Welcome to the first installment in our new series on menu engineering and development. Over five monthly articles, Doug Radkey, founder and president of KRG Hospitality Inc., a start-up and development consulting company, will break down everything you need to know about building profitable menus. Our first installment sets the foundation with 14 fundamental elements to consider for menu development.
Read the second installment: Paper vs Online vs Digital Menus
Developing your bar or restaurant’s menu should be a fun and exciting task, but it is also a potential turning point for your brand's long-term success. A process this significant needs to be a thought-provoking one with thorough planning.
There needs to be a strategy behind your menu — not only with food, but also beverages.
Every plate, bowl, glass, and packaged item delivered to each and every guest needs to create a visible and positive emotion. Wherever your food is experienced, it has to elevate the guest experience and guest expectation. If it doesn’t, you and your team will have some crucial work to do.
After assisting with the development of hundreds of concepts and menus over the years, we’ve learned a few tricks along the way that will not only help reduce friction within your bar and kitchen space, but also maximize your revenue and profit potential — and absolutely wow your customers.
In fact, there are 14 fundamental elements to consider when developing an iconic menu.
1. Target Your Ideal Customers
If you’ve also completed a feasibility study, marketing plan, and business plan, you will undoubtedly know who your target customers are. Arguably the most important step here is simply knowing what your customers want and how much it is they’re willing to spend for a F&B experience based on their chosen lifestyles and socio-graphics.
The mistake many F&B brands make is designing a menu they want, not what their customers want, which often leads to early challenges or failure. When you truly understand your target market, you can extract emotions and personalize the food & beverage experience through the use of effective story-telling.
2. The Ideation Stage
Every item on your menu should be developed with care and with purpose while telling your brand story. While your menu should be small, targeted, balanced, diverse, and exciting — there is an in-depth process that will get you there. While you should aim for a menu that is 12-15 items to obtain optimal performance, you want to "create" two to three times that amount and then narrow it down to your top items based on the remaining key steps.
3. Competitive Analysis
At this stage of the process, you will/should also now know the fundamentals of your menu and who will be your direct and indirect competitors. Take your research to the next level and analyze your direct competitors in terms of their menu. Look for menu size, menu style, day-part strategies, portion sizes, ingredient quality, and price points. While you should never fear your competition, you still need to position your brand for success and differentiation.
4. Economic Factors
Complete a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to determine the opportunities that are presented to your concept. Review your local economics (look at inflation rates, employment, cost of goods, product availability, talent availability, consumer spending) along with trends and your overall competition. You want to list 5-10 potential opportunities and prioritize them in a way that will deliver a winning menu for your concept.
5. Flavor Profiles
Which menu items will define your brand and your success? What quality of ingredients will you need to use? How can you re-purpose ingredients to maximize supplier buying power in addition to reducing waste plus your food & beverage costs? What will be your nutritional and flavor profile based on your target customers? How will you maximize productivity within your venue?
6. The Talent Pool
What experience do you need in your kitchen and bar to deliver your desired menu items on a consistent basis? What roles or specific qualifications and skill-sets will you need? What is the starting salary for these types of positions and can your business model withstand those salaries? Lastly, what is the talent availability like within your region for these qualifications?
7. Vendor Selection
Having the right vendors is an essential key to success, especially if you’re producing much of your menu in-house. You need to ask if they’re in a position to consistently deliver the quality product and ingredients you need each and every time. Do they only deliver on specific days? If yes, how will it store in your venue? Do the vendors have quality control and recall systems in place? Can they grow with your brand in terms of quantity? Will suppliers and ingredients need to change based on seasons? When selecting your vendors, always have a back-up plan.
8. Pricing Strategy
How will you position your concept and menu within the market? Do you want to be a leader in value and quality, or are you reaching a specific high-income or low-income demographic? What is the economic state of your hyper-local area and target customers? What are the margins you need to achieve to be financially sustainable?
9. Theoretical Costs
In collaboration with your pricing strategy, you need to cost out your menu and determine your “theoretical” food and beverage costs, which are your ideal cost percentages. It is based on the intended or actual sales volumes of each item within a category and the costed recipe for each one of those items, thereby becoming the benchmarks laid out in budgets for the operational financial statements.
10. Bar & Kitchen Layout
Now that you know the core of your menu, you can plan for the kitchen equipment, bar equipment, storage needs, square footage requirements, and the productive layout of your stations. You will want to work with an engineer plus an experienced chef, mixologist, consultant, and/or equipment supplier to maximize your productivity.
11. Visual Representation
How can you add a perception of value through your plating — no matter your concept? Look for innovative plate, take-out, and glassware designs. Remember this: When humanizing a food & drink option, it takes it out of the realm of being just a commodity item. This means putting effort into each option while seeking a positive guest experience and visible emotion.
12. Testing Phase
Up to this point, only word descriptions, drawings, inspirations, and spreadsheets exist for the menu item prototype. Now you need to get into a kitchen or bar and test it out and record the process. Once the menu item is tested internally to ensure it’s feasible based on taste, preparation, timing, logistics, and from a cost structure point-of-view, it should be tested with a group of 5-10 target customers. Once feedback is obtained, each menu item should be tested again (internally) with the adjustments made via focus group feedback leading to a finalized product.
13. Marketing and Engineering
At the end of the day, your menu is the number one form of marketing — without it, you have nothing. You want to artfully describe the story behind your brand and each one of your F&B options with powerful, meaningful descriptives, photos, and videos that will help attract and retain your target customers. You want to use winning menu placement, product mix, and other engineering strategies that will deliver a consistently high level of revenue and profit for your venue.
14. Training Your Team
Lastly, you want to create an initial menu training schedule and an ongoing training program for your entire team by curating standard operating procedures and recipe documentation along with scheduled check-ins with your team on each and every menu item.
As you can see, developing a menu is much more than choosing random items or items you think will sell well. There is a science behind an iconic menu that drives sales, profits, and memorable guest experiences. Want more? Stay tuned as this is just part one of a five-part series on developing a menu where we will go over real menu design samples, menu categories, limited time offers, menu development for multi-operators, and how technology is integrating with the development process.
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