The F&B industry has always been a challenging one. Unpredictable market conditions, high competition and operational complexities make it an extremely difficult for businesses in which to succeed. With such razor-thin margins, operators are also particularly vulnerable to excessive food expenses – an issue that has only worsened in recent years.
So in such a volatile climate, how do restaurants effectively control food costs? One of the most effective methods is to rely on technology that automates and streamlines those areas most critical for budgetary control. These include your inventory, kitchen ops, supplier purchasing and menu.
Here's how Syrve is helping businesses to control and manage their food expenses.
Forecasting
Accurate forecasting is critical to controlling food expenses. But in an industry where customer demand is so volatile, this is often easier said than done. Restaurants often find themselves with excess stock because the demand for specific ingredients wasn’t as high as anticipated. Perishable goods then spoil and have to be written off.
Syrve's Solution
To eliminate this problem, Syrve harnesses the power of AI to deliver sales forecasts that predict demand with as much as 98% accuracy. Taking into account a raft of exterior factors such as the weather, seasonality and events, the system allows you to rely on reliable data. All of this is done automatically which means that you don’t need to sift through reams of paperwork in order to plot your purchases with confidence.
Inventory Management
Avoiding over and under-purchasing not only requires accurate forecasting though. Operators require a complete, accurate and up-to-date understanding of their stock levels. They need to know what they’ve got in, what needs to be purchased and what needs to be written off.
Without a clear picture, waste and spoilage arise which inflate costs and ultimately erode profits. As we’ve seen, accurate forecasting plays a crucial role. But to be truly effective, it needs to connected to an efficient inventory control system that operates in real time.
Syrve's Solution
Syrve’s AI-driven forecasting module works in tandem with a comprehensive inventory management system that captures all operational events, from front to back of house. At point of sale, each order is recorded and ingredient levels adjusted accordingly. As ingredients are delivered, staff record them via a handheld device which further improves accuracy.
To assist in stock-taking, Syrve automatically creates guided stock checks for staff that directs them to the appropriate storage area. They’re then presented with a pre-filled list to check.
At a higher level, managers have access to reliable data than enables them to view current inventory levels and usage rates. What’s more the system provides alerts directly to their mobile phones when stock levels run low. It can even be configured to run automated purchases, if required.
Menu Analysis
To cope with rising food prices, restaurants and F&B operators will often resort to portion down-sizing and/or price hikes. Although an effective strategy in many cases, it can be a counter-productive gambit simply because it risks irking customers. In such a competitive market, even the smallest price increase or dish change may drive diners to competitor establishments.
Syrve's Solution
Syrve allows operators to explore less drastic alternatives with the use of powerful menu analysis tools. Featuring ABC/XYZ analysis, it become easy to identify high-margin dishes that should be promoted while pinpointing those that should be removed from the menu.
It’s a powerful method for balancing costs, prices and sale in order to ensure that the costs arising from waste don’t get out of hand.
Prep Plans
Poorly structured preparation plans have the potential to driver up food costs in a number of ways. First of all, a plan that requires more ingredients than necessary will result in waste. The same will happen if a restaurant prepares too far in advance.
Syrve's Solution
Avoiding these scenarios requires a fully-integrated system such as Syrve. By analysing real-time data and historical sales, while also factoring in recipe requirements and stock levels, Syrve automatically generates precise prep plans that effectively puts an end to the kind of guesswork that generates waste.
Supplier Management
Supplier price fluctuation is unfortunately a fact of life in the F&B industry. To manage the problem, restaurants either absorb the extra costs which can erode profitability, or they pass on the additional expense to the customer. Either way, it has the potential to affect operational stability in the long term. Again, the only recourse for operators is to mitigate the problem, preferably with the help of next-gen technology.
Syrve's Solution
In order to improve supplier management, Syrve allows you to conduct a detailed analysis of all your suppliers. This includes a profitability analysis module for evaluating and comparing current pricing arrangements, as well as the Syrve Price report.
Based on data collected from delivery invoices, the price report lets you monitor price changes and set price increase thresholds – should a supplier cross a threshold, the system sends you an alert. You can also calculate how prices might change when purchasing items in bulk in comparison to single-ingredient purchases.
Final Thoughts
The sheer unpredictability of the F&B industry doesn’t make it easy for restaurants to manage food costs. Yet without the proper procedures in place, expenses can escalate rapidly. In an industry where closures are becoming increasingly prevalent, having in place a robust food cost control strategy is critical for survival. The most effective way to achieve this is by adopting a comprehensive tech solution.
