At one point or another Food and Beverage operations have had “issues” with food costs. I remember working for highly respected Executive Chefs and watching them turn into maniacs digging through the garbage and blaming everything and everyone for a high food cost. Talk about a letdown seeing someone you idolize desperately trying to fix a problem.

Personally, I didn’t and don’t see the point of digging in today’s trash to solve a problem that happened last month.

I hadn’t thought of this in many years, but it all came back when a friend told me a story recently.

The story was about a time he went to help a Hotel & Resort during a rebranding and restructuring. He was telling me how much disarray the culinary department was in. The place was a mess, disorganized, had poor and inconsistent quality, and had low morale. It was not good.

He told me about a conversation he had with one of the leaders who had been speaking with the new chef. He asked the chef how it was going and what the priorities were. The chef replied, “the food cost”. It is almost like us chefs have become programmed to use that buzzword. With all the problems he was shocked that the only problem the chef could see was the food cost. He went on to say that the place was upside down and no one wanted to work or eat there.

It surprised me (and it didn’t) that an experienced chef who was new in a position thought that food cost was the most important thing. Now, don’t get me wrong, it is essential, but how on earth would he fix the food cost?

The misunderstanding and understatement of food cost

Thinking that food cost is a singular event is an understatement and misunderstanding. Food cost itself is a calculation and the outcome is the sum of many moving parts. On their own, each aspect or fundamental of running a kitchen is straightforward. What is complicated is how they relate, and this relationship is what makes up the culture.

Food Cost Culture

The culture is created by people and supported by the fundamentals (processes and systems). The only way to have a sustainable and consistent food cost is through your culture. Have a great culture and you will never have to worry about food cost again as you will effectively manage it.

Now back to the story and what can be done.

The chef’s assessment was probably accurate, and his challenge was how to improve the food cost. The chef needs to have the ability to identify what the root cause(s) are, plan, and act. If he continued to only look at the food cost, he would most likely reinforce the behavior or actions that the culture was built on.

His advantage is he is new, and none of the issues are his fault. He has no attachment to any of the processes, systems, or people.

The starting point in this situation is with the people, the cooks, stewards, and chefs. They are the foundation and the ones that have the most impact on the success.

What would the first steps look like to start the transformation?

Let’s look at the information we know and what can be determined.

Poor Quality

This is the most important problem to address, but like food cost, it is the result of many things and can not be tackled on its own.

Causes

• • Ingredients purchased are poor quality, most likely as an effort to save money
  • Lack of equipment and organization
  • Employees disengaged and lacking training
  • Leadership priorities are out of line

Impact

• • Low staff morale and pride
  • Poor reputation
  • Declining revenues affecting profit and food costs

Fix

• • Make improvements to the product that is being purchased
  • Create recipes and standards
  • Train the team
  • Follow up

Kitchen Areas Unorganized and Dirty

The kitchen is a direct reflection of the chef. If the kitchen is disorganized then it is likely that every aspect of the operation is the same or worse.

Causes

• • Leadership lacks attention to detail and professional discipline
  • No one is setting the example and providing direction
  • Lack of storage

Impact

• • Low staff morale and pride
  • Frustration for employees as disorganization makes the job harder
  • Increased food cost due to lack of structure and visibility

Fix

• • Lean management – 5s (Sort, Set in Order, Shine, Standardized, Sustain)
  • Deep clean all kitchen and equipment – seek outside support if needed
  • The key is the chef, and all the leaders need to take the lead and work with the team.

Benefits

• • Staff morale and pride
  • Better working conditions
  • Stewarding Department more effective with less clutter

Equipment Not Working

This is an easy one. If the team needs the equipment for the job, then leaders need to make sure they have it. If you give them poor-quality equipment, how can you ask for top-quality food? Send a professional soccer team on the field with tennis shoes and see how they do.

Causes

• • No preventative maintenance programs
  • Poor communication
  • Lack of training on care and use
  • No leadership follow-up or controls in place
  • Trying to save money (not the way to do it)

Impact

• • Low staff morale and pride
  • Food Yield
  • Quality of product – wrong cooking methods used
  • Potential injuries
  • The strain on other equipment

Fix

• • Fix the equipment. If it is not needed, then move it out.
  • Ask the team what equipment they need.
  • Start a PM program
  • Commitment from the top to invest
  • Communication plan to keep the team informed of equipment repair status
  • Training and protection of equipment

Benefits

• • Increased productivity
  • Better food quality
  • Reduced injury

You may have noticed one common impact and that is low staff morale and pride. That is the starting point. No recipe system or software will help you if the staff is unhappy. They are the first part of the culture equation. Getting the team involved is a critical first step. Get their input every step of the way and act on it.

The reason this is powerful is you are teaching your team to accept change. The easiest change to accept is that which is positive and impacts them directly. As you move through the many other steps needed, you will have a team that is onboard and ready to accept more changes. If you start with a change that does not benefit them directly you will face resistance no matter how big of an impact It will make.

The Strategy to Improve the People Part of the Culture

Here are the key takeaways to begin rebuilding the food cost culture.

It is all about the employees. The cooks, stewards, and servers are the ones that have the biggest impact. Why? Because if they follow all the recipes, procedures, and service details everything works, including your food cost. But they need to be engaged.

1. 1. Make quality #1 – The best way to improve culture is for people to be proud of what they do. Serving substandard products to save food cost only makes it worse.
   2. Make sure they have proper uniforms.
   3. Give them the tools to do the job (storage containers, portioning tools, etc..).
   4. Fix the broken equipment.
   5. Clean up and organize the kitchens and service areas.
   6. Put food safety standards in place that cover cooking, cooling, storage, labeling, handling, etc. Get them involved in solutions and talk about the bigger social issues related to food waste.
   7. Stop talking about food cost. Food cost is never an inspiring conversation unless you are recognizing people for a job well done. Look at it using the same principles of dealing with issues – praise in public, coach in private. In this case, praise when it is good and be silent when it is not.
   8. Food cost is your problem, not the employees’.
   9. Throw a party – Yes, once you get things in order celebrate the work and success. Talk about all the hard work of your team. Give them the credit (this is a time to check your ego).

Yes, some of this involves money, so spend it. If you don’t you lose it either way. Spending money in the right areas will make the money come back.

In future editions of CORE Profit Strategies, we will cover the other part of the culture – the fundamentals (processes and systems). Sign-up here.