Have you ever seen a restaurant that's always busy with customers, but then struggles to grow a few months later? At first glance, this situation seems odd.
Sales were going well, customers were coming in, and the menu was even quite popular. However, upon closer inspection, it turned out the problem lay in an inappropriate menu strategy.
This is the reason why menu engineering is becoming an increasingly important technique in the modern culinary industry. Many entrepreneurs focus on creating delicious menus. That's indeed important.
However, the culinary business isn't just about taste. Each menu item must also be able to generate a healthy profit for the business. Interestingly, many large restaurants use menu engineering metrics to analyze menu performance.
Through this approach, business owners can find out which menus generate high profits and which menus actually burden operations.
When understanding what is the engineering menu? You will see that this strategy actually helps businesses grow faster by leveraging the data they already have.
So how does it work? How much of an impact does it have on restaurant profits? Let's discuss it in detail.
Favorite Menus Are Not Necessarily Profitable
Let's imagine a story that often happens in the culinary world. A restaurant owner has a chicken chili sauce dish that's always a hit. Customers love it, and the kitchen team is accustomed to making it, too.
Because it is so popular, the business owner considers the menu to be the business's greatest asset. However, after an evaluation, it turned out that the profits generated by the menu were very small.
The selling price is low while the cost of raw materials continues to rise. On the other hand, there are other menus that are rarely promoted but generate much larger profit margins.
This kind of situation is the main reason why menu engineering is needed. A healthy culinary business must understand which menu items truly contribute to profits.
What is the Engineering Menu?
Before going any further, let's first understand the definition. Simply, The engineering menu is the analysis method used to evaluate the performance of each menu based on two main factors, namely the level of popularity and the level of profit.
Through this approach, business owners can see which products are worth maintaining, developing, promoting, or even removing from the menu.
That's why when someone asks what is the engineering menu? The answer isn't just a technique for organizing a food menu. It's a business strategy that helps restaurants make data-driven decisions.
In practice,menu engineering became a very effective tool to increase restaurant profitability without having to constantly raise prices.
Read also:What is COGS & How to Calculate It?
Why Is Menu Engineering Increasingly Important Today?
Sumber: Istockphoto
The development of the culinary industry has made competition increasingly fierce.Customers have many choices. Food trends change rapidly. Raw material costs also continue to fluctuate according to market conditions.
In situations like this, business decisions based solely on intuition are often less effective. Because of this, many restaurants have started usingmenu engineeringas a basis for decision making.
Through sales data and profit margins, business owners can understand business conditions more objectively.
This is the reason why the engineering menu is one of the techniques widely applied by modern restaurants.
The Relationship Between Menu Engineering and Business Profit
After understanding the basic concept, now we move on to the benefits that are most felt by business actors, namely increased profits. Many restaurants have dozens or even hundreds of menus.
But in reality, only a small portion are actually major contributors to income. By implementing menu engineering, business owners can identify the most profitable menus.
Business owners can also identify products that appear popular but actually have low margins. Well, based on that understanding, what is the engineering menu? It helps businesses allocate resources.
Getting to Know the Engineering Matrix Menu
After knowing the benefits, now we go into one of the most important components in this technique, namely menu engineering matrix.
In general, menu engineering matrices used to group menus based on popularity and profitability.
Through this method, each menu usually falls into four main categories. The first category is a menu with high sales and high profits.
The second category is menus that are profitable but less popular. The third category is menus that are popular but have low profit margins. The fourth category is menus that are less popular and less profitable.
Star Category in Engineering Menu
The first category is often referred to as Star. Menus in this group have high sales levels and large profits. Usually this is the product that is the restaurant's mainstay.
Because of its huge contribution, the Star category menu deserves special attention. Promotion must be maintained, quality must be consistent, position in the menu list also needs to be maintained.
In many engineering menu examples, the Star category is the main driver of business growth.
Puzzle Category in Engineering Menu
The next category is Puzzle. Menus in this group generate high profits but sales levels are still low. The problem is not profits, but lack of popularity.
Through the menu engineering matrix, business owners can find ways to make this menu more attractive to customers.
For example, by improving menu descriptions, displaying more attractive photos, or providing recommendations from staff.
In various engineering menu examples, the Puzzle category is often the biggest opportunity to increase profits.
Plow Horse Category in Engineering Menu
The next category is Plow Horse. This menu is very popular but the profits generated are relatively small. Many customers love it, however, the profit margin obtained by the business is less than optimal.
Here the engineering menu is a tool that helps business owners conduct evaluations. Sometimes the solution is in the form of price adjustments, or in the form of reducing production costs without reducing quality.
Dog Category in Engineering Menu
Sumber: Istockphoto
The last category is Dog. Menus in this group have low sales and low profits. Usually a menu like this needs to be seriously evaluated.
Is it still relevant to the target market? Does it need to be updated? Or should it be deleted? Through the menu engineering matrix, decisions like this can be made based on data.
Examples of Menu Engineering in the Culinary Business
To make it easier to understand, let's look at a simple illustration. A restaurant has four main menus. Menu A is very popular and generates high margins.
Menu B generates high margins but is rarely ordered. Menu C is very popular but profits are small. Menu D is rarely ordered and has low margins.
In engineering menu example, Menu A is in the Star category. Menu B is in the Puzzle category. Menu C is in the Plow Horse category. Menu D is in the Dog category.
Through this analysis, business owners can determine the right strategy for each menu.
Engineering Menu and Online Order
As the trend of online ordering increases, the implementation of menu engineering becomes increasingly relevant. Customers who order online usually make decisions faster.
Customers tend to choose menus that look attractive in the application. Well, analysis results from menu engineering metrics can help determine which products need to be displayed at the top of the ordering platform.
Additionally, business owners can create bundled packages based on the most profitable menu categories. In this way, the online ordering strategy becomes more effective.
Read Also:Customer Retention Is Key to Business Success, Here's How to Improve It!
Common Mistakes When Implementing the Engineering Menu
Even though the concept is simple, many businesses still make mistakes. The first mistake is to only look at the number of sales. However, profits must also be taken into account.
The second mistake is using old data. Customer trends can change at any time. The third mistake is ignoring operational costs.
FAQ About the Engineering Menu
1. What is the engineering menu?
Menu engineering is a menu analysis method used to measure the popularity and profitability of each product sold. This technique helps businesses determine which menu items need to be maintained, improved, or evaluated.
2. Why is menu engineering important for the culinary business?
Because it helps business owners understand the most profitable menu items. With accurate data, restaurants can increase sales while optimizing profit margins.
3. What are the categories in the engineering menu?
Generally the menu is divided into four categories, namely Star (selling and profitable), Plowhorse (selling but low margin), Puzzle (high margin but low sales), and Dog (low sales and low margins).
4. How often should menu engineering be performed?
Ideally, this should be done periodically, for example monthly or quarterly. Regular evaluations help businesses adapt their menu strategies to customer trends and market conditions.
Conclusion
The main goal of menu engineering is to help your culinary business grow healthily and profitably.
However, analyzing sales data for multiple menus manually is certainly time-consuming. To make this process more practical and accurate, you can rely on the artificial intelligence of OLIN by ESB.
As an AI application designed specifically for the F&B industry, OLIN works automatically to analyze sales history, map out best-selling items, and provide upselling recommendations.
With its high accuracy in sales prediction, OLIN is proven to increase restaurant profits by more than 50 percent. Leave the manual methods behind, use OLIN by ESB now, and make every menu decision more profitable!
Get in touch with the ESB Team today and let's discuss what your F&B business needs!
