Your New Menu: Managing Rising Food and Beverage Costs in Hospitality
We know that it’s a particularly tough time for the hospitality sector when it comes to costs. It feels like everything is on the increase: VAT rising from 12.5% to 20%; unprecedented spikes in energy bills; higher staff costs due to climbing demand.
It’s an incredibly tough time, but hospitality businesses are not ones for backing away from a challenge. Right now, establishments must take advantage of any opportunities to reduce expenses and optimise services.
We at LSG Purchasing help our partners to save on a range of expenses, but one step you can take now is to reengineer your menu. As food prices increase, little changes can make a big difference, so take the time now to analyse your food offering.
With a few small changes, it’s possible to create a menu that helps controls the cost of goods, attracts more customers and delivers bigger profit margins.
The Current Trends in Food and Drink
The Bidfoods 2022 Trends report has outlined multiple areas that are going to significantly influence where consumers choose to spend their time and money. Some of the most important aspects that will impact all food and drink establishments include:
Unique Experiences
According to Bidfood’s report, 44% of customers would likely spend more on a dining experience if it was unique.
Now more than ever before, people want to go out for a unique experience they couldn’t have at home or anywhere else. Draught beer and cocktails just aren’t the same at home! Themed outlets have had particular joy thanks to this trend, but similar success can be found by offering a ‘wow factor’ through your food and drink.
A simple way to add this to your menu right now is to make sure that you’re presenting your food in the best possible way. Market your food with attractive naming and descriptions to ensure you create that high-end feel. Bidfood has suggested that how you describe the dish on your menu does half the job for you. Adding descriptions like “with fresh rustic garlic sourdough” really makes a dish sound high quality, but the reality is that it’s just adding a cost effective garlic bread to the side of the dish. Easy win! Then, investing in unique tableware (bowls, plates etc.) and training staff in how to best layout and present food can make a noticeable difference to your customer’s experience.
Ethics and Sustainability
According to the report, almost 50% of people now make decisions on where to eat based on ethical considerations. Customers are willing to go out of their way and support establishments that support their staff and communities, so make sure your efforts are clear for customers to see.
Supporting local causes by hosting themed nights – like a quiz with a simple food and drinks package – is a hugely effective way to bring in new customers and strengthen your reputation. If you use local produce, make sure this is highlighted on your menu.
Further on the point of local produce, a growing understanding of sustainability is also leading people to engage in more eco-friendly eating habits. There is a growing demand for vegan options, while customers are also eager to waste less when dining out.
Vegan food doesn’t need to be complicated. Many existing meals can be made vegan or vegetarian with a few alterations. Also, with a lack of expensive protein, many vegan options offer the potential for lower costs and higher margins.
Digital Opportunities
Everyone has got increasingly comfortable with using digital services over the last few years. Bringing in more digital infrastructure, such as through menus, ordering and payments, can provide the opportunity for more operational savings, particularly considering the ongoing staff shortages in hospitality.
However, there is a balance to be found when it comes to digital. 2 in 5 people feel that they shouldn’t have to order online at a premium venue, according to the report, highlighting the continued importance of trained and happy staff in delivering a great customer experience.
Personal Health
The COVID pandemic hasn’t just driven digital adoption, it’s also transformed how we care for ourselves.
Bidfood’s research revealed that 8 in 10 people consciously look for healthy options when dining out, and some customers would consider leaving if an establishment didn’t provide any.
For some, eating healthy means counting calories, whereas for others it simply means low or no alcohol drinks.
If you’re not sure where to start with adding health to your menu, consider what you already have and present it in a new way. Marketing your healthiest foods and meals with health-conscious ingredients with new descriptions can help you appeal to this growing crowd without having to make huge changes.
Combining healthy meals to alcohol-free drinks can also help you to create a premium offering, allowing you to generate more spending per head. Items such as mocktails can deliver fantastic margins and also feed into creating the overall experience that customers are willing to pay more to enjoy.
Coffee is also an easy win for establishments, and with the help of LSG Purchasing, our members can enjoy a discount of up to 10% off all Rijo42 coffee machines.
Simple Steps for Improving Food and Beverage Profits
Any changes to the menu should be made with the trends mentioned above at the forefront. If you’re not sure where to start, here are some simple, actionable ideas to consider right now:
Maximise existing products – Make sure your existing food and drink are as premium as possible to maximise existing profit potential. Even little tweaks to product names and descriptions can make a difference in what you can charge.
Optimise expensive ingredients – Make sure your expensive proteins go as far as they can. Supplement or swap expensive ingredients with cheaper cuts to unlock greater sales margins.
Cater to new tastes – Ensure you have vegan and non-alcoholic options to cater to new demands. Many dishes can be made vegan with a few tweaks, while a lack of protein can make these items high-margin choices.
Offer more easy wins – Consider adding products with strong profit margins to your menu, such as coffee and ice cream. A kids’ menu is another easy win for your establishment, allowing you to generate more income with minimal changes.
While changing your menu can sometimes feel like a daunting prospect, making changes now will help set your business up for a successful Spring and Summer period. If you’re interested in learning more about how our purchasing solutions could help you unlock further savings, why not speak to our team today?