Food Service Cost Reduction Opportunities

 There are many moving parts to controlling food costs and the price being paid is only one factor

The other key components impacting food costs are:

  • The Menu
  • Waste
  • Portions
  • Purchasing
  • Theft

The most critical component of all of the moving parts is the Menu. The Menu can impact areas such as:

  • Products purchased
  • Labor required
  • Per resident day costs
  • Nutritional supplement requirements
  • Resident satisfaction
  • Food service equipment needed

All of the above components tie into not only your food costs, but labor costs as well. Standardized recipes need to be used and followed. If they are not followed and additional ingredients are added, this seemingly small change can add significant costs to the food service department. Many times recipes have been developed for the ideal number of residents to be served but unless you are at 100% occupancy, over production may be taking place. To determine what this would cost, you take your per resident day food costs and multiply it by the number of empty beds and you will see how this really can add up during the year. Also, keep in mind that over production may increase your labor costs. An easy way to determine if portion sizes may be too large or a particular item on the menu is not being well received is to watch the trays come back after meal time and note what is left on the trays. The portion cost is not the per unit cost. Too often we consider for example that 6 #10 cans are equal so everything is based on the case price to calculate the per unit cost; however, quite often different brands have more edible portions than others so using the case price is not the best way to determine if you are getting the best deal.

Purchasing is about more than just price. Purchasing too much or too little increases costs. Purchasing too much may create storage issues, money being tied up while inventory sits, food spoilage, as well as theft since it is easier to take something when there is a lot sitting on the shelf. Purchasing too little can cost you if unnecessary trips to the store are required, buying off contract and therefore, higher prices, a lack of consistency of the product and not having material safety data sheets on required products. Finally, theft certainly can add to your costs. Systems need to be put in place to as they say “keep the honest employees honest”. There is no fool proof method but constant vigilance needs to be enforced. Employees are not the only potential culprits; delivery people, sales people and unauthorized individuals may represent a potential problem as well. So as you analyze your cost reduction opportunities, look beyond just the price of the product to where the real savings can be achieved.