Portion Cost and Potential Profits
Consistency in the kitchen ensures both food safety and profitability. Portion control plays a huge role in the expenses of creating a menu item versus the profits acquired in said item, and assigning appropriate portion prices determines how much potential for profit your restaurant has! Portion cost is what the restaurant must pay for any given item including ingredients, equipment, labor, and time costs. Offsetting these costs by assigning prices appropriately can not only be profitable, but it can leave guests satisfied and coming back for more.
Standard portion cost involves a process wherein a restaurant must calculate the actual cost of any given menu item including but not limited to preparation, ingredient purchases, and plating. There are many ways to go about determining the standard portion cost for your dishes.
Cost per Unit Method - Many items can be purchased ready-to-use, such as cheesecake, for instance. In this, you divide the number of portions in each item (12 slices/pie) to get the individual cost of the product. While this doesn’t include cost of labor, plating, etc, it helps to get the product cost itself.
Yield Test - A yield test is a process in which raw product purchased in an “As Purchased” form is broken down into edible product and waste. The total weight, trim loss, and edible product calculations are used to determine the cost of each portion within a purchased product. You can determine edible yield with this equation: [(EDIBLE WEIGHT AS PURCHASED WEIGHT) x 100] = EDIBLE YIELD %
Cooking Loss Test - Unlike the yield test where the number of portions and the costs are determined prior to the restaurant’s cooking process; the cooking loss test is performed on products that need to be cooked before portioning and serving. Cooking Loss Tests are most often used on whole roast and poultry.
Standard Recipe - Most foodservice establishments have developed standard recipes for the menu items they offer for sale. These recipes include the name of the menu item, the standard yield, the standard portion, the name, and quantity of ingredients needed, and the standard procedures involved in preparing the recipe. While time-intensive to calculate, it’s necessary when assigning portion costs.
Choosing one of these methods to portion cost is essential to appropriately assign menu item costs for patrons, as it determines your margin of profit! You should figure a desired profit that you’re wanting to achieve in terms of percentage and tailor your menu pricing to that percentage above portion costs. The menu price should also consider potential profit and customer price acceptance as well, as this may boost the selling price while still maintaining acceptability. Competition, clientele, atmosphere, and labor all play a role in the final selling point!