For most restaurant and bar operators, inventory is a moving target. Product comes in the back door, ingredients are prepped, portions are plated, drinks are poured, and before long, another delivery is on its way. Somewhere in that constant movement, a little food gets wasted, a little liquor gets overpoured and a few products may not make it to the end of the week.
Those small losses can become surprisingly expensive.
“Small losses from waste, over-ordering and inconsistent portions add up quickly,” said Sarah Beth Stranges, general manager of STK Steakhouse Fallsview. “A little extra product used on every plate or pour may seem insignificant until it’s multiplied across hundreds of dishes.”
Effective inventory management is less about obsessively counting every tomato and more about establishing consistent practices throughout the operation. For Joe Germanotta, who owns and operates Joanne, a longstanding Italian restaurant on New York City’s Upper West Side, it starts with knowing what comes through the door and what goes out to the guest.
“If you do not control the product coming in and the portions going out, it becomes very difficult to control your food and beverage costs,” he said.
Start at the Back Door
Before inventory can be managed, operators have to know exactly what they are receiving.
A delivery may contain the wrong quantity, a substitute product, damaged merchandise or a price that differs from what was expected. If nobody checks, the restaurant can end up paying for something it did not order or accepting product that does not meet its standards.
Germanotta said deliveries should be checked by a responsible employee who verifies what was ordered has been received.
“Receiving is critical,” he said. “Deliveries should be checked and verified by a responsible employee who can confirm that the quantities, quality and pricing match what was ordered and invoiced.”
Ray Camillo, founder and CEO of Blue Orbit Restaurant Consulting, has seen the problem play out in a particularly basic way: A restaurant orders one case of lemons and two arrive. If nobody checks the order against the invoice and what was actually delivered, the restaurant pays for both.
Giving one person clear responsibility for receiving can make a difference, particularly in a busy operation where everyone assumes someone else checked the delivery.
Control Portions and Pars
Once products are in the building, portion control becomes one of the most important inventory practices an operation can establish.
An extra ounce of protein may not seem significant. Neither does an extra splash of liquor. But multiply those extras across hundreds of meals and drinks, and the numbers start to look different.
Standard recipes and portioning tools can help keep those variances under control while also ensuring guests receive a consistent product.
At Joanne, Germanotta said bartenders are trained on standard pours and provided with measuring tools and clear pouring guidelines.
“Recipes should be standardized so that the same drink is made the same way regardless of who is behind the bar,” he said. “This protects the restaurant’s margins while also giving the guest a consistent product.”
The same philosophy applies in the kitchen. Measuring scoops, ladles, spoodles and other portioning tools make it easier for cooks to consistently follow recipes instead of relying on guesswork. Camillo said jiggers are particularly useful for controlling craft cocktail pours, while speed pours can also work when bartenders are properly trained.
Periodic automatic replacement levels are another important piece of the equation. Operators should regularly revisit them based on sales, reservations, seasonality, holidays, special events and product costs.
“PAR levels are a starting point, not a static number,” Stranges said.
Camillo recommends keeping inventory as lean as practical, with enough product to make it to the next delivery and a small buffer. He also suggests using different PARs for different sales periods because a restaurant may have dramatically different needs from Tuesday through Thursday than it does from Friday through Monday.
The objective is to avoid both extremes: carrying too much inventory and cutting things so close that the kitchen is constantly scrambling for product.
Let Sales Data Do Some of the Work
Historical sales information can be one of the most useful inventory tools an operator already has.
Germanotta said Joanne looks at reservations, day of the week, time of year, holidays, events and historical sales trends when determining how much food to prepare.
“The goal is to have enough product prepared to properly serve the guest without routinely producing more than the restaurant is likely to sell,” he said.
That same approach can be applied to ordering. If a particular entrée consistently sells 12 to 15 times on Tuesday nights, there is little reason to prepare enough food for 30 unless something unusual is happening.
Camillo said tracking sales by day and shift can help chefs establish realistic production levels and identify ingredients that are not moving quickly enough. Operators can also consider how frequently ingredients are used across the menu. Products that appear in several dishes tend to move through the operation more efficiently than ingredients purchased for only one dish.
Count Smarter
There is no single inventory schedule that works for every restaurant. Germanotta considers a full inventory every two weeks reasonable for many operations, while high-value products such as wine and liquor deserve more frequent attention because of their cost and potential for loss.
Camillo takes a monthly approach for a full inventory, supplemented with smaller counts of expensive products. A manager or chef might count premium steaks or high-end liquor at the beginning and end of a shift and compare the difference with what the point of sale said was sold.
That simple comparison can uncover problems quickly. If 10 steaks are on hand at the beginning of service and four are sold, six should remain. If only five are there, someone needs to determine what happened to the missing steak.
The same approach works behind the bar, where premium bottles can be particularly vulnerable to overpouring, spills or theft.
Today’s POS and inventory technology can provide operators with far more information than was available in the past, but technology is only as useful as the information being entered into the system.
Stranges said comparing POS and inventory data can help operators identify discrepancies, understand product movement and make better purchasing decisions.
“It can also help to flag items that aren’t moving quickly enough to justify the current size of the inventory you’re carrying,” she said.
Germanotta takes a less technology-dependent approach at Joanne, where the focus remains on actual purchasing, sales, inventory levels and food and beverage costs.
“Technology can certainly help identify discrepancies,” he said, “but the information is only useful if the restaurant has good receiving, portioning, and inventory procedures in place first.”
Find the Waste Before It Finds You
Waste is another area where small amounts can quickly become real money.
Stranges recommends tracking what is consistently being wasted and using that information to adjust ordering and prep levels. Proper storage and rotation can also prevent product from being forgotten until it is no longer usable.
Rather than creating an elaborate system to document every discarded item, Camillo emphasizes getting the fundamentals right: ordering, receiving and usage.
Operators can also reduce waste by paying attention to shelf life. If a sauce, soup or other sub-recipe can be safely prepared in larger batches and used over several days, there may be little reason to make it from scratch every day.
Inventory velocity matters, too. Ingredients that move through several menu items are less likely to sit unused, while products associated with one slow-moving dish can become a recurring source of waste.
Make Inventory Everyone’s Business
Inventory management cannot belong only to the chef, general manager or owner. Everyone who receives, stores, prepares or serves food and beverages plays a role.
“Training and consistency are extremely important,” Germanotta said.
Employees should understand why portioning matters, how products should be stored and rotated, how deliveries should be checked and what procedures apply to comps, voids and discounts. For bars, that means training bartenders on recipes and pours while giving them the tools to work efficiently. For kitchens, it means making sure cooks have the measuring tools necessary to follow recipes accurately.
Managers, meanwhile, need to pay attention when the numbers start moving in the wrong direction. Germanotta recommends regularly monitoring food and beverage cost percentages and comparing changes with what the restaurant is paying suppliers. When costs rise unexpectedly, the answer may be higher purchasing prices, but it could also be portioning, waste, theft or another operational issue.
That is ultimately what good inventory management provides: a way to see those issues before they become larger problems. Rather than treating inventory as a once-a-month accounting chore, successful operators can make it part of the everyday rhythm of the restaurant.
As Germanotta put it, “If you do not control the product coming in and the portions going out, it becomes very difficult to control your food and beverage costs.”