I'm back and will post more very shortly!!!

To all my loyal readers, followers and casual visitors to hospitalityimprovement.com

For the last few months, I have not been able to access my own account as Google have made changes and blocked access, and only today have I finally been able to get back in!!!

It has literally taken me approx 40 hours all up to try and sort this mess out.

Seems to be OK now, and I look forward to sharing my knowledge and continuing to build what I believe is one of the best free hospitality resources available on the web.

If you have any info or advice you would like, don't hesitate to leave a comment and I will do up a post to that effect.

With warmest regards,
James

Food Cost - How to calculate and control

Food cost is one of the most important numbers that any food service organisation will ever have to deal with, and if it is not correctly managed then it cannot be stressed enough that the business will fail.

The food cost though is surprisingly something of a taboo subject even for senior kitchen team, but as it is one of the most important benchmarks that a business operates around, it is something that must be understood by all back-of-house staff.

For the record, the magic equation is:

Food Purchases / Food Sales OR Cost of Food Sales / Food Sales

Obviously this is calculated after change in relative inventories.  This is where most food cost budgets fail, as they do not determine the fact that stock on hand falls and rises with sales and orders.

To factor inventory:

Cost of Food Sales = Purchases + or – Inventory Adjustment

All too complicated?  Here is an example:

Total purchases - $1000
Beginning Inventory - $1500
Ending Inventory - $1250
= $1000 + $250 (amount of food from inventory) = FOOD PURCHASES
$1250 / Food Sales = Food Cost

Another simple method is:

Take the cost of food / The revenue earned * 100

A final but not often used calculation is to work out a costing based on a desired cost:

Cost of product / .30 (desired food cost 30%) = Sale price of item

So much though can alter this, and it is important that you ensure that everything is calculated into your actual food purchases as the cost of the actual meal made may not factor in other intangibles.

For example a steak dish should not be just calculated in regards to how much the meat itself costs, but should include the secondary items/wraps on the plate (vegetables, salads, etc).

Everything on the plate must be factored.

Do not forget as well that tea and coffee and even juice should be calculated as food.

What constitutes a good food cost can vary from the style of the venue through to the volume of the establishment – noting that high customer covers in a restaurant is vastly different to the numbers that take place in a catering or events environment.

Some restaurants aim for 25%, which is quite aggressive.  Other venues will allow numbers as high as 35%, while large scale functions should come in even lower, considering that the food will likely be bulk prepared and not made to order.

Food cost is maintained by the kitchen, even though the owners or managers of a particular venue may set the budget.  The amount of money that can be spent on a purchase should be dictated by that set budget, but in this it must be altered if a figure is not met or exceeded.

As I consistently preach in hospitality improvement, communication here is crucial.

If systems can be set up to assist, such as a specific purchase order system, this in theory makes the job easier.  But make sure that for all the bells and whistles used to measure and track food cost, that the basic fundamentals – revenue (be it daily/weekly, etc), total purchases on food, forecasting covers, and adjusting based on trading numbers – are always open not only between the “powers that be” but with anyone who has responsibility for food ordering.

Specific kitchen controls, such as wastage and portion control need to be monitored by the back-of-house staff.

Portion control is crucial, and one of the best ways to do this outside of setting specific portions is to spot check preparation staff and make sure that laziness and lack of care doesn’t result in 50 steaks being cut a few grams heavier than allowed.

Large international chains such as McDonalds live and die by such practices, and it is no coincidence that the strictest portion controls operate in these types of venues.

Another important factor in maintaining food costs is stock control, so never underestimate the importance of stocktaking and keeping strict records on inventory.

Sales and Yield / Revenue Management in Hospitality

Yield Management is the art of selling or more importantly yielding a fixed amount of product(s) to ensure a full complement of sales.

In most cases, these refer to a fixed resource.

In theory, seats in a restaurant or a bar are not termed as a pure fixed resource, for the simple fact that while we prefer to have a full venue, they will not perish as a revenue source if not filled.

Controls are implemented around this.  If one is expecting a quiet night, then staffing and goods will be adjusted accordingly as to not lose money, yet if a busy service is likely, then manpower and stock will be carried to allow for the increased business flow.

In a perfect business world or with an efficient operating model, then strong revenue management will enable a restaurant, café or bar to be full at all times – effectively meaning that maximum profitability is yielded constantly.

This however is the exception rather than the norm.

So in this, non fixed or perishable resources are related to logistics and planning.

The best example of a fixed resource is a hotel room or an airline seat.

A night in a hotel where occupancy is not full or to budget, is an example of inefficient yielding, for if 100 rooms in a 200 room hotel are not sold on that date, they then perish as a revenue source.

This also applies to an airline.

The flight needs to take off as per a carrier’s schedule, and because capacity is fixed, unsold/empty seats do not generate any revenue, and hence have corroded in their ability to earn revenue.

To then build on this, businesses then need to attempt to understand and ultimately manipulate customer behaviour in order to maximise (yield) revenue.

In this, often businesses will try to sell their resources for different prices at different times, again to yield their sellable items in order to prevent any perishable revenue sources.

Generally, there are three conditions for revenue management to be applied:

1.     There are a fixed amount of resources or goods for sale

2.     Those resources are perishable or have a time limit after which they cease to of value and are essentially wasted.

3.     Different customers are willing to pay a different price for using the same resources, pending on the time they purchase.

Without veering towards economic theory, revenue management, especially in regards to airlines, are a direct result of Deregulation.

Deregulation is in essence part of capitalism and a free market, meaning that government controls and rules are simplified (or removed altogether) encouraging more players and competition.

But I digress!

Yielding in restaurants, cafes and bar is a lot harder than in hotels and airlines, due to the fact that most of those larger businesses and industries now rely on Global Distribution Systems (or Computer Reservation Systems -CRS).

To yield effectively is not only to ensure that all resources are sold, but that you understand the customers, the current nature of the market, and what a customer may or may not be willing to pay.

A CRS can only be matched by the most state of the art restaurant reservations systems (or a very sharp manager or specialised reservations co-ordinator), meaning that one must always be aware of forecasts or previous trends for any given shift.

This in essence, is where discounting and specials apply in the airline and hotel industry.

These are not so easy to apply in a restaurant.  An airline may sell seats at $500 a pop initially, but customers are none the wiser if last minute bookings sell for half of that.  This is a careful art designed to fill a plane.

You cannot have a menu at normal price, and suddenly offer free desserts to casual diners trying to fill the place.

However you could have an early bird session discount, or a late evening supper special, to fill the seats of your venue outside peak dining times.

Your goal in a restaurant must be to fill the venue, and in advanced cases turn over for two to three settings.

Steps to complete this are not difficult, but must be focused on at all times.

Specific criteria and conditions must be planned, to ensure that your business can operate to maximum efficiency.  Make sure that staff understand these, and that they are communicated to customers.

Points to remember are:

1.     Be wary of large groups.  A booking of 20 is fantastic, but not if only five people turn up, and worse still, those five people ask for the 15 remaining seats to be held “we think more people are coming….”  Those empty seats are lost revenue, so make sure you control these aspects.

2.     Always do a table plan before service, transferring key facts from your reservations diary/system.

3.     Run your service to a sequence, meaning that within 60-90 minutes, a customer has had the first stage (sitting down and receiving the menu) through to the last stage (coffee, desserts and bill presentation).  Again processes can compliment this.  If customers want to hang around, suggest a coffee or post dinner drink in the bar.

4.     Always keep the kitchen informed.  It will all turn to custard if meals cannot come out fast enough.  Part of any reservations system is never stacking bookings in one time period.

Revenue management is a professional art and one that is unfortunately neglected in modern hospitality.

Be aware of how this can impact on your business, and your bottom line will grow accordingly.

How to make a good/great restaurant, and prevent a bad one: THE MENU

The menu is the foundation to every good eating establishment, most commonly referred to as a restaurant or a café.


Service, surroundings, atmosphere and beverages all are crucial to such a venue. The staff is critical as well, and in this never should there be inequality between front and back of house, as they are both similarly important to the running of an operation - especially when it comes to the menu.

But a customer comes into a restaurant for a key reason.

They are hungry. They need to eat.

This is why hospitality is a crucial (and should be a successful) business in all of its guises, because of the fulfilment of a primeval requirement for all humanity!

The design of a menu is crucial, and it does not just apply to what is actually served - but everything from its initial creation, through to the customer ordering, to the preparation of the meals, to the eventual consumption and (hopefully!) satisfaction of the individual eating it.

So let’s break it down into the initial steps.

CREATING THE MENU

Never make the mistake of just thinking you want to serve a particular item and create the menu accordingly. While a specific idea forms the basis of your menu (a streak house, a burger café, etc) the specifics need to be mapped out rather than just making a decision without dissecting the process of the menu creation.

In building a menu around a specific idea, bear in mind the associated links with it. If you want to serve Asian food, doing so in a cowboy western theme environment with staff wearing butchers aprons wouldn’t really make sense.

So think of the following

1. Why do YOU want to serve this food? Do you have an affinity with it, it is part of your culture, or are you just really good at making it?

2. Why would your CUSTOMERS want this food? Selling ox tongue and lamb kidneys might be your dream, but would people really eat it?

3. How easy would it be for you to SOURCE this food? Make sure that you can obtain the food you are after, keeping in mind costs and how easily you can get it. This is crucial, because you can also advertise how you source it if it is unique, local produce, etc.

4. Is this a common idea that COMPETITORS already do? Opening a burger restaurant is a great example, because you instantly compete with the Mcdonalds. If you are to do serve food that is widespread, you have to make sure it stands out.

5. How EASY is the menu to prepare? Do you need highly trained chefs to make it, or is it something that can be prepared with great ease.

6. How DIVERSE is the menu? Multiple options are great, but the more you have the higher your costs. Sometimes the simpler the menu the better it is

7. Will you cater for KIDS? Think of this carefully. Some restaurants prefer to discourage this, but while being a family restaurant increases business, little people don’t spend like big people. But then a lot of big people have little people with them…..

CREATING THE ENGINE THAT DRIVES THE MENU

With the menu idea in mind, then think of what you need to create it, namely the kitchen and the brigade that will prepare the meals.

This is crucial, as with this decision there are the associated costs for food, kitchen labour, on-costs and of course wastage.

So to create the menu, with your “engine” in mind, never forget

THE APPLIANCES: You can’t run an efficient Asian themed menu without at least a good wok, and ideally a teppan and other such specialty equipment. Cutting corners in this area can handicap a business if it grows to a certain level.  You need equipment to match your menu.

Core in this is your fridge/freezer. You would be surprised how many capable businesses have failed because their central storage facility has broken down.

Secondary is your primary cooking source, be it your oven, deep fryer or grill. An efficient, well maintained platform ensures your business is in good hands. If you are grilling, and have a 200 seat restaurant, you will need a big grill!

THE KITCHEN STAFF: All kitchens or back of house teams need a leader. Be it an executive chef, a head chef or kitchen manager, someone needs to take ultimate responsibility.

If you don’t need to get carried away - don’t. Sometimes a boss, a backup and a good crew is all you need. Others such venues will need Executives, Sous, Chef de Parties, Demi’s, Apprentices and so on.

And never forget the kitchen hands, who might sit at the bottom of the so called pecking order, but are as crucial to any back of house team as any senior chef.

THE STANDARDS AND PROCEDURES: Make sure these are all in place before a single item is cooked. You might not run your kitchen to strict HAACP or quality control deadlines, but there has to be a system.

Some things should be common sense, such as maintaining a par level, dating all items, and having a strict ordering policy. Failure to implement these building blocks will result in your business failing at a later date.

DESIGNING THE ACTUAL MENU ITSELF

Think of all the menus you have seen throughout your life. Some of them have stood out, some have made you regret sitting down in the first place, and others make you salivate at the mouth.

Make sure your menu is:

1. Sturdy. A piece of paper will get ruined. Laminated is good, in a folder is good. But whatever happens, each time a customer gets a menu, it should look brand new.

2. Easy to read. If your menu is advanced and created by a classical chef, make sure things “normal people” might not know about is explained (or the staff know how to explain it). Equally if it is a foreign restaurant, make sure you explain it in the native language of the country it is located in.

3. Make it sound yummy. If your side dish of chips are simply chips – fine. But if you source your potatoes fresh locally, explain it on the menu.

4. Covers all the options. If you don’t want to cater for vegetarians and the like, no worries, but be aware you will lose a percentage of customers. This of course goes both ways.  Equally remember the menu is the guide for the experience, so do you want to match food and wine options as well?

5. Fair and well thought out. Make sure your prices make you money, but don’t cause a customer to instantly think it is too expensive.

MAKE SURE THE FRONT TO BACK SYSTEM IS WORKED OUT

Nothing breaks down a busy service like mistakes between the order takers (front of house) and the order makers (back of house).

Make sure your system is clear and precise, and followed by all team at all times.

Everything must be followed. A great example is the front of house staff calling “ORDER IN”. Make sure this is ALWAYS acknowledged by the kitchen.

Other key aspects include:

1. Time order taken

2. Covers

3. Making a note if details look crossed. If there are four covers and only three mains, explain this as you hand the order in.

4. Kitchen gets a copy, front of house gets a copy, cashier gets a copy.  Whether it is handwritten or computer generated, make sure all the right parties get the information.

But key amongst this all is the time honoured art of REPEATING THE ORDER TO THE CUSTOMER. Never forget to do this, and half of any such issues will be avoided, guaranteed.

TRAINING YOUR SERVING/FRONT OF HOUSE STAFF

Remember, for all the planning and execution of your kitchen and menu, it is your front of house team that will take the orders.

They are the sales team, so they need to know the menu and understand all aspects of it. Make sure that there are procedures to ensure that they can perhaps taste items (a staff meeting with menu explanation, or order discounted meals to try their favourites).

You can have the finest goods/products/items in the world, but they will never be sold in a way to make the business money without the front line (front of house team) knowing what they are, how to make them seem appealing to the guests, and be an efficient link between the front and back divisions of the team.

How to make a good/great restaurant, and prevent a bad restaurant: Staffing

It was with mixed feelings that I watched a series of shows lately on improving poor restaurants, and with some disappointment I noticed that the formula was far too similar to Gordon Ramsay’s Kitchen Nightmares.


The big gun goes in, eats a meal, confronts the manager and/or chef and/or owner, then with furious gusto and overly dramatic musical score, sets about making a heap of changes.

As I am watching this, I am again stunned by how an entire industry seems to appear to many as an easy and simple profession that anybody can waltz in and set up, without the proper or efficient guidance.

As good as some of these shows are, they are about fixing.

For us, it needs to be about prevention.

So I thought that for hospitality improvement, we would take this step one further, and actually focus on each step one by one. More to the point, we would look at the prevention of what is often the rot for a bad restaurant before it even begins.

Naturally I don’t profess to be a psychologist, but problems in a restaurant are like problems in life.

If they are not confronted or acknowledged, they will get worse until the most terrible nadir sets in and no-one can actually see the problem (which ironically has become glaring at this point). Furthermore, if the problem is covered up or ignored, it then becomes so deep that it will ultimately spread to affect the entire setup.

Case in point a poorly designed menu. This leads to slow sales, rising food costs, the disillusioning of the kitchen team, no interest in the floor staff selling the dish, and eventually the destruction of the entire business.

So to start, let’s look at the core foundation of any business, the people.

The first key to recruitment is deciding what exactly the job is, and what needs to be done. Often the most sure-fire way of setting this up is by compiling a job description. Unfortunately for hospitality such a crucial piece of documentation is often over-looked, but it should not be as it is such a valuable tool.

Used properly it not only tells us what we are looking for in a prospective employee, but makes sure that the new team member knows exactly what is required from them. This can be taken further and implemented via a sign off, to give some level of informal protection to the business.

Try to make this the platform of your staffing process.

Next is to hunt down the employee.

There are two ways to do this, either by sourcing yourself, or using a recruitment agency.

Agencies have the advantage, irrespective of their core function (agencies, headhunters, niche recruiters, outsourced HR companies) of doing all the hard work for you.  They do however come at a cost.

They are ideal for owners.

Personally though, I find adding another link to the chain to be a problem at times, essentially by using a recruiter you are adding a middle person when really a manager should have the ability to do this his/her self.

If you do it yourself, you need to source the potential employee via advertising. A popular medium now is the internet, although newspapers are still a big traffic driver. There is also the option of using niche styled venues, such as putting the position up in the local hospitality college. I have found the latter to be highly effective.

However, this does mean you could potentially attract hundreds of resumes and you will need to screen them.

To do this with a little more ease, make sure you are specific on your job advertisement. Keep it simple, make it abundantly clear as to your requirements, and think of the job applicants and put a comment such as “only shortlisted candidates will be contacted” and so forth.

Next is to screen, and ensure you select the right person for your style, your team and your venue .

As above key is the job description, but ensure that you know exactly what type of person you are trying to attract.

Get a person who will fit into your ethos, and make sure that you understand the consequences of hiring particular people, whether they are students, backpackers, look a particular way, and so forth.

The best restaurants are staffed by the best people, but it only takes one or two bad eggs (poor workers, trouble makers, back stabbers, etc) to de-stabilise a venue.

Often, an interview may not truly answer the question as to an individuals suitability, so don’t be afraid to get potential team in for a trial, but if you do, make sure you have designed criteria for such a process – including if they get paid, what they should be doing, and so forth.

Recruitment and hiring is a series of processes, if one is flawed, then the whole act can fall apart. 

But ultimately, always put the attention into recruitment, the hiring, and then the initial steps (the first week or two) to ensure the employee is a success.

Good recruitment is ultimately about time invested, and this in turn is a valid step in ensuring your restaurant can be great.

To read some relevent posts, check this piece out about the first investment for the employee
http://www.hospitalityimprovement.com/2009/04/hospitality-training-introduction.html

And this regarding training for waiters/waitresses (f&b attendents, etc)
http://www.hospitalityimprovement.com/2009/04/hospitality-training-waiter-waitress.html

Champagne series part two: The history of the famous sparkling wine

While many believe that we have the French to thank for the most flamboyant alcoholic beverage in the world, it was actually the ancient Romans who planted the first vineyards in the Champagne region.

The word champagne is actually derived from the Italian region of Campania, South of Rome, and champagne is a literal translation from the latin word Campania.

There is little doubt based on current sampling that the vineyards in the area date back nearly two millennium, but the first recorded evidence of plantings are in French accounts belonging to St Remi in the 5th century, the former Bishop of Reims, who famously baptised Clovis I, leading Frankish people (the ancestors to the modern French) to convert to Nicene Christianity.

Early wine was not recognised as champagne, but most commonly was called “vins de reims” in reference to the local rivers.

At first the wine was a pinkish almost pale wine, based on grapes similar to Pinot Noir.

The first case of the wine rising to famous prominence was when French kings were coroneted at the Cathedral of Reims, one of the three major areas in modern day champagne. The first example was in 987, where Hugh Capet (the great) and first King of France from the grandest and oldest European royal house the Capetians, was presented with local wine at grand feasts.

At the time though Burgundy was the dominant wine of France, and the local Champenois (residents of the area) sought to create a vintage to rival the famous region to the South. Flemish merchants passed through the area, and they tried to tempt them with their cheaper wines from the province.

However the climate was too robust to produce a full bodied and confident wine such as the Burgundian wines, with lack of character and aging potential cost the wine.

But the birth of modern champagne was not a purposeful act.

Cold winter temperatures in Champagne halted the fermentation of wine in cellars, which would cause sleeping yeast cells to “reactivate” with the warmer spring and summer months, causing a secondary fermentation. This in turn naturally created carbon dioxide, causing bottles to explode, creating havoc in the cellars.

This was considered a grave error in the winemaking process, and Benedictine monk Dom Pierre Perignon in his early days sought to eradicate the “horror bubbles” from his precious wine.

The famous monk, widely credited with inventing champagne, did not.

Some credit that his successors at the Abbey of Hautvillers (near Eperney and a key location in the 17th century for Champenois) wanted to expand his myth to raise awareness and profile for the church. Dom Groussard is credited with this “falsification” in 1821.

However he (Perignon) did impose a careful set of principles which were published in 1718. It established that Pinot Noir should be the core wine as white grapes had a tendency to re-ferment too easily. Vines were not allowed to grow very large so the concentration and quality was enhanced, and unlike early tradition, grapes were not trodden on but pressed. He also pressed for winemaking to be achieved as naturally as possible.

In the middle ages, Champenoise were said to even try added juice such as Elderberries to try and distinguish their wine from Burgundy vintages.

The modern grandfather of Champagne was actually Christopher Merret, who practiced glassmaking, medicine, was a renowned librarian and had a keen interest in minerals. In 1662 he presented a paper called “Some Observations concerning the Ordering of Wines” to the Royal Society. Here it was unearthed that winemakers could add sugar and/or molasses to make wines sparkling.

In modern terms this is the addition of dosage to stimulate a secondary fermentation on purpose, rather than the accidental one caused hundreds of years ago in the cellars of the region of Champagne.

In those cellars, if the bottles had been stronger than perhaps Champagne as we know it would have been invented far earlier. However Sir Robert Mansell produced glass in England early in the 17th century and used coal powered production to produce stronger wine bottles. This all occurred long before Dom Perignon was said to have created the wine, largely recognised to have happened in 1697.

Champagne series part one: Where it is (and where the major houses are)

It is with great pleasure that hospitality improvement begins to delve into arguably the most illustrious beverage that exists on the planet, the wonderful sparkling wine, known as “bubbles” right through to the premier class of the grape, known as Champagne.

For the record, Champagne refers to the wine produced in the northeast “historical” province of France, approximately 100 miles east of Paris.

Bear with me, as the next paragraph or two will sound confusing, as the French refer to their geographic areas a little differently to other countries.

The area itself (the old province of Champagne) is now known as Champagne-Ardenne, and is one of the 26 regions (22 of which are situated in France, four are overseas) of France. Within its borders are four departments (the areas within a region), that of Aube, Ardennes, Haute-Marne, and Marne.

The most notable department is Marne, containing the bulk of the Champagne vineyards that are famous around the world. Within Marne is the sub-prefectures (the area within a department!) of Épernay, Reims, Sainte-Menehould and Vitry-le-Francois.

Épernay is regarded as the central “entrepot” of champagne (meaning literally warehouse or trading post), or more informally regarded to as the capital of Champagne. The most famous street in the city is the Avenue de Champagne, where most of the leading producers have a significant manifestation.

The major champagne houses based in Épernay are (with their premium label, or Cuvee de prestige):

Besserat de Bellefon - Cuvée des Moines
Boizel - Joyau de France
Charles Lafitte - Orgueil de France
De Castellane - Commodore
Gauthier - Grande Réserve Brut
Heidsieck & Co Monopole - Diamant Bleu
Moët & Chandon - Dom Pérignon
Perrier-Jouët - Belle Époque
Pol Roger - Sir Winston Churchill

Reims, the largest city in the region, is most famous for its cathedral where it served for the coronation of French kings.

Other sources (it is not official) regard Reims as the capital of Champagne given that it is the largest city in the area. There are approximately 200,000 people in the city. But most of the big champagne houses, regarded to as les grandes marques, have their headquarters in the city.

The major champagne houses based in Reims are:

Bruno Paillard - Nec Plus Ultra
Chanoine Frères - Gamme Tsarine
Charles de Cazanove - Stradivarius
Charles Heidsieck - Blanc des Millénaires
Henri Abelé - Sourire de Reims
Henriot - Cuvée des Enchanteleurs
Krug - Krug (Vintage) and Clos du Mesnil
Lanson - Noble Cuvée
Louis Roederer - Cristal
Mumm - Mumm de Cramant
Piper-Heidsieck - Rare
Pommery - Cuvée Lyesse
Taittinger - Comtes de Champagne
Veuve Clicquot Ponsardin - La Grande Dame

The third town of the “holy trinity” if you were is the small town of Ay. The home of many major champagne houses including:

Ayala - Grande Cuvée
Bollinger - Vieilles Vignes Françaises (Vintage) and R.D. (Récemment Dégorgé)
Deutz - Amour de Deutz
Gosset - Celebris (Vintage) and Grand Millésime

Other regions (or communes as they are called in France [a commune is the lowest administrative level with regions being the highest] but a commune could effectively be a small village of 50 people, right up to Paris itself, which is classed as such!) include:

Mareuil-sur-Ay, which is home to the famous house Billecart-Salmon
Ludes which houses the Canard-Duchêne brand
Chigny-les-Roses, home of the Canard-Duchêne house
Urville, which has the family owned house Drappier
Tours-sur-Marne, home of Laurent-Perrier
Buxeuil, home of Moutard-Diligent
Chouilly, where the Nicolas Feuillatte house is located (one of the youngest houses)
Rilly-la-Montagne, where Vilmart is located
 
In part two of the Champagne series, we will look at the history of the famous region and wine