Lesson 8 Sales and Marketing

Lesson 9: Sales and Marketing 9.7 Food costing

• Trying to control your food costs is very challenging because of the perishability of the product, the
• unpredictability of the business and customer’s selections, the yields obtained from food products,
• your staff and your equipment.
• Portion cost and plate cost: These come from the price we pay for our
• products, the yield on the product, the recipe cost, portion size and cost, garnish and labour
• must also be considered.
• How many choices do you offer ? Dopson & Hayes (2011) contend this answer depends on ‘the
• operation, the skill level of employees, and the level of menu variety management feels is necessary to
• properly service the guests’
• Food cost percentage: (To establish the relationship between cost and price).
• Food cost percentage for individual menu items or the overall food sales: Formula: Food cost % menu item = cost of
• Food / menu price x 100. e.g Irish Stew: Cost €3.75, menu price €12.50 Food cost % = 3.75/12.5 x 100 = 30%.
• Food cost percentage to project a food sales price: Sales price = cost of food / cost % . e.g Irish Stew: cost €3.75,
• cost % = 30%. €3.75 / 30% = €12.50.
• Projecting food selling prices: (using a multiplier to project food items sales price
• includes VAT) Chapter 9 – p. 179 Table 9.1

Lesson 9: Sales and Marketing 9.8 Control and calculation of costs to achieve profit margins

• The pricing of the food and beverages is perhaps one of the most important
• mathematical functions we perform in the bar, consider initially;
• your bar companies formation and the owners philosophy, ability to drive the best deals through purchasing power, value and beliefs of the company founder in supporting certain local or national food and drinks companies
• scale selling prices to different areas of the bar premises to achieve performance yields, late bars, restaurant, night clubs, private bars
• low yields from recommended retail price items
• vat levels on drink, food, and cigarettes
• price discounts from companies given to major key account holders
• free goods, deals for bulk buying or new goods.