Menu Engineering: How to Raise Restaurant Profits 15% or More
- Learn how to design your menu for greater profits
- Gain ongoing profit increases of up to 15% from one menu redesign and additional profits from future refinements
- Strategies discussed apply to all types of menus: traditional food menus, wine lists, menu boards, and more
WHAT IS MENU ENGINEERING?
Menu engineering is the study of the profitability and popularity of menu items and how these two factors influence the placement of these items on a menu. The goal is simple: to increase profitability per guest.
The concept of menu engineering is not based on random, seat-of-your pants decision making; it is rooted in work performed in 1970 by the Boston Consulting Group to help businesses segment their products in a way that facilitates analysis and decision making. The idea was brought to the restaurant industry roughly a decade later by Professor “Coach” Donald Smith of Michigan State University.
While menu engineering is most often mentioned in the context of traditional paper restaurant menus, the concepts are equally applicable to menus posted online, drink menus, specials written on table tents, and items written on menu boards. Simply put, if you sell items that have varying levels of profitability and popularity, menu engineering may help you increase your profits.
MENU ENGINEERING'S PROFIT IMPACT
A well-executed initial menu-engineering effort takes me about a week to complete and can increase a restaurant’s profits by 10% to 15% on an ongoing basis. And the profit impact doesn’t have to stop there. Some restaurant groups call me in once a year to squeeze additional profits out of the same menu, and although the low-hanging fruit has already been picked in these cases, I have always been able to find additional profit increases that tend to be in the 10% range.
The difference between the more and less successful attempts at menu engineering does not hinge on an establishment’s type or size. Instead, the determining factors are the restaurant owner/manager’s knowledge of the menu and willingness to put in the time and effort needed to understand the process and execute changes. And if you need proof that the benefits are not restricted to a select few, here’s a compelling fact: I have been in the business for more than three decades and have yet to have a customer take me up on my money-back guarantee that clients who follow my recommendations will increase profits by at least $1,000 in each restaurant.
The restaurant industry has a lot of low-hanging engineering profit waiting to be picked. Out of 100 randomly selected restaurants, I estimate that 40 of them are performing some sort of menu engineering. And these locations are not specific types of restaurants—they are both big and small, high-end and lower-end. Furthermore, out of these 40, I estimate that only 10 are doing a good job with their engineering efforts. The other 60 out of 100 aren’t performing any engineering at all and are leaving a lot of easy profits on the table.