More than most, foodservice businesses have always been subject to ever-changing influences, good and bad. Customers now have a never-ending appetite for trying new cuisines and fresh produce, while vegetarianism and veganism are very much in the mainstream, rather than being seen historically as quaint add-ons. Enthusiasm for eating out partly runs off the back of the media attention that food and drink now commands in the UK. Endless cooking quiz shows, food and drink documentaries and press try to satisfy the hunger of the mass appeal. However, this new knowledge can work both ways in foodservice; on the plus side customers will be more likely to eat out but at the same time they will be more discerning, expecting to exercise their newfound knowledge. This is where pubs and restaurants need to keep ahead of the game ensuring there are no items on the menu that customers could simply cook at home. Restaurants need to characterise their menus to demonstrate inventiveness, produce great tasting food made with technical skill and serve it in an appealing setting.
From 2013 to 2018 UK foodservice turnover boomed as it increased by almost £3billion per annum. However, from then on shadows loomed in the form of rising wholesale costs, falling customer spend and a generally oversaturated market, as more and more casual dining brands, such as pizza, burger, and chicken muscled in.
In 2020, the Office for National Statistics calculated the UK had 39,230 restaurants and mobile foodservice businesses operating, which had an average turnover span of £100,000 to £249,999 during that year. A total of 2,010 businesses generated between £1m and £2m revenue, and 60 enterprises accounted for more than £50m revenue, with most of the casual dining brands in the latter.
Net profit margins are sliced thinner than ever with 3 to 5% the norm now, less than half of the routine 10% the industry often previously achieved. Brexit and COVID19 have naturally had a profound effect with many businesses forced to raise wages simply to keep open. Some restaurant owners have been tempted to raise prices but with competition so fierce this can prove risky. What are the alternatives? Minimising food wastage from storage and prep, buying wholesale effectively and shopping around, storing produce efficiently, controlling portion sizes and rostering staff effectively so they are not overloaded during shifts and unable to upsell.
More inventive pub and restaurant owners have realised the benefits of cutting costs by selling dishes, which combine lower ingredient and/or labour costs. These dishes can then be presented as a premium dish at a higher price. This effectively increases margins at every step of production and service. Some of the most popular and profitable dishes within these criteria include guacamole, pasta, pizza, risotto, and ice-cream/sorbet/sundaes.
The following Crowbond products all fit the template of low ingredient and low labour cost, while at the same time can be listed on the menu as a premium dish:
Frozen guacamole 1kg /£7.80 6 portions at Menu price £4.50 (71% gross profit).
Frozen Falafel 84 pieces/ £14.99 21 portions. Menu price £6.00 (88% gross profit).
Burrata 100g/£1.05 1 portion. Menu price £7.00 (85% gross profit).
Italian Smoked Pork Knuckle (Stinco Arrosto Con Astuccio) £4.80 1 portion. Menu price £16.50 (71.0% gross profit).
Whole Cauliflower Vegan Roast £1.50 1 portion. Menu price £13.50
(88% gross profit).
McCain Sure Crisp Chips 9kg/£13.99 1 portion 31p. Menu price £4.00 (92% gross profit).
Juicing Oranges 15kg/£18.20 1 portion 73p. Menu price £3.75 (81% gross profit).
There are several other high-profit menu items, which diners perceive as premium:
Charcuterie Boards - where minimum labour is used to present a high-quality product, such as serrano or prosciutto, along with Gorgonzola DOP Dolce Blue Cheese or Grana Padano.
Nose to tail thinking - customers enjoy seeing a menu that highlights nose to tail thinking. It creates an air of authenticity, demonstrates resourcefulness, creativity, and economy. And it doesn’t mean you have to be up to your elbows in offal every day! For example, using fresh produce such as cheaper cuts for braises or less well-known fish species. Meat bones, fishbones and seafood shells can be transformed into delicious stock for casseroles and bisques. Again, the emphasis is on creating a dish, which is perceived as high value, and which can consequently carry a higher price.
Items minimising waste - every kitchen has vegetables left over after service. The best of these can be easily converted into soup but to ensure it is high-quality you need a few additions, or it will simply look like a lacklustre, leftover vegetable soup. A little white wine,
finishing the soup with cream and a few croutons will convert it to a premium starter at little cost.
Perceived value items – freshly made pasta and pizza always hold plenty of perceived value for customers. Both are reasonably quick and inexpensive to make and titled on the menu as ‘handmade’ or ‘artisan’ will have good appeal.
Side Dishes – it’s not unusual for pubs and restaurants to include vegetables or salad with a course, however there is still a good opportunity to offer a special or seasonal side dish, to improve customer spend. Customers enjoy personalising their choices because they can express their preferences and feel part of the decision-making process. A popular, well cooked, and well-presented side dish will become a routine part of the ordering process for repeat customers and create repeat revenue in the process.
Without doubt foodservice is more difficult now than at any time in the past 20 years. Any safety valves, in the form of cost savings, foodservice owners can build into their business will help to allay the pressures coming from all sides. Creating a mindset of cost saving and applying this from ordering right through to the bill going on the table will lead to any number of efficiencies.