Feb 25, 2020
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Crunching the numbers to keep your budget under control

As food costs continue their trend upwards, the dietary manager must find creative ways to meet the budget and still provide a quality foodservice experience for the customer. The goal when charged with reducing food costs is to do so without affecting the quality of the food. This is not an easy task to say the least.

First things first, you must identify areas where excessive food costs can occur. Some of the reasons for out of control costs are:

  • A poorly planned menu
  • Over production
  • Lack of portion control
  • Poor purchasing practices
  • Failure to check deliveries and poor storage practices
  • Lack of standardized recipes
  • Excessive waste in preparation
  • Theft
  • Excessive use of supplements (if these are taken out of the food service budget)
  • Poor accountability of costs

A menu must be planned properly with a mix of high and low cost items to balance out. Keep the total number of menu items limited to control costs and maintain quality. Make sure appropriate seasonal food items are on the menu. Having watermelon in January sounds good but does not make sense as far as costs and quality. Make sure the menu is planned taking into consideration the available staff and equipment. If there is not enough space for the items that you have planned, this can be a major headache for the staff.

Over production or waste can spell disaster for an operation trying to watch their pennies. Make sure the employees are clear on how much food to prepare. You certainly do not want to run out of food but there should not be multiple pans of leftover food remaining after a meal. A good place to check for excessive leftovers is to look in the walk-in cooler.

Lack of portion control is also a huge problem when dealing with excessive food costs. Serving too much or too little can have an adverse effect. Make sure employees are aware of the proper serving utensil to use for each food item prior to meal service.

Poor purchasing practices are a sure fire way for the budget to balloon. Make sure only authorized vendors are used and that an ordering schedule is followed. A prime vendor should be used for a large percentage of purchases to assure the benefit of volume purchasing. Using a prime vendor also avoids any delivery minimums another company may impose on you. Try to limit the use of convenience food items as you do pay a premium for these. If your company has certain specifications and standards, these need to be followed to a tea. Product specifications eliminate misunderstandings with vendors and improve work efficiency. And make sure that “under purchasing” is not a routine practice. This can lead to unnecessary trips to the grocery store which will cost the operation more and wastes the time of the person doing the shopping.

When receiving products make sure the receiving area is clean and uncluttered and do not allow access to unauthorized personnel. Theft is a major concern and making access to storerooms, walk-ins, etc., less accessible to unauthorized staff is paramount. Make sure the quantity, quality and price for each item is verified. Refrigerated foods must be received at 41 °F or below and frozen foods at 0 °F or below. Make sure there are no dented, rusty cans or broken seals. Employees must employ a FIFO (First In, First Out) rotation system.

Standardized recipes assure that waste is minimized and consistency is maintained on a daily basis. Excessive waste can cost the operator big bucks over time. Make sure production staff have proper recipes to follow and that they are adhered to on a daily basis.

If nutritional supplements are coming out of the food service budget, make sure these are reviewed on a regular basis to assure appropriateness. Supplements may be offered to a resident or patient and they may not even like the product. Yet the supplements are continued to be offered and the cost of these are literally being poured down the drain. Make sure the dietitian is in close contact with nursing to assure the supplements are being consumed. There also may be cases where “fortified” foods may be used in place of supplements at a much lower cost and better acceptance.

Lastly make sure you know exactly how much the menu should cost. An ideal food cost should be established. If the menu does not meet the budgetary constraints, then an alteration may be necessary. The manager should be tracking cost trends and reacting to these changes. Benchmarking should be observed to assure best practices are being utilized.

Keeping the food budget under control is a huge responsibility and one that needs to be monitored and reviewed constantly to assure money is being spent properly and excessive waste is avoided at all times.