CULINARY BUSINESS STRATEGY (STRATEGI BISNIS KULINER)

Atang Sabur Safari, M.Sc.

INTRODUCTION
Culinary:
• Anything connected with cooking or kitchens (Cambridge Dictionary)
• Of or relating to the kitchen or cookery (Merriam-Webster Dictionary)
Catering:
• Is the activity of providing food and drink for a large number of people, for
example at weddings and parties (Collins Dictionary)
• Provide with food and drink in a professional capacity (UK)
BUSINESS:
• Work that you do to earn money
• The activity of buying and selling goods and services (Cambridge Dictionary)

WHAT IS STRATEGY ??
An action that organisation takes to achieve its goals (Hill, Charles W.L, Jones, Gareth
R., Galvin, Peter, 2004)

COMPANY STRATEGY
Consists of the competitive moves and business approaches that management has
developed to:
• attract and please customers,
• compete successfully,
• capitalize on opportunities to grow the business,
• respond for changing market conditions,
• conduct operations, and
• achieve performance objectives.

HIERARCHY OF STRATEGY
CORPORATE STRATEGY: Overall Direction of Company and Management of its
Business
BUSINESS STRATEGY: Competitive and Cooperative Strategies
FUNCTIONAL STRATEGY: Maximize Resource Productivity

SIX STEPS OF STRATEGY PLANNING PROCESS

1. Selection of the corporate mission and major corporate goals
2. Analysis of the organisational’s external competitive environ-ment to identify the
organisation’s opportunities and threats
3. Analysis of the organisational’s internal operating environ-ment to identify the
organisation’s strengths and weaknesses
4. Selection of strategies that build on the organisation’s strengths and correct its
weaknesses, to take advantage of external opportunities and counter external threats
5. Strategy implementation; and
6. Strategy evaluation (as part of the feedback process)
(Hill, Charles W.L, Jones, Gareth R., Galvin, Peter, 2004)
VISION and MISSION
Selection of the corporate mission and major corporate goals
Vision or mission: is what the company is trying to achive over the medium to long term as
formally declared in its mission statement

GOAL and OBJECTIVE

Goal: an objective that an organisation seeks to achieve at some point in the future
Goal: is an open-ended statement of what one wishes to accomplish with no quantification
of what is to be achieved and no time criteria for completion.
Objectives: the end results of planned activity, states what is to be accomplished, by when
and should be quantified if possible

Analysis of the organisational’s external competitive environment to identify the

organisation’s opportunities and threats

Analysis of the organisational’s internal operating environment to identify the

organisation’s strengths and weaknesses

Selection of strategies that build on the organisation’s strengths and correct its weaknesses,
to take advantage of external opportunities and counter external threats
 Strategy management process: the set of processes used to determine the strategies
for the organisation
 Strategy formulation: the analiysis process used to determine which strategies an
organisation should use

Strategy implementation: the means by which strategies are executed, managed and
reviewed.
Strategy implementation is the process by which strategies and policies are put into action
through the development of :
• programs,
• budgets, and
• procedures.

Strategy evaluation (as part of the feedback process)

The evaluation of programs, budgets, other resources and procedures.
This process might involve changes within the overall culture, structure, and/or
management system of the entire organization.
 STRATEGY DEVELOPMENT PROCESS
Source: Prof. Dr. H. Sucherly

The Strategic Sweet Spot

The strategic sweet spot of a company is where it meets customer s needs in a way that
rivals can’t give the context in which it competes
Context (technology, Industry, demographics, regulation, and so on)

Porter’s Generic Competitive Strategies

STUDENT’S 1ST GROUP ASSIGNMENT
1. What kind of catering business you plan? (type of business, location, reasons of
choice)
2. Create the Goals, Objective, Vision and Missions
3. Analyse Internal and External environment (using SWOT analysis)

SOURCES OF READINGS:
Enz, Cathy, A., 2010, Hospitality Strategic Management: Concepts and Cases. Second
edition. USA: John Wiley & Sons, Inc.
Evans, Nigel, 2005, Strategic Management for Tourism, Hospitality and Events. Second
edition. London and New York: Routledge
Hill, Charles W.L., Jones, Gareth R., and Galvin, Peter, 2004. Strategic Management: an
Integrated Approach. Milton, Qld 4064, John Wiley & Sons Australia, Ltd.
Hunger, J. David and Wheelen, Thomas L. And, 1993, Strategic Management, Fourth
edition. USA, Addison-Wesley Publishing Company, Inc.
Keller, Kevin Lane. 2008. Strategic Brand Management: Building, Measuring, and
Managing Brand Equity. Third Edition. New Jersey: Pearson Prentice Hall, Inc.
Kotler, Philip and Kevin Lane Keller. 2009. Marketing Management 13th Edition. New
Jersey : Prentice Hall
Kotler, Philip & Gary Amstrong. 2003. Marketing : An Introduction. Prentice Hall
International, Inc
Porter, Michael E, Competitive Strategy, Free Press, 1980
Sucherly, 1999. Manajemen Pemasaran Jasa. Bandung: Pasca Unpad
Wheelen, Thomas L. and Hunger, J. David, 2006, Strategic Management, Tenth edition.
New jersey, USA: Pearson Prentice Hall, Inc.

PRODUCT IN CULINARY BUSINESS

REVIEW ON MARKETING MIX
Marketing mix as a our guidance in planning culinary business …..
 Marketing mix is the set of marketing tools that the firm uses to pursue its
marketing objectives in the target market.
 McCarthy (1999) classified these tools into four broad groups that he called the
four Ps of marketing then Extended into 7 Ps.
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical Evidence

Product
A product is a complex mix of tangible and intangible attributes including packaging,
colour, price, manufacturers prestige, retailers prestige, and manufacturers and retailers
services which the buyer may accept as offering satisfaction of wants or needs
(Stanton, 1981)

Product is a combination of tangible and intangible aspects offered by the manufacturer to the
customers.
It can be defined as a bundle of satisfaction and dissatisfactions offered by company to the
customers at a point of time. Their physical attributes what they do, how they differ from
competitors and what benefits they provide.
The products can be classified as durable and non durable, consumers and industrial goods,
perishable and non perishable, finished and semi-finished etc. (Kotler and Keller, 2006)

Product attributes:
1. Design
2. Technology
3. Usefulness
4. Convenience
5. Value
6. Quality
7. Packaging
8. Branding
9. Accessories
10. Warranty

Product Life Cycle

Strategies to Extend Product Life Cycle
 Modify the product
 Change the packaging
 Increase promotion
 Reduce the price
 Find new market
 Encourage increased use of product

‘PRODUCTS’ IN CULINARY BUSINESS

Products in culinary business are PRESENTED IN MENU

MENU PLANNING: FROM DESIGN TO EVALUATION

RATIONALE
 Every food business starts with the menu.
 The menu dictates much about:
- how your operation will be organized and
managed,
- the extent to which it meet its goals, and
- even how the building (and interior) should
be designed and constructed, or what kind of uniform employees must wear.

Menu Definition: Menu is a list of foods and beverages offered to guests or customers in a
restaurant (food service outlets)

The list should be accompanied with price for each item, dishes brief explanation, and
other informtion that will ease the customers to choose dishes

Menu Must:
Satisfy Guest Expectations
 Reflect your guests’ tastes
 Reflect your guests’ food preferences
 Ascertain your guests’ needs
Attain Marketing Objectives
 Locations
  Times
 Prices
 Quality
 Specific food items
Help to achieve Quality Objectives
 Quality Standards: visual appeal (shape, size, color), palatability (flavor, taste),
texture (consistency, tenderness), temperature
 Nutritional concerns: low-fat, high-fiber diets, vegetarian
Cost-Effective
 Commercial
financial restraints
profit objectives
 Institutional
minimizing costs
operational budget

Menu must be Accurate !!

Truth-in-menu laws exist in some localities, cannot mislabel a product
 “butter” must use butter not margarine
 “fresh” must be fresh, not fresh frozen
 “homemade” not purchased “ready-to-heat”
 “USDA Choice” actually “USDA Good”
 And more ……

Truth-in-menu
 Grading (foods are graded by size, quality, in line with official standards)
 “Freshness” (cannot be canned, frozen or fresh-frozen)
 Geographical origin (cannot make false claims about the origin of a product)
 Preparation (if the menu says baked, it cannot be fried instead)
 Dietary or nutrition claims (supportable by scientific data)

Menu Planning Constraints

1. Facility Layout/Design and Equipment
• Space
• Equipment available
• Work flow
• Efficiency
2. Labor Availability
 Number of Employees
 Required Skills
 Training Programs
 Labor Law
3. Ingredients availability
 Standard recipe
 Availability of the ingredients
 Seasonal ingredients
  Cost, including Miscellaneous cost (delivery, flight charges)
 Storage
Remember to follow SPS !!

The Menu and the Food Service Operation

The Menu Helps to Determine Staff Needs
Variety and complexity increases,
number of personnel and skills
increases
 Production staff
 Service staff
 Back-of-house staff (purchaser, storeman)

The Menu Dictates Production and Service Equipment Needs

Production needs
Keeping prepared products
Service needs
Plates, cutleries, etc.
Tableside service: carving utensils, gueridon, salad bowls, suzette pans, soup
tureens, large wooden salad bowl, rechaud, Voiture (heated cart for serving roasts), etc.

The Menu Dictates Dining Space

 Take Away Food: require limited or no dining space and the amount of square feet
required per person would be minimal.
 Fine Dining Room: which offers a huge salad buffet, or dessert selection, wide
aisles would be needed to allow guests ease of movement and moving of
equipment.

The Menu is a Factor in the Development of Cost Control Procedures

As the menu requires more expensive food items and more extensive labor or capital
(equipment) needs, the property’s overall expenses and the procedures to control them will
reflect these increased cost.

The Menu and the Service Plan

 Type and size of dinnerware
 Types of flatware
 Garnishes (place be service or production staff)
 Timing requirement for ordering
 Additional dining service supplies to serve the item
 Special serving produces
 Special information (doneness of the steaks, over easy or sunny side eggs, etc.)

Menu Design
First impression is always important, the entire menu should complement the operation
 Theme
  Interior Décor
 Design (Merchandising)
 Creativity
 Material
 Color
 Space
 Type style and/or lettering
 Names of food items

Menu Design
 Description
 Popular items are at the top of a list
 Clip-on, inserts (daily specials)
 Beverage service notice
 Separate menus for each meal period
Description of the menu items)
• should be believable and made in short, easy-to-read sentences
• no description is needed for self-explanatory item. i.e. Low Fat Milk

Menu Styles
 A table d'hôte (a complete meal for one price)
 A la Carte (items are listed and priced separately)
 Combination (combination of the table d'hôte and a la carte pricing styles)
 Fixed menus: a single menus for several months
 Cycle menus: designed to provide variety for guests who eat at an operation
frequently - or even daily

Types Of Menus
 Breakfast (offers fruits, juices, eggs, cereals, pancakes, waffles, and breakfast
meats)
 Lunch (features sandwiches, soups, salads, specials; usually lighter than dinner
menu items)
 Dinner (more elaborate, steaks, roasts, chicken, sea food and pasta; wines,
cocktails, etc..)

Types Of Menus - Specialty

 Children’s
 Senior citizens’
 Alcoholic beverage
 Dessert
 Room service
 Take-out
 Banquet
 California (breakfast, lunch and dinner menu items on one menu book)
 Ethnic
Basic Rules Of Menu Planning
 Know your guest
- Food preference
- Price
- Age
 Know your operation
- Theme or cuisine
- Equipment
- Personnel
- Quality standards
- Budget

Common Sources For Menu Item Recipes

 Old menus
 Books
 Trade magazines, Culinary magazines
 Cookbooks for the home market
 Internet

Supplemental Merchandising Copy

Includes information such as:
 Address
 Telephone number
 Days and hours of operation
 Meals served
 Reservations and payment policies (incl T & S)
 History of the restaurant
 A statement about management’s commitment to guest service

Menu Layout
 Sequence:
 Appetizers, soups, entrees, desserts
Depends on the operation (side orders, salads, sandwiches, beverages)
Depends on popularity and profitability
 Placement:
 Artworks; space; boxes; clip-on; etc.

Menu Layout
Format:
 Menu’s size
 General makeup
Typeface:
 Printed letters
 Font size
Artwork:
 Drawings, photographs, decorative patterns, borders
Paper:
 Texture
Cover:
 Color, Texture

Common Menu-design Mistakes

 Menu is too small
 Type is too small
 Some of the operations’ food and beverages are not available
 No price for items
 Tax and Service are not included
 No Special offer for regular guests
 Basic information about the items are not included
 Dirty menu book
 Tip-ex
 Blank pages

PLACES IN CULINARY BUSINESS

• INTRODUCTION: CATERING BUSINESS IN OPERATIONS:
1. “To provide food and drink for public”
2. “To provide food service for a business that caters banquets and wedding”
3. “Is the business of providing food service at a remote site or a site such as hotel,
public house (pub), or other location”.
• FACTORS AFFECTING THE GROWTH OF CATERING BUSINESS
SIMPLY BECAUSE MORE PEOPLE ARE EATING OUTSIDE THEIR HOME

TYPES OF CATERING OPERATIONS

General Market
• Hotels
• Restaurants
• Popular catering
• Retail stores
• Banqueting/ conferences/ exhibition
• Leisure catering
• Motorway service station
• Pubs & Wine bar
• O.D.C

Restricted (Captive) market

• Transport catering
• Clubs
• Industrial (own catering) (contract)
• Welfare
Cost provision in restricted market
 • Industrial catering
• Schools
• Universities & colleges
• Hospitals
• The forces
• Prisons

Types of Catering Operations

• Commercial Operations
• Industrial or Non Commercial Operations
• Welfare Operations

Commercial Operations
• Target is to increase the profit so they provide luxury decoration, comfort to their
guest.
• Ex:Hotels, Restaurant, Café
Non-Commercial Operations
• To fulfill need of the people then earn profit.
• Ex: School, colleges, hospitals, hostel
Welfare Operation
• To help the others ,this kind of operation do the social work run by help of
government as well as donation of people.
• Ex.: Orphan houses, elderly and homeless

Sectors of F & B Industry

• Hotels
• Restaurants
• Ethnic restaurant
• Coffee shop
• Specialty Restaurant
• Banquet
• Cafeteria
• Snack Bars
• Bistros
• Discothèque
• Nightclub
• Pub
• Bar
• Family style
• Destination restaurant
• Casual restaurants
• Cafes
• Coffee houses
Hotels
• Commercial Sector of Food and Beverage provide luxury services.
 • Other services on: Accommodation, Food and Beverage, Laundry, Swimming pool,
Transportation, Convention hall, internet etc.

Restaurants
Ethnic Restaurants. Offering many of the standard ethnic or national dishes (which are
now appearing within a range of other menu types).
• Indonesian, Oriental, Asian, Indian, Spanish, Greek, Italian are just some of many
types of ethnic Restaurants
Coffee Shop
Banquet
Cafeteria
Snacks Bars
• Informal Restaurants done quick service.
• Also have a counter for self Service.
• They are specialize in snacks and light meals, soda, ice creams etc.

Bistros
• Bistros are those restaurant which are located near the river.
• Smaller establishment with check tablecloths, bentwood chairs, cluttered décor and
friendly informal staff.
• Offer honest basically robust cooking.

Discotheque
• Is a Bar which offered lite snacks along with some soft drinks.
• Is a place where men and women of younger age group go to relax by workouts.
• Fast dancing and loud music with psychedelic lights are it’s sufficient feature.

Nightclubs
• Normally open in Nights at Dinner, Dance and Celebrate.
• A Dispensing Bar always provided Decor is Lavish while service is elaborate.

Pubs
• The pubs are Famous for their expensive wines and Spirits and other alcoholic
drink.
• In Pubs Bartenders produces exclusive cocktails and great sommelier to keep the
wine glass full.
• Bars
Family style Restaurant
Coffeehouses
Café’s
Café’s and coffee shops are informal restaurants offering a range of hot meals and made-
to-order sandwiches.
Cafés offer table service. Many cafés are open for breakfast and serve full hot breakfasts.
In some areas cafés offer outdoor seating.

Types of Catering
  Industrial catering
 Off-Site catering
 Club catering
 Transport catering (airline catering, railway catering, ship catering)
 Welfare catering
 Retail stores Catering
 Restaurant Catering
 O.D.C (Outdoor catering)
 Leisure linked catering

Industrial Catering
• Similar to workers canteen, cafeteria.
• Purpose of industrial catering is to give refreshment to the workers.
• Large quantity of food produced in dinning room with limited choices.
• Meals, tea, snacks are provide time to time.

Off-Site Catering
• Marriages and Festival concerned.
• Temporary structure maintained.
• Food served in open air.
• Simple Buffet is maintained.
Club Catering

Transport Catering
Transport catering categorizes in three parts:
• Railway Catering
• Airline Catering
• Cruise Catering

Passengers of Airline:
• Executive class
• Economic Class
• Business class

Executive Class
• A-la-Carte food is served with limited choice.
• Silver service has been done.
• Proper Cover spread with cutlery, crockery and glassware.
• Separate service for vegetarian and Non vegetarian.

Economic Class
• Table-d-Hote menu offered with limited choices.
• Vegetarian and Non-Vegetarian food served separately.
• Food served in a simple plastic sheets.
• Plastic forks, spoons and thermocol cups for tea coffee are given.
Cruise Catering
 • Cruise ships mostly just like hotel on water
• People cruising within countries in Europe or within states in USA
• The purpose of cruising for leisure, holiday or business for several days on ships

Welfare Catering
• This kind of catering collect a number of people, specially those homeless, poor,
orphanages, eldery.
• A number of people participate and take meal.
• Provide self Satisfaction
• Funded by government or donations

Thank You !

THE PROCESS IN CULINARY BUSINESS

In common culinary business operation, the process in culinary business can be divided into two
main functions:
 Food production process
 Service process

Food production process:

basically transforming raw materials (food ingredients) into ready to eat products or food
The process including:
• Washing/ cleaning
• Cutting/ trimming
• Mixing/ blending
• Cooking
• Plating
• Serving

The aim is to achieve:

1. Favourable food cost: in hotel/ restaurant business at between 30% to 35% average food
cost
2. Quality of products: clean, neat, shape, size, color harmony, flavor, taste, texture,
consistency
4 BASIC STEPS OF PROCUREMENT PROCESS
1. PURCHASING
- Direct purchase
- indirect purchase (through suppliers)
Purchasing methods:
- retail purchase
- bulk purchase
- wholesale purchase
Documents:
- purchase requisition
- purchase order/ market list
- sps (standard purchase specification)
- inventory report

2. RECEIVING
Control on:
- type of items
- amount of items
- quality of items
Start with and pay high attention on:
- perishable items
- non perishable items
- other supplies
3. STORING PROCESS
Start with and pay high attention on:
- perishable items
- non perishable items
- other supplies
Pay attention on:
- store’s temperature,
cleanliness, humidity
- grouping and positioning of items
- labelling/ marking
-FIFO

4. ISSUING PROCESS
Document:
- menu
- food store requisition
Pay attention on:
- par stock/ reorder point

PREPARATION PROCESS
The aims:
• Quality of products
• Pre determined food cost
Based on:
 Menu
 B.E.O.
 Standard recipes
 Standard portion size
• Standard presentation

PREPARATION PROCESS
 Measuring: weigh, volume,
 Wash, peel
 Cutting methods: trimm, shape: jardiniere, cubes, etc
 Pre-cook: blanch, boil,fry, etc
 Pack and preserve
 Storage control

COOKING AND FINISHING PROCESS

Based on:
 Guest’s orders/ order slip
 Standard recipes
Cooking and finishing process
 Cooking methods
 Degree of doneness
 Storage control for cooked food
Require:
 Punctuality
  Speedity
 Accuracy

FINAL CHECK AND SERVICE

The aims:
 Quality of products
 Pre determined food cost
Based on:
 Standard portion size
• Standard presentation

Final check and service

 Cooking methods
 Portioning (size, accompaniments, garniture, etc. )
 Service control

THE PROCESS IN CULINARY SERVICES

Preparing the Table and Guest’s Service Sequence

Tableware
 Includes dinnerware, flatware, Beverage ware, hollowware, & linens
 Table linens
o Table coverings, table runners, napkins, & placemats
o Table cloths should hang 6-8 inches for casual; 10 inches for formal

 Dinnerware
 Includes plates, cups, saucers, & bowls
 Types:
o China
 Most expensive
 Elegant & durable
 Mainly white, off-white or pastels; patterns available
 Stoneware
 Heavier
 More causal
 Less expensive
o Earthenware
 Moderately priced
 Less durable than stoneware
o Pottery
 Least expensive
 Thick & heavy but breaks easily
o Stoneware, Earthenware, & pottery come in a variety of colors & patterns
o Glass-ceramic
  Strong & durable
 Relative inexpensive
 Available in plain white and many patterns
o Plastic
 Lightweight, break-resistant & colorful
 Stains & scratches easily
 Used mainly for casual dining

 Flatware
 Also called silverware
 Includes forks, spoons & knives
 Types:
o Sterling Silver
 92.5% silver with copper added for strength
 Heavy & durable
 Most expensive
 Will tarnish
o Silver Plate
 Base metal w/ silver coating
 Coating wears off after few years
 Less expensive but still costly
o Stainless Steel
 Alloy composed of steel, nickel, & chromium
 Durable & less expensive
 Sterling & silver plate require polishing
 Stainless does not tarnish
 Be careful of using acids with all
o Can cause discoloration, rusty and pitting,
 Consider shape, weight & way it feels in your hand before purchasing

 Beverage ware
 Also called glassware
 Come in many shapes & sizes
 Consider the look, feel, & the way it looks with your dinnerware
 Made of
o Lead glass
 Higher quality
 More expensive
o Lime glass
 Lighter, more brittle
 Less expensive
o Plastic and melamine
 More casual
 Least costly
 Types:
o Tumblers
  Do not have stems
 Include juice, highball & coolers
o Stemware
 3 parts
 Bowl
 Stem
 Foot
 Include water goblets, wine glasses, Champagne flutes

 Hollowware
 Includes bowls, tureens, Pots, & pitchers
 All are used to serve
 Can be made of metal, glass, wood, ceramic
 Tends to be expensive, fragile, difficult to store
 Can match dinnerware or complement it

Table Setting (cover)

 The arrangement of these place settings is called a cover.

 Two covers: Basic Cover and Elaborate Cover
 The placement of pieces in a cover is based on tradition and function.
 Allow at least 20 inches in width for each cover.

Basic Cover (Place Setting)

 Center the plate on the cover about 1 inch from the edge of the table.
 In a restaurant where diners will not fill their own plate (such as in buffet service),
leave a space for the plate on the cover.
 Flatware is arranged in the order in which it is used starting at the outside and
working toward the plate.

Elaborate Cover (Formal Setting

Service Sequence
01. Greet and seat the guests
02. Open the napkins
03. Serve the butter and the bread
04. Offer iced water
05. Describe and recommend dishes
06. Take the F&B orders
07. Transfer/ deliver the guest orders
08. Correct & remove covers
09. Serve beverage
10. Announce the starter
11. Serve the starter
12. Clear the starter
13. Announce the main course
14. Serve the main course
15. Clear the main course
16. Announce the dessert
17. Serve the dessert
18. Take the coffee / tea order
19. Serve the coffee / tea
20. Prepare and present the bill
21. Accept payment
22. See the guests leaving
23. Clearing and re-setting
24. During the service period 

THE PROCESS OF DELIVERING PRODUCTS (F & B) TO CONSUMERS OR GUESTS IN

RIGHT MANNER
SERVICE PROCEDURES:
 WELCOMING AND SEATING GUESTS
 OFFERING MENU
 POURING DRINKING WATER
 TAKING GUESTS ORDER
 REPEAT THE ORDER
 INFORMING GUESTS ORDER TO THE KITCHEN
 TABLE ADJUSTMENTS
  SERVING FOOD & BEVERAGES TO GUESTS
 OFFERING COFFEE OR TEA
 DELIVERING GUEST’S BILL
 THANKING GUESTS

Taking Reservations
Before you take booking, make sure you know the answers to the following type of
questions:
 What kind of food do you offer?
 Do you accept credit cards?
 When are you open?
 Are children welcome?
 Are you air conditioned?
 Is there a no-smoking area?
 Do you have car parking facilities?
 Do you cater for functions?
 How do I find your establishment? 

Most reservation are taken over the telephone. A friendly and helpful telephone manner is
essential.
 Always answer the telephone promptly when it rings. Three times ringing rule !!
 Have a pen and the reservations book on hand
 State clearly the name of the establishment and your name
 Offer the caller your assistance: “Good morning, may I help you?”
 Answer any questions clearly and politely. If you do not know the answer, find
someone who does or offer to call back.
 Before beginning to take the booking, make sure you have the reservation books in
view. 

The first things to be clarified are when the table is required and how many people they are
in the party.
Only when you have established that a suitable table is available, then ask for the following
details:
 The host’s name (have it spelt out if you are not sure)
 The number of person
 The time of arrival
 A contact telephone number (mobile)
 Any special requirements
 Confirm all the details by repeating the name, the day and date, the time of arrival,
the number in the party, contact phone number and tell the reservation policy.
 Complete the conversation by thanking the guest.

The first things to be clarified are when the table is required and how many people they are
in the party.
Only when you have established that a suitable table is available, then ask for the following
details:
  The host’s name (have it spelt out if you are not sure)
 The number of person
 The time of arrival
 A contact telephone number (mobile)
 Any special requirements
 Confirm all the details by repeating the name, the day and date, the time of
arrival, the number in the party, contact phone number and tell the
reservation policy.
 Complete the conversation by thanking the guest.

Price Concepts in Culinary Business: Revenue, Expenses, Profit

Adopted from:
Principles of Food, Beverage, and Labor Cost Controls, 9th Edition
© John Wiley & Sons, Inc. 2009

Important Concepts
 Revenue is the amount of dollars (or IDRs) you take in.
 Expenses are the costs of the items required to operate the business.
 Profit is the amount of dollars (or IDRs) that remain after all expenses have been
paid.
Revenue - Expenses = Profit

COSTS (or EXPENSES)

There are four costs a Food & Beverage Manager must concern with:
1. Food costs,
2. Beverage costs,
3. Labor costs and
4. Overhead costs
 Food costs are the costs associated with actually producing the menu items,
including main ingredients, herbs, spices, seasoning, etc.
 In most cases, food costs will make up the largest or second largest expense
category you must learn to manage.

 Beverage costs are those related to the sale of beverages.

 It may also include the costs of ingredients necessary to produce these drinks, such
as cherries, lemons, olives, limes, mixers like carbonated beverages and juices, and
other items commonly used in the production and service of beverages.
  Labor costs include the cost of all employees necessary to run the business,
including taxes and benefits. In most operations, labor costs are second only to
food costs in total dollars (or IDRs) spent.
 Overhead costs include all expenses that are neither food, beverage nor labor, such
as utilities, rent, linen, electricity, gas, water, etc.

There are various types of costs in F & B Operations

 Fixed costs are those that are normally unaffected by changes in sales volume.
 Variable costs are those that are clearly related to business volume.
 Semi variable costs have both fixed and variable elements.

Getting Started
 Good managers learn to understand, control, and manage their expenses.
 Numbers can be difficult to interpret due to inflation. Therefore, the industry uses
percentage calculations.
 Percentages are the most common standard used for evaluating costs in the
foodservice industry.

Understanding the Profit and Loss Statement

 A simplified statement that details revenue, expenses and profit, for a given period
of time, is called the profit and loss statement (P&L). It lists revenue, food and
beverage cost, labor cost, other expense, and profit.
 The P&L is important because it describes the efficiency and profitability of an
operation.

Simplified Profit and Loss

 The primary purpose of preparing a P&L is to identify revenue, expenses, and

profits for a given time period.
 Common percentages used in a P&L statement

Simplified Profit and Loss Statement

PRICING THE DISHES
Start with calculating the costs of food, by:
 Identify the items on the menu
 Create OR find the recipes
 Calculate the food cost
 Calculate selling price for each items

A recipe is a list of ingredients and the quantities of those ingredients needed to produce a
particular item along with a procedure or method to follow:
A Standard Recipe is the recipe that has been designated the correct one to use in a given
establishment.
 It means that a recipe which has been tried out, sampled, written down,
photographed if necessary and made good for a particular establishment.
 A standard recipe of an establishment not necessarily be good nor suitable for the
other.

ASSIGNMENT AND EXERCISES:

Now, please:
1. Discuss and Plan your Menu
2. Create the Recipes
3. Calculate the Recipe Cost
4. Calculate selling price, by using 33% Food Cost.