Operators across all sectors of foodservice have been battling multiple challenges in recent years, from labor shortages and wage increases to rising food costs. In recent months inflation has added to the struggle, especially since food is the second highest expense of foodservice operators.
Wholesale food inflation is up 13.2% over the last 12 months, according to the National Restaurant Association. The good news is that with the right focus on key areas and processes, you can regain control and keep your food costs in check.
For operators of senior living communities, the way to manage food costs is to think like a restauranteur. Often in the service industry foodservice issues aren’t a top priority. Instead, the focus is on caring for people and providing quality care in all aspects of daily life. But by borrowing a few simple improvements to policies and procedures from the restaurant industry, you’ll be able to streamline operations and maximize profits in the dining operation.
- Understand Your Menu Composition
Typically, senior living operators develop menus on a bi-annual basis – summer and winter. While this is not inherently a bad thing, it can lead to complacency in food cost management. In the restaurant industry, operators evaluate menus regularly to maximize profits.
Make use of menu management tools and have processes in place for regular reviews of your menu and menu inputs. Looking at things such as order guides, standardized recipes, and production records allows you to see opportunities to make appropriate adjustments.
Restaurateurs also know the value of menu engineering. Understanding the value of menu items from a satisfaction and cost perspective will maximize your ability to manage your menu composition. The key is to not just shop around for the best price, but find the right mix of price and quality to avoid wild swings in quality and satisfaction.
- Install Systems for Inventory and Waste Management
It’s critical that your operation has regular processes in place to manage your food inventories, food production, and service food waste. Senior living operators typically are not very focused on waste management. The industry sees anywhere between 18%-20% food waste versus 7%-9% for commercial operators. Model the practices of restaurant operators that invest in systems to measure inputs (such as recipe ingredient list, what your labor costs are, etc.) and outputs (how many meals served, amount of waste, etc.). This allows you to see where waste occurs and make adjustments, such as avoiding bulk production and creating waste management initiatives.
Tracking inventories is also a big opportunity for senior living operators to lower food costs. First and foremost, implement a monthly inventory. This is food cost management at its simplest and the easiest way to find opportunities and issues. Then add weekly stock counts (a common practice in restaurants) of your top 15-20 cost items or largest movers. This can add up to 10% to your bottom line annually.
- Follow Your Data Trends
Making use of data is a key driver of success in managing food costs. Your kitchens and dining rooms create multiple data points at every meal. If you aren’t currently collecting data, start now with things such as recipe cost, number of meals served per day, number of residents served per meal, etc. The best restaurateurs know their data and use it daily to make decisions on all aspects of food cost management. There are software programs available designed for this specifically, but at a minimum it is possible to manually capture data from purchasing and production records, point of sale, inventories, and waste logs to find trends in your operation.
Remember, consistency is key. If you are not collecting data consistently or accurately, the trends that you get will not be reflective of what is actually happening in your various foodservice outlets.
- Educate and Engage Your Employees
Employees are the key to any foodservice operator's success. They are the ones making and serving the food and creating the resident experiences in your community. But to create a culture of employee engagement, you have to give your employees the WHY.
It all starts with training, both at the point of hiring and with continuing education along the way. Create learning touchpoints, assign training partners, and have knowledge and skills checks – these are all key components to success.
You can also encourage employees to embrace the data collected and find ways to use it to their benefit as well. There might be ways of adding efficiency to processes and procedures that will improve employee morale.
Changing the mindset to a restaurant operator’s procedures takes some work initially, but once you set the stage and show the value of it to your team, you will see the benefits and return on investment of your time and dollars.
Aaron Fish has nearly 30 years of hospitality industry experience, spending time in the industry with a singular focus on the customer experience. Having gained experience in some of the top hospitality organizations in the country, (such as such as Marriott Hotels, Aramark, and The Broadmoor Hotel to name a few) he brings a keen attention to building customer-focused operations to the senior living industry. From Dining Room Manager to Senior Vice President, Aaron has spent his career creating best-in-class experiences for the residents and guests he serves. He does this with an eye towards innovation in concept design, as well as implementing a combination of best practices, system development, and quality training for all levels throughout any organization.
Aaron holds a B.S. in Hospitality Management from Kansas State University and an MBA in Marketing from Baker University.