Adding menu items is a more significant process than many operators realize, but the process becomes much easier if an operator ensures the new food checks off three key criteria.
1. Add items that reflect your restaurant’s identity
I recommend re-evaluating menus every six months to ensure it represents the restaurant correctly. This may seem like a strange suggestion, but every operator is susceptible to mistakenly chasing trends and veering away from their identity.
Trends come in quickly and dominate the culinary conversation. Oftentimes, they are considered an easy fix to boost sales, but chasing the latest fad is just as likely to derail an operation’s identity as it is to boost its success.
Operators seldom have a moment to evaluate these trends and determine whether they would work in their own restaurants. Or, if they do make the time, it can sometimes be too late. That’s why it’s so important to really consider the value in menu additions.
First and foremost, operators must ask themselves if the menu change is representative of what they and their business stands for. If they answer yes to this, it’s time to consider concrete details. For one, can they purchase and price the item profitably? Can they consume the minimum order quantity within the shelf-life of the various ingredients?
The next step is creating a list of criteria that indicate success. Operators should determine the number of servings per day to make a profit off a new menu item after taking other expenses into consideration, such as the cost to source new ingredients, create new signage, and increase labor.
Restaurants also need to be clear on their customer goals, namely whether they’re trying to earn new customers or increase repeat business.
2. Find multiple applications for menu additions
A while back, Greek yogurt was the trending ingredient that every operator was adding to his or her menu. It was a hot breakfast item, and it seemed like an easy addition to any menu. Many operators assumed they could add it to the breakfast menu and it would sell enough to lift final meal ticket prices.
The problem was that yogurt cannot sit on a shelf. Many operators weren’t equipped with a menu that could utilize other items with a Greek yogurt add-on. However, if they’d planned further ahead, restaurants could have incorporated the yogurt into sauces, dips, or dressings rather than letting it spoil. As an add-on, the Greek yogurt could have boosted the sales of high-cost, center-of-the-plate items and check totals and therefore overall check totals.
A good rule of thumb to determine whether a new ingredient is a revenue booster or a loss leader is to consider the following: If you aren’t using a product or ingredient in at least two of the three dayparts, you’re just extending the menu, not strengthening it. If you choose to add an item and it is not creating revenue, you need to get more creative with how you are using the item to avoid wasted food costs.
Necessity is the mother of invention. No truer words apply to this situation. Your creativity and proactivity in menu planning will be what keeps you floating if a new item sinks.
3. Add items that add customers
Think of a restaurant with a lot of items on its menu.
Often, this is a case of one operator seeing that their competition down the street has item X. They don’t know how much of item X the competitor sells, but they put it on their menu anyway. Many operators fail to understand that it’s not the number of items that they have on their menu that steals shares, but rather what they choose to do with it.
Operators who simply copy a menu item must consider why a diner would choose to break from their habit of buying the same item from a competitor and instead buy it from you. A better strategy is for operators to keep their eye on the white space of what competitors aren’t doing. Where can you play that is different enough to attract competitors’ audiences but also not so different from the rest of the menu that it alienates them?
How you choose to menu those share-stealing items is up to you. But the tried-and-true way to test your ideas is by regularly serving limited-time offers. LTOs are a great way to test success and viability; they work best when operators give their team members specific questions to pose to diners to determine how much they are enjoying the item.
It also helps to keep track of what else customers are ordering with that item and how add-ons can possibly be plated to enhance the experience.
Once operators have these metrics, they can determine whether a new dish or ingredient has enough menu applications to yield less than 5 percent product waste and ensure a healthy bottom line.
Operators may think that only big chains have the time and resources to conduct proper menu engineering. But with thoughtful planning and strategic thinking, the independent operator and smaller brands can take these lessons and make them work, too.
Dimitra Rizzi is the CEO of Elohi Strategic Advisors, as well as an entrepreneur and foodservice expert. She started her career at Wendy’s International where she was promoted to director of operations before leaving to open her own 32-unit bagel restaurant franchise. She then worked at Sara Lee where she developed enterprise-wide training. She has since held multiple executive-level and C-suite roles at publicly-held, family-owned, and private equity–held businesses.