A menu is not just a hand-out showcasing dishes and their price points; it is a first hand communication medium between consumers and the restaurant. Planning, re-designing or revamping the menu is a strategic decision and essential for a restaurateur, not just to stay in sync with the changing times, but also to efficiently manage and control the cost of food production, especially during an economic slowdown. Juhi Sharma meets several chefs to find out the art and science behind menu engineering and what it entails
Rajat Dixit Senior Sous Chef, Eggspectation, Jaypee Greens Golf and Spa
Last year, Eggspectation’s menu was relaunched with over 120 dishes, offering a wide variety of food for Western clients and a better range of dishes to suit the Indian palate. The menu has a lot of influence from the US, Canada, Mexico and Italy. This change has been one of the major revamps for us because we have also changed the colour and look of the menu.
Guests’ comments on the new the menu card include ‘very stylish’ and ‘urbane’. They have appreciated our range of salads and the newly added section of flat breads. The oven roasted fish has been termed ‘the best fish dish have ever had’ by most of them, and local dishes such as Poutiness is a favourite. We have seen a growth in revenue since the menu revamp, even though there could be other factors as well. But the fact that we have a lot of repeat customers suggests the success of the new menu.
Festival-specific menus are designed such that people can enjoy the most traditional dishes related to the celebration. These menus should have all the important dishes as guests with culinary knowledge about the festival will actually come to the restaurant just to try these dishes. For instance, a menu celebrating Onam, cannot miss paysam, and gujiya has to be there in the special menu for Holi. These menus could easily double a restaurant’s sale, but more than that, it is an opportunity to advertise the restaurant and create a brand recall. With so many restaurants opening every other day, festivals offer a good reason to promote the restaurant. During food festivals, chefs get a chance to view regional and festival-special cuisines, and dishes which get the maximum applause are considered by them for their next menu plan.
The Indian market is very price sensitive and planning the price points on a menu is the most crucial. In case of a regular menu, factors like target group, cost of production, etc, are considered. In case of a festival or a limited edition promotional menu, pricing depends on the objective of the promotion and the kind of promotion. Pricing is dependent on the cuisine being offered (international or Indian), whether local or imported ingredients are being used, what kind of regional market one is in, and so on. Usually, no one does limited edition menus for a huge profit margin; in fact, the margin of profit reduces to almost half, but they are important for the marketing of the restaurant.
Menu planning starts from a combination of two factors: the stakeholder’s vision and the financial feasibility studies with respect to the cost and revenues for a restaurant in a particular region. As a hospitality consultant, we can never design a menu with a lot of expensive dishes where the owner wants a fast operating break-even. Likewise, we have to keep the clientele and the restaurant theme in consideration while customising the menu.
In many ways, menu revamp is tougher than the original menu designing. The consultant tries to fix an already successful menu so as to keep the ‘pep’ factor alive. The art of the menu re-design is a subjective analysis – deciding to keep few items from the ‘hotsell’ list, while also deciding to scrap or re-innovate few dishes.The science behind menu re-designing implies being contemporary with technology and operations software. In this industry, there is wastage and leakage at various levels in the supply chain, which if managed by advanced operational softwares and stringent control, help in increasing profitability to 5 to 8 percent.
Over 50 percent of guests in any restaurant are repeat guests. So, we cannot afford to serve exactly the same menu for consecutive years. Unless excitement and novelty in the menu are combined with a few USP dishes of the place, any menu will become boring and repetitive for guests and they will start exploring newer options. It is a necessity in a restaurant that is not doing well in comparison to its competitors, inspite of all other factors being favourable. Though there is no hard and fast rule, but at least 50 percent of the menu should generally be changed every 12 to 18 months. These figures have been derived after extensive study of the total revenue of restaurants who went in for regular professional update of menu vis-à-vis the restaurants who were slow in changing their menu.
Menu revamp serves the purpose of retaining loyal customers and attracting new customers. Based on my experience, a revamped menu has a lag effect of 3-4 months; thereafter it leads to an increase of almost 15 to 20 percent in the monthly sales revenue for a few months, followed by 4 to 15 percent, after which it tends to stabilise at 5 to 8 percent incremental revenue.
Limited edition and festival-special menu are another set of menus that have become prominent today. A limited edition menu is expensive; it is a short haul menu with some excerpts from other specialty restaurants in the same field. For the menu to be successful, three aspects are vital while planning: financing the menu design, marketing it, and its strategy behind If, When, and How. In fact, a few standalone large restaurants hire event management companies to anchor the entire effort and increase their reach in various ways, such as promotions through FM channels, direct pitching in the market place, and incentivising customers as well as the sales staff.
Special menu for various festivals is quite easy actually as most consultants and chefs are masters in various regional Indian cuisines. Since most Indian festivals are associated with a particular religion or a region, recipe design on major festivals is quick and easy. Nowadays, the USP is to make some festival dishes in a traditional home-style, and presenting it in the same manner. For example, the ‘Navratra-special thalis’ at restaurants serve typical home-cooked food to be eaten while fasting. However, during some festivals, especially the ones belonging to religions such as Zorashtrianism, the food that is consumed requires specific expertise and very limited chefs can prepare them. I personally believe that such dishes should be avoided in the menu.
Festival specials can lead to an incremental sale of up to 30 to 50 percent. But we have to keep two aspects in mind: special menus lead to a dip in sales of the regular menu, which brings down sales marginally. The festival special still carries a lower risk as compared to the limited edition menus as Indians like to eat out on festivals, but limited edition menus need to attract customers.
In case a limited edition or festive menu gets a good response, it’s always prudent to bring a few hot selling items into the regular menu, either as a part of the next menu re-design, or standardise the hot selling dishes and use the recipes in the next festive season or limited edition menu.
Menu pricing is another important consideration. For restaurants running in 4- or 5-star hotels, pricing is not a challenge as 70 percent of the clientele is largely price insensitive. But in a food court restaurant, the pricing has to be very competitive, with major focus being on volumes than on margins per dish. For standalone restaurants, pricing is a delicate aspect. We sometimes decide to keep minimal margins per serving for a hot selling item (akin to the cash cow concept in the industry), but, at the same time, we advise much higher margins on few other dishes. Again, pricing for a standalone restaurant requires in-depth analysis of the competition and the target segment. Specialty restaurants have a much higher margin as compared to a typical multi-cuisine restaurant that targets the youth/college-going comsumer.
Sudhir Pai Executive Chef, Holiday Inn Mumbai International Airport
While following a menu revamp, 50 percent of the popular items should be retained unless the whole concept of the restaurant is being changed. Menu re-designing involves analysing menu worksheets that helps one in understanding the relative profitability and popularity of menu items. This process allows managers, owners and chefs to recognise the items that they want to sell (the most popular and profitable ones) and to eliminate those that do not contribute to the restaurant’s bottomline. The process also allows for more subtle menu planning by revealing, for example, a popular but non-profitable item, which can be re-engineered to provide more profit.
Menu engineering places more emphasis on the concept of contribution margin as opposed to food cost percentage. The contribution margin or gross profit of a menu item is its selling price less its food cost. For instance, a steak dinner that costs $8.00 and sells for $20.00 has a gross profit of $14.00, and food cost is 40 percent. In contrast, a pasta dinner that costs $2.00 and sells for $10.00, resulting in a gross profit of $8.00, has a 20 percent food cost. So, one needs to decide based on the calculations and analysis, which item to sell?
Shireesh Singh Corporate Executive Chef, Indus Grill
Primarily, it is a restaurant policy to keep renewing its menu, based on constructive consumer feedback. Though there are always popular dishes, a new menu offers a fresh take on the old dishes and cuts through the monotony.
With menu re-do, one just doesn’t add a new set of dishes but even removes the non-performing ones. The art of menu revamp refers to the creativity of chefs who innovate new dishes, following the trends. Success of the re-engineered menu can be analysed through comparative study of the sales along with feedback from guests.
Festival-special menu is designed to offer occasion-specific food or dishes, and the variety is based on various factors. These menus mostly aid in increasing footfalls in the restaurant.
Anupam SomConsultant Chef, Panach Group
A menu is revamped to re-energise the brand with a combination that offers new recipes and design to improve overall guest satisfactions scores. The procedure entails, removing non-moving items from the menu. The list of items is prepared from customers’ feedback, then we analyse the food cost. If customers in the catchment think the menu is too expensive, pricier items, such as lobster, king prawn, and portion cuts of New Zealand lamb can be replaced with more cost effective items such as Himalayan salt crusted lamb shank, which will appeal to the palate within a budget. The products developed should increase guest satisfaction scores by 10 percent.
Menu revamp is planned mainly post financial losses, or when a restaurant chain fails to achieve its sales target. Established restaurants revamp their menu to keep up with the times. With the help of a comprehensive operations analysis, aiming to improve unit level productivity, increase average bill size, and guest service, along with multiple menu innovation assignments, we can assess the relaunched menu.
Ashis Rout Executive Chef, Courtyard by Marriott Gurgaon
Menu planning depends on factors such as location of the restaurant, type of customers being targeted, type of organisation, food trends, and availability of customers. It is always important to review your ongoing menu to understand which dish is doing well, which is moving slow, and which is not doing well, to plan refurbishing of the menu. Sometimes, the chef may find it practically difficult to serve a dish, and at times the waiters are not confident enough to sell or promote a dish due to various reasons, thus calling for a menu revamp. Generally, at the end of every month, the performance of each item in the menu is analysed. Looking at the present market condition, renewing a menu adds not more than 6 to 8 percent revenue.
There is another concept called reduced-size restaurant with a limited menu, which primarily implies that items are priced within a specific amount, to emphasise on volume sales. A limited-edition or a special menu is designed for a special occasion, for instance, plum pudding made of alcohol soaked fruits during Christmas, or a south Indian vegetarian menu during Pongal. In case, a limited edition menu gets an overwhelming response from customers, a few of the largest selling items are pulled into the regular menu.
Since these menus always need a specific amount of expense, advertisements and special ingredients, they generate not more than 5 to 7 percent of incremental revenue. But these menus attract customers, drive volume, and build on the reputation of the restaurant.