Menu Analysis & Engineering

HRT383

By
Dr. Ben Dewald
 References

 Mill, Robert Christie (1998) Restaurant Management:

Customers, operations, and employees / Menu Scoring &
Menu Engineering, pp 114-116. Upper Saddle River, N.J. :
Prentice Hall.
 Drysdale, John A. & Jennifer Adams Aldrich (2002).
Profitable menu planning / Chapter 5: Menu Analysis,
pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice
Hall, TX911.3.M45 D79 2002
 CD-ROM TX911.3.M45 D79 2002

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 Objectives

By the completion of this presentation you

should be able to:
 Analyze a menu for profitability
 Apply menu engineering to menu analysis
 Apply menu scoring methods to menu analysis.

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 Important Terms

 Menu engineering  Menu scoring

 Plowhorses  Placement
 Puzzles  Pricing
 Stars
 Dogs

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 Introduction

This presentation explains how to evaluate a

menu
 When measuring a menu to see if it is
successful 2 criteria must be met to declare
it a winner:
1. Must be profitable in terms of individual item
profitability
2. Most profitable item must be selling the best.

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 Stars, Plowhorses,
Puzzles, & Dogs
 1st Method, called menu engineering, developed by
Donald Smith Ph.D., Westin Hotels Distinguished
Professor at Washington State University
 This method rates the menu by measuring each entrée
as to its profitability (gross profit) and its sales. It
then combines these measurements and places each
menu item into one of four classifications.

Do Plow
Puzzle
Star
g Horse

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 Contributing Margin

 Determine the contributing margin (CM) of

each item

Selling Price – Food Cost = Contributing Margin

 CM same as item’s Gross Profit

 Use total food cost (include garnish,
accompaniments served with entrée such as
salad, potatoes, rolls, butter etc.).
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 Contribution Margin
Dollars vs. Food Cost Percentage
Steak Dinner Fish Sandwich Coffee

Selling Price $15.00 $4.00 $0.75

Cost $7.50 $1.00 $0.15

Food Cost % 50% 25% 20%

Cont. Margin $ $7.50 $3.00 $0.60

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 Menu Engineering
(1) (2) (3) (4) (5) (6) (10)
Menu Item Number Item Sales Food Cost Total Total Food C/M
Sold Price Percentage Sales Cost
(2) X (3) (4) X (5)
Chicken 65 $9.95 35 $646.75 $226.36 $6.47

Beef 75 11.95 38 896.25 340.58 7.41

Turkey 90 10.25 31 922.50 285.98 7.07

Filet 55 12.95 45 712.25 320.51 7.12

285 $3,177.75 $1,173.43

(7) Food Cost Percentage: (6) / (5) = 39.93%

(8) Total Contribution to Margin: (5) – (6) =$2,004.32
(9) Average Contribution Margin/ Customer: (8) / (2) = $7.03
(10) Contribution Margin per menu Item: (5) – (6)
(2)
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 Menu Engineering

(11) Average Popularity

80% of the average item sales per entrée:
100 / 4 X 80% = 20%
(12) Popularity of each menu item:
Number of portions sold divided by total number of
meals sold
Chicken: 65 / 285 = 22.8%
Beef: 75 / 285 = 26.3%
Turkey: 90 / 285 = 31.6%
Filet: 55 / 285 = 19.3%

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 Menu Engineering Analysis
100% Plowhorse Star

*Turkey
Popularity (7.07/31.6%)

*Beef
(7.4126.3%)
*Chicken
(6.47/22.8%)
20%
*Filet
(7.12/19.3%)

Dog Puzzle
0 Contribution Margin 7.03 8
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 The Four Key Menu Categories

 Plowhorses are items that are relatively popular but

have a high contribution margin. Items in this
category can have their menu prices increased or
the portion size cut in a attempt to increase CM. If
market is price resistant
 Stars have both high popularity and high CM
 Puzzles have relatively low popularity and high
margins.
 Dogs are both low in popularity and CM

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 Menu Engineering Analysis
100% Plowhorse Star

*Turkey
Popularity (7.07/31.6%)

*Beef
(7.4126.3%)
*Chicken
(6.47/22.8%)
20%
*Filet
(7.12/19.3%)

Dog Puzzle
0 Contribution Margin 7.03 8
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 Menu Scoring

 Method developed by Michael Hurst, Professor of

Restaurant Management at Florida International
University, a restaurant owner and past president of
the NRA.
 Devised to ascertain whether menu changes
(additions, deletions, and price adjustments)
actually improved the profitability of the menu by
comparisons of a menu score.
 One advantage: quick to complete because it does
not track every menu item.
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 Menu Scoring

 Combines profitability and popularity of

menu items to arrive a a consensus score
 The higher the score, the better the menu
 An existing menu can be scored, then
compared with a proposed menu, after sales
for the new menu have been estimated.

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 Menu Scoring
(1) (2) (3) (4) (5) (6)
Menu Item Number Item Sales Food Cost Total Total Food
Sold Price Percentage Sales Cost
(2) X (3) (4) X (5)
Chicken 65 $9.95 35 $646.75 $226.36

Beef 75 11.95 38 896.25 340.58

Turkey 90 10.25 31 922.50 285.98

Filet 55 12.95 45 712.25 320.51

Total 285 $3,177.75 $1,173.43

7) Meal Check Average: 5 / 2 = $11.15
8) Gross Profit: 5 – 6 =$2,004.32
9) Gross Profit %: 8/5 = 63%
10) Gross Profit Average Meal: 7 x 9 = $7.02
11) Total Meals Served: 450
12) Popularity of Meals Analyzed: 2 / 11 = 63%
13) Menu Score:
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HRT x 12 = 4.42 16
 The Higher the Score
the More Profitable the Menu

 This method takes into account not only # of

items sold, but also their contributing profit

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 Placement

 Two Schools of thought

1. Menu Sequence
 Menu should follow progression of meal
2. Focal Points
 Use focal points on the menu to push certain
menu items

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 Focal Points

Focal Point

Focal Point

Single Sheet Menu Twofold Menu

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 Focal Points

2 4

Focal Point

3 5
Threefold Menu
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 Specials

 Larger Bolder type than the rest of menu

 Longer description
 Concept of Closure
 people’s eyes are drawn to what ever is enclosed
by a box
 Color, illustration, and/or pictures, bullets
can be used to draw attention to signature
items.
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 Branding

 Fast food
 Coke / Pepsi
 TGIF
 Jack Daniels

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 Menu Pricing

 Odd-Cents pricing
 Majority of prices end in either a “5” or a “9”
 Price rounding.
 Within certain price bands, price increases have
little negative impact on customers
 Placement

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 Price Placement
BAKED CHICKEN
Tender pieces of chicken breast
Baked Chicken……….$8.99 $8.99
Lemon Sole………….$11.99 LEMON SOLE
Lamb Steak………….$12.99 Fresh filets sautéed with lemon caper sauce
$11.99
Swordfish Steak…..…$14.99
LAMB STEAK
Center cut of lamb served on a bed of rice
$12.99
SWORDFISH STEAK
Charcoal grilled served with beurre blanc
$14.99

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 Price Placement
BAKED CHICKEN
Tender pieces of chicken breast
Eight dollars and ninety nine cents

LEMON SOLE
Fresh filets sautéed with lemon caper sauce
Eleven dollars and ninety nine cents

LAMB STEAK
Center cut of lamb served on a bed of rice
Twelve dollars and ninety nine cents

SWORDFISH STEAK
Charcoal grilled served with beurre blanc
Fourteen dollars and ninety nine cents

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 Conclusion

 Menu analysis is important

 If demographic studies, internal capacities, cost cards,
and markups have been executed correctly, the score
should be a good one
 Analysis should be done using either the Smith or the
Hurst methods to ascertain the profitability of the menu
 If the analysis shows a poor menu, make improvements
 Good menu: first step has been taken toward running a
profitable operation.
 It’s just that simple
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 Where to Get More Information
 Mill, Robert Christie (1998) Restaurant
Management: Customers, operations,
and employees / Menu Scoring & Menu
Engineering, pp 114-116. Upper Saddle
River, N.J. : Prentice Hall.
 Drysdale, John A. & Jennifer Adams
Aldrich (2002). Profitable menu
planning / Chapter 5: Menu Analysis, pp.
101-115. 3rd ed. Upper Saddle River,
N.J. : Prentice Hall, TX911.3.M45 D79
2002
 CD-ROM TX911.3.M45 D79 2002
 Most Menu & F&B Management Books
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