right, but I don't see any other way. My idea was to just do the "dirty" food cost at first, and after the first week or so, once all the recipes are standardized and in place, go back and fine tune the plate costs and figure it all out.

Do you guys get what I am saying? I hope I am being clear....is there another way because I don't see it. You need standardized recipes first, then you can determine plate costs...right?

I'm really trying to figure out if I'm just doing it wrong or if he wants me to do something that I really can't do. Please help.

Thanks, sorry for the long post.

[Lisa Shock]

Off the top of my head, I can think of two ways to approach the problem. One would be to find standardized recipes in a professional cooking book, such as those used in culinary school and just make minor adjustments to them to customize to your style. The minor adjustments, like adding or removing a spice, shouldn't affect the yield much if you're careful.

The other way is to find equivalency charts like THIS and research each of your recipe's items. Yes, your cabbage example is on that chart.

The fact is, until you've actually made the dishes a few times in your employer's kitchen, you won't know a lot of the finer details about yield. There's usually something about a container or utensil or an annoying trait of the food itself that throws a monkey-wrench into the works. But, cost cards aren't set in stone, it's always a good idea to keep re-evaluating them.

[hathor]

And of course, you inflate the cost of the portion just a bit to give you some hedge room...and if you come in way under, you're a hero. Give it your best shot. Under the circumstances, this a 'best guess' scenario.

[Qwerty]

Thanks guys.

Thats kind of what I'm trying to tell him, is that I can't know the yields and the portion costs without making the recipe's and actually seeing how much it makes and working from there. I don't know if he thinks or expects me to just have a bunch of standardized recipes in my arsenal or what...but it's just frustrating.

Like I said, I have no problem doing the recipe/plate costing, it just seems to me I need to do the menu, roll it out, tweak and measure the recipes, then fine tune the costs once the recipes and portions are in place. I can do a reasonable "best guess" initially and then fine tune a week or two later. We have the ability to print the menu in house, so it seems like a perfect scenario to me.

He just doesn't seem to be going for it. Thanks again, I guess I just needed confirmation that I wasn't crazy or stupid or something.

[ScottyBoy]

Very weird that he's not giving you a little time to settle in. Considering you are replacing someone who's FC was out of control you would think he would understand that you need to clean up the joint. Is this a very large place or have more than one location? Seems really extreme to calculate per plate for a smaller spot.

Congrats on taking over though!

[Qwerty]

Yeah no, it's a small, independant place. It seems weird to me too, but I think it's just a knee jerk reaction to the last chef. I just think the owner somehow thinks this is how places calculate food cost for some reason--who knows if he read a book or an article or something. Part of the reason it's happening so fast is because I want to change the menu ASAP. The old menu isn't complete crap or anything, I just want it to reflect my style and start implementing changes, etc.

Just one thing, for example. Their portion size for the lamb dish is one entire rack. I thought that was quite...generous. They buy cryovac'd frenched lamb racks (no problem there, just saying) and serve the entire thing to one guest. Anyone else think things like that contribute to high food costs lol.

[ScottyBoy]

Holy $^! a full rack! I'm buying local wholesale racks for around $20-25 a pop right now and serve 5 people.

Edited January 17, 2011 by ScottyBoy (log)

[KatieLoeb]

Certainly for costing out stuff on the bar side, I use an Excel spreadsheet set up with cost of the bottle, volume of that bottle in ounces, how much is used in any given recipe, cost of mixers, cost of garnishes, etc. to figure out how much any given cocktail costs to produce. Not so different than figuring out food costs in a slightly different format. The last two columns calculate my percentage cost at two different price points. I'd be happy to share an example of that with you if you PM me. It's the same thing but with liquids rather than solids, so to speak.

You don't have to have made the recipe necessarily to figure this stuff out, although I suspect it's much more straightforward with liquid volumes of measurement. But certainly you can find out what your cost is on a pound of X protein and underestimate the number of servings that might make. If a case of celery costs X then roughly estimate what proportion of that is the 3 cups of diced celery you need for that recipe. Keep underestimating and everything after that makes you look like a cost control genius...

[Qwerty]

Lol I know, I was shocked when I saw the portion size. It's not great lamb or anything, standard stuff, but it's still the priciest protein they buy. And they give, like, twice as much as I would do.

Katie, I appreciate the support. I'm not at a loss for knowing how to do the calculations, and I have a costing spreadsheet all made up and ready to go, I was just wondering if I was crazy thinking that I should make my own recipes and determine cost/yield before I was able to do plate costs. My new boss seems to think I should do it the other way around, which is quite possible.

This brings up an interesting question though...how do most of the chefs here determine food cost? Do you guys/gals base it on protein, add a couple bucks for garnish, and then divide by desired FC%? Or something a little more involved? I've heard some places that just basically multiply the portion cost by 4 to cover all expenses.

Now I'm just curious...thanks again to everyone for the help.

[Chris Amirault]

We've been having a discussion of drink costs at the restaurant where I work, and we've had to find a middle ground. Our drink menu generates from a variety of sources, including "bartender's choice" and experiments with new ingredients served to regulars interested in cocktails. On a busy night, that's part of what keeps regulars coming: even when we're crushed we will take time to share something new.

Trying to cost out those drinks to the penny on the fly, however, is a major pita. At one point, a manager added to the (unbelievably idiotic and slow) POS system every spirit, liqueur, etc. at a variety of measures, from 1/4 oz to 2 oz. As you can imagine, this didn't go over very well with the bartenders, who didn't want to take five minutes to hunt down and enter on the POS (to give an example from last night) 2 oz Redbreast, 1/2 oz Jura Superstition scotch, 1/2 oz Grand Marnier, and 1/4 oz Fernet Branca while figuring out, tasting, talking about and serving the drink itself.

So we came up with a compromise that might be useful in your case. We said to the manager, "Look, we commit to estimating costs using your pricing guides for these new drinks as we develop recipes, and we commit to locking into accurate costs when we finalize the recipes and methods in a service setting. But you need to commit to providing us relative flexibility at the development stage, within a certain error percentage and only for a limited time." It affords both accountability, which the manager needs, and flexibility, which you need, and it demonstrates that you're not the knucklehead he had before.

Edited January 17, 2011 by Chris Amirault
Edited for clarity -- CA (log)

[xxchef]

Their portion size for the lamb dish is one entire rack. I thought that was quite...generous. They buy cryovac'd frenched lamb racks (no problem there, just saying) and serve the entire thing to one guest. Anyone else think things like that contribute to high food costs lol.

Just because a food costs a lot doesn't mean that it is contributing to high food cost. Food cost is the ratio of the cost of the food to the price it is sold at. If your rack of lamb dish costs you $20 and your selling it for $60 that's 33% food cost. Not bad, depending one your other costs.

Don't get too hung up in the percents either. I understand that the owner is fixated but you can educate him. "Margin" is another, probably more important number to assess. Margin is kind of the inverse of food cost but in dollars, not percent.

Using the lamb dish example above your margin would be $40 ($60 sales price minus the $20 cost of the ingredients). If you have another dish, say a pasta dish, that costs you $10 to put out the door and you sell for $40, that's a 25% food cost. The owner will like the sound of that BUT it has only a $30 margin. At the end of the day if you sold 20 lamb dishes and 20 pasta dishes, the amount of money left over after paying for the ingredients your owner is going to have another $200 dollars to pay his other bills by selling more of the higher food cost lamb.

That brings me to another point. Menu mix. When you're looking a food cost you need to look at your overall food cost, not just those for the individual dishes. The owner is going to have some kind of idea about what food cost he wants to run but that doesn't mean every dish is at or near that cost.

The nature of the beast is that you will likely have a pretty wide range of individual dish costs. Your pasta dishes should run better food costs than your racks. There's just no way to mark up some things enough to get your costs down (and still sell them) and it would be just silly not to mark up even low cost items to their local market value. If, in the above examples, you sold only racks, your food cost would 33%; only pasta = 25%. If you sold an equal number of each your total menu food cost would be 29% (33+25 divided by 2). So you can see how you can also manage the food cost by massaging the menu mix in addition to the selling price or cost of ingredients.

On the other hand, I suppose that if costing the recipes is daunting, menu forecasting is probably close to impossible at this point for you. Keep it in mind for down the road.

Good luck.

[Lisa Shock]

Just to clarify, the chart I linked to shows what various vegetables wind up cooking down to, in addition to how they trim down. So it lists one head of cabbage and the average yield as raw shredded, for a slaw recipe, and shredded then cooked, for, say, a sweet & sour cabbage. You can get a pretty good estimate of final volume for a recipe you've never cooked by using it -how it might taste would, of course, be debatable.