Using Prepsheets to reduce our costs

November 06, 2021 6 min read

Tara Beattie

Director of The Caterers & SI Cafés

This newest ‘Prep Talk’ has been a while in the writing and apologies to those of you who follow these, sometimes other forces get in our way. So, back on track and with hopefully a very informative article on how we cut our costs whilst increasing our sales!

In 2019 our food sales went up by 10% but our food purchase costs went down by 1.2%! How? Well with proper analysis of data really and specifically that data we get from Prepsheets. This is why during lockdown we focused on redesigning Prepsheets into a webapp which is much easier to use than our excel version (available as a free download) and is available to other businesses who want to continue to offer great quality food to customers and still make a profit.

Using Prepsheets we have accurate real time costs on each menu item and can logically review how much we need to charge to make the correct margin. If that price we feel is too much for our customers then we look at each ingredient and identify if there is an outlier. This, for example, showed us that our some non high volume ingredients - mini marshmallows, vanilla extract were not being discounted from our suppliers and we were still paying list price for them. We were able to go back to our suppliers and renegotiate on these prices to bring down the cost of the menu items to ensure we could keep the products using these ingredients on the menu.

What we also did was look at our volume of sales and then our actual costs of these products. We ran reports on the volume of ingredients bought to make these items and again sat with our suppliers and focused our savings on our high volume purchases. This again enabled us to reduce our food costs and with increased volume came increased profits.

Sometimes, it was a process of tweaking the recipe by a gram or two which did not alter the quality of the end product but did alter the portion cost and therefore increased the margin.

Where none of the above solutions was not an option then we made the hard decision not to include certain items on the menu.

Training our chefs in Prepsheets they could immediately see how costs filtered to the plate - this seems obvious but kitchens are busy places with a lot of pressure so sometimes the invoices don’t fully filter up to the chef and back down to the dish. They started to take more interest in creating recipes now that they had clear insights into the costs and what parameters we had to hit with the sales price to insure the viability of our business. They got so excited when one chef pointed out that when he needed egg yolks for a dish and realised that if he also created a dish with just egg whites at the same time he got a better margin than the prepsheet calculated.

Another bonus of using Prepsheets was the identification of allergens in products where we did not expect there to be allergens and then looking at the recipes to identify if changes could be made to reduce the allergens in the recipe. We have found that the more allergens the less volume of sales so reducing allergens in our menu items again helped us increase sales and reduce waste and based on our stronger purchasing has also helped to increase our profit margins.

So, if you are running a restaurant, commercial kitchen, café or other hospitality business do you know the actual cost of each unit of each dish that your kitchen creates? Have you checked it recently? Do you know your highest volume and highest costing ingredients? When was the last time you negotiated with your suppliers? How much do you spend on waste a year - specifically Biodegradable Kitchen & Canteen Waste? If answering these questions is a little tough then Prepsheets will help you get answers.

To show you an example I am going to look at our Carrot, Coconut and Coriander Soup.

This is a very popular soup in our SI Cafés and from an allergen point of view really well placed - just celery and milk (Cream does wonders to soups!) Even with a generous dash of cream the calories contained in a portion of soup are very low which makes it a very attractive option for some people.

So, what about the cost, as you can see it comes in at just under €0.40 a portion or an 89.8% G.P.

This looks like we are ‘milking it’ as people might say. However, if you refer back to my first post regarding labour you will know that we try to keep our labour at 35% - so it costs us €1.44 in labour to make this soup.

Our rent and rates come in around 13.5% so that’s another €0.55 spent there. Then we have all other expenses - insurance,

sundries, computers etc. at 12% or €0.49 - so now how much are we actually making on our simple bowl of soup? It works out at 30% or €1.25. This is great however if you remember in that first blog I mentioned that 25% food cost is average and in this example the soup is 10%. Watch what happens when we add a slice of our homemade brown bread and an Irish portion of butter to Prepsheets - our margins and allergens change, showing how important it is to include everything on the plate in the recipe!

Compare this margin to our Caesar Wrap

And you begin to see the importance of a varied and balanced menu. This is also why we can offer a cup of soup with any sandwich for an additional €2.

If you have any questions on this just drop us a note on info@prepsheets.com