Pandemic Increases Reliance on Sound Practices to Control Food Costs

Arestaurant manager’s day was usually busy enough before the outbreak of the novel coronavirus pandemic late this winter. Now, as more and more of the nation’s restaurants are allowed to reopen their dining rooms and have guests back inside, the tasks on the typical manager’s plate have multiplied thanks to new operating procedures established to ensure the health and safety of team members and customers alike.

That doesn’t mean their old tasks are any less important and necessary, however. Restaurant management still needs to monitor and manage the profit and loss statements, schedule employees, run inventories and track food costs. In some ways, these old tasks have taken on new importance in the wake of the pandemic.

The use of best practices in these areas can provide more efficient operations and unlock savings that are needed now more than ever. They can help managers maximize their assets in the face of many uncertainties, such as whether consumers will be comfortable returning to dine-in services or more shutdowns will be required if viral infections flare again – as some health experts have predicted they might – in the fall.

In this world of unknowns, food costs have been a hard-to-predict variable. For Buffalo Wild Wings®, it’s been a particularly vexing topic. First, with the cancellation of the NCAA Division I Men’s Basketball Tournament less than a week before it was to start, reports suggested there was a surplus of chicken wings at restaurants like BWW® that stocked up to feed the large crowds drawn by March Madness. Then, weeks later, there were reported shortages of chicken, beef and pork in the United States’ supply chain as meat production plants were temporarily shuttered because of COVID-19 outbreaks among their workforces.

“We continue to see the roller coaster in food costs,” said Juan Feliciano, area director of Four M Franchising, in early June. “Wings are up, and then they are

by Sean Ireland

down again. This trend continues every month.”

Jeff Carmody is a district manager for JK&T Wings and its 84 BWW sports bars. He’s noticed a small increase in wing pricing over the past 12 months. With an increase in wing sales due to the brand’s national buy-one-get-one campaign, selling them at a discount while their cost has increased has had an amplified effect on the bottom line.

“We are hoping that the demand for items such as wings decreases, and we see a bit of a break with a lowering of the cost per pound,” Carmody said. “That said, with the rising cost of beef, it may cause more restaurants to move to chicken, which could raise the pricing due to demand.”

Predictions on what the future holds for food costs may be difficult due to the volatility that the pandemic has inflicted on the nation, but franchisees are doing

their best to manage around the uncertainties by focusing more than ever on the fundamentals in their kitchens.

JK&T Wings District Manager Michael Woodworth said the company is monitoring the higher-use items more closely to minimize cost. “We always want to keep inventory tight and right,” said Jason Garrity, another JK&T Wings district manager. “We may do more spot checks on items that are big movers to keep a closer eye on them, but we never really shy away from this regardless of the costs.”

“The key is to order to volume and adjust with usage,” Carmody added. “The less money on the shelves, the more dollars to use as cash flow for the business. Tightening inventory based on usage is always the best practice. That goes for all items, including dry goods. Daily counts on meats and high-cost items is key to keeping those inventories under control. We track these items very closely.”

“Keep inventory [in the house] tight and organized,” Garrity also suggested. “It allows for easy counts and better management of product. Always keep the teams heavily involved in it, too, and the numbers will improve.”

“During this pandemic, it’s important to keep food affordable so all can enjoy it, so it is even more important to watch waste of food and hone in on errors in-house,” Feliciano said. “The less food you waste, the bigger impact you will have on the bottom line in a time where prices are high.” A tight grip on food prep procedures, such as checking daily that proper portions are used, food is rotated well and storage is optimal, ensures that waste is kept to a minimum.

Industry experts are suggesting another way for restaurants to lower their food costs and, by extension, labor costs: menu simplification. As many restaurants pivoted to takeout and delivery operations exclusively when their dining rooms closed, managers took less popular dishes off menus and focused on making and selling the most popular items – the so-called comfort foods with which their brands are most associated.

Keeping the top 80% of a restaurant’s best-selling items, combined with reducing the number of ingredients required to make dishes, has a significant impact, said industry consultants Bruce Reinstein and Tim Hand in a story for FSR magazine. Simplification leads to less kitchen staff and less time needed “During this pandemic, it’s important to keep food affordable so all can enjoy it, so it is even more important to watch waste of food and hone in on errors in-house,”

– Juan Feliciano, Four M Franchising area director

“I think menu optimization and minimizing SKUs (stock-keeping units) on menus is something that needs to be looked into,” Carmody said. In addition to lowering the number of ingredients needed to prepare meals, “this also gives us opportunities to lower labor costs because we’ll have to pay less for training because of fewer items to prepare and train for with ease of execution. Simple is sometimes better.”

While tight order controls, wastereduction steps and menu simplification keep food costs as low as possible on the front end, pricing adjustments are a way to make up for rising costs on the back end.

“Small price changes can make a big impact on cost. However, it is very important to consider how raising prices would influence the guest traffic,” Garrity said.

“It’s important that we don’t price ourselves out of what we are viewed as, which is a casual-dining sports bar,” Carmody added. “We have to adjust menu pricing of items where there is demand but be cautious enough that we don’t turn away consumers. It’s a lot easier said than done, but losing foot traffic is something you can ill afford.”

In the post-pandemic world, it’s difficult to predict what life will be like months or even just a few weeks into the future. Schools and colleges remain unsure of what their fall semesters will look like. Professional and college sports leagues are blindly feeling their way forward toward practices and games, with no guarantees that either will be able to happen. A patchwork of shelter-in-place orders remained in effect into June, and many more could be reinstituted if hotspots of infection develop.

With so much uncertainty, keeping a close watch and tight grip on costs can be critical to survival. Making sure everyone is on the same page when it comes to that concept is crucial.

“Talk about it with your teams on a continual basis. Every manager and team member should know each week what the store’s costs were,” Garrity said. “Set goals and targets each week for the management team, and again, share those with the team. The more you share with them the more involved they feel.” S

SEAN IRELAND is the FBS associate director of communications. You may reach Ireland at 678-797-5165 or seani@myfbsonline.org.

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