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      You are here >   Food Cost Increases: The Perfect Storm?
        
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      Food & Beverage - Archives
      Food Cost Increases:  The Perfect Storm?


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       Item

      Increase

       Wheat

       100.6%

       Soybeans

       81.7%

       Robusta Coffee

       34.9%

       Maize

       24.5%

       Barley

       39.2%

       Cocoa Beans

       34.9%

       Crude Oil

       66.3%


      The strong Canadian dollar is also contributing to the problem.The high dollar will deter international visitors to Canada while the economic slowdown in the US will reduce manufacturing shipments and job growth.

      Reduce Costs by Reducing Quality or Portion Size
      Another popular approach to is to buy less expensive ingredients, decrease portion sizes or both.  These cost reduction techniques are much easier to implement than increased sales, but they do incur some risk.

      Reducing recipe portion sizes is one of the most effective ways of reducing food and beverage costs.  For some time, various consumer and diet-oriented groups have complained that restaurant portions are too large in the first place.  It may be quite possible, and in fact, even advantageous to reduce the portion sizes of some menu items.  This should generally be done gradually, and it may be necessary to use different presentation approaches or plate sizes in order to provide the appearance of significant portions.

      Improve Inventory Control
      It would probably be better to think of improved inventory control as mandatory, not optional.  After all, money lost to inadequate inventory control is unnecessary, and in times of increasing food prices should be the first thing changed.  Every dollar not lost to theft, waste, spoilage or over-portioning is a dollar of profit.

      Some simple steps can be taken to improve inventory control.  The use of purchase orders and rigorous receiving practices can help to eliminate purveyor related theft and invoicing errors.  More frequent inventories will result in the ability to maintain lower inventory levels, reduce theft and spoilage.  The use of cutting charts for all butchery will result in less waste associated with the butchery function, which in most cases involves the most expensive food purchased.  Waste sheets, which are used to identify anything thrown away or poured out can help to reduce costs as well, since they actually show where the money is being lost.

      Ultimate inventory control requires an automated system capable of tracking actual and ideal use for multi-profit centre environments.  While these systems tend to require significant investment, they provide the ability to identify inventory control problems, and at the same time reduce the labour costs associated with manual control.  They represent the best long-term solution for food and beverage profit maximization, regardless of the outside effects such as increasing food and beverage costs.

      Weathering the Storm
      There's no question that the storm is already here.  And this one is going to get worse before it gets better.  Maintaining the status quo in the face of this storm is too much of a gamble.  Implementing the changes discussed, along with a strong inventory control system now is the closest thing casinos can get to a sure bet for food and beverage survival.

      By Bill Schwartz , CEO of System Concepts, Inc. (SCI)

       

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