Recipe Database
Ingredients and quantities were standardized at the recipe level so each menu item had a consistent cost basis.
Menu Engineering Case Study
Connecting recipe costs to contribution margin for better menu pricing decisions.
The operating problem
Knowing an overall food-cost percentage does not answer which menu items create the most contribution margin, which sizes are underpriced or which recipes need to be reformulated as ingredient costs change.
The margin system
Food Cost Database
Current ingredient costs flowed into recipe costing rather than relying on stale manual estimates.
Margin Matrix
Food cost, selling price and contribution margin were compared across pizzas, specialties and sizes.
Pricing decisions
The output was used to guide menu pricing and reformulation decisions instead of evaluating items on food-cost percentage alone.
What the system changes
Cost changes propagate
When ingredient cost changes, affected recipes can be recalculated without rebuilding the menu analysis manually.
Margin becomes comparable
Different specialties and sizes can be judged on dollars of contribution margin as well as percentage food cost.
Pricing gets evidence
Management can see which items absorb cost increases, which deserve a price change and where reformulation may make more sense.