With the rate of inflation peaking and food prices likely to stay high in the immediate future, Oliver Hall, managing director at food procurement experts, allmanhall (https://allmanhall.co.uk) gives advice on recommended actions that will help maximise food and catering budgets, and lessen the impact of food inflation.
A good starting point is an accurate costing model. This provides a comprehensive understanding of all the contributing costs across the catering operation. Full visibility of the fixed and especially variable (controllable) costs is essential.
Keeping track of this data, and nimbly controlling variable costs whilst also battling increasing food prices can protect the foodservice operation from excessive spending on ingredients, labour, and energy costs.
More specific areas of the catering operation to consider are;
1. Supply chain management
How the supply chain is managed can help ease food inflation costs. Re-appraise your approach, from tendering, to operating dual supply in some cases, and consolidating your suppliers in others.
The services of a specialist procurement partner such as allmanhall has never been so important. A procurement expert will provide an ability to negotiate down proposed supplier price increases on your behalf. They’ll also offer advice from product alternatives to range management…
2. Range management
This involves undertaking a review of product lists to achieve focused, well-negotiated buying lists, comprised of the products needed to operate effectively and reduce your ‘tail’ (the lesser needed / non-essential items).
3. Cost to serve
This is the cost for a supplier to make a delivery. You can reduce it by limiting the number of deliveries each week; increasing the value of each delivery; reducing the need for your supplier to split cases and reducing their cost to serve you, thereby reducing prices. You may also benefit from drop discounts by consolidating deliveries. Again, a procurement expert will be able to advise.
Operational savings and efficiencies:
Now may be a perfect opportunity to revisit some of the practices and processes in your catering team, with a real focus on the financial outcomes. There could be some very tangible benefits to be gained by making some small adjustments, from upskilling to waste, and from equipment investment to menu planning.
You may decide to review and improve your team’s skills. A chef who is engaged, skilled and motivated will be willing and able to cook food, which can be more cost effective than using pre-packaged products. We are very mindful of the challenges currently associated with labour and recruitment, but this makes it even more important to develop and retain the team you do have.
2. Food waste
Reducing waste through supply chain activity and catering operations will result in food cost savings and have a positive impact when it comes to sustainability, and the health of the planet. Some strategies that can be implemented include;
· Avoid overbuying stock – make sure you only purchase what you need, especially when it comes to perishable products.
· Store food correctly – ensure food is being stored at the correct temperature, and that fridges and freezers are operating at the correct temperatures, rotating stock appropriately, especially perishable items.
· Label food correctly – if food is decanted into different containers for storage then make sure they are clearly labelled with allergens, date information and a product description. Keeping stock organised makes it much easier to keep track on what you have and what needs using!
· Keep a stock inventory – keeping a detailed list of the foods in all storage areas including their use by or best before dates.
· Ensure deliveries match orders – make sure you only accept exactly what you ordered, and that the product is well within its use by date, and of good quality.
· Portion Control – make sure you portion specification matches the requirement of your diner. It is estimated that over a quarter of diners in a foodservice setting leave food on their plate at the end of their meal. What a waste of both food and money!
· Don’t overextend your menu – keep it simple! The bigger and more extensive the menu the more stock needed with a heightened risk of unnecessary waste.
It seems counter intuitive but now could be the time to consider your long-term capital investment strategy with regards to equipment. Using modern equipment can really drive cost efficiencies and mean that the initial investment quickly reaps returns and pays for itself.
4. Recipe and menu engineering
Understanding changes in product pricing helps to influence your recipes and menus. Having the flexibility to review and adapt menus quickly, utilising a range of alternative ingredients will help alleviate rising prices. For example, substituting certain meats with less expensive cuts or even switching to plant-based recipes, will have the benefit of lower costs. A review of every ingredient in a recipe, to establish the total cost and yield of each dish, will allow strategic purchasing with the resulting financial benefits.
Increasing in-house preparation and batch cooking will help, but a cost benefit analysis is still recommended, as it is important to factor in additional costs of doing this, such as energy and labour.
Finally, communicating and sharing the challenges associated with rising food costs with your team and, importantly, your diners, is really important. This will help to provide further understanding and will support any menu changes or required tariff increases you are compelled to introduce.