How to Manage Food Costs

Toast Cafe

In May, the cost to customers dining in a full-service restaurant was 2.2 percent higher than a year earlier, according to the Bureau of Labor Statistics. The Bureau reported particularly steep increases in the costs of meats, fish, eggs, and produce; beef and veal prices in May, in particular, were 10.7 percent higher than in 2013.

David Scott Peters calls them locusts, those factors that constantly threaten food costs—disease, drought, inflation, and governmental instability.

“There are always locusts,” says Peters, founder of, which educates restaurant owners on how to create financially viable operations. “It’s all kinds of things completely out of an operator’s control. I tell operators they always have to prepare, because every quarter there’s something.”

And the industry has seen its fair share of locusts recently. This year, rising food prices have nabbed the headlines. With costs expected to hover at the same rate or even increase again in 2015, experts say it’s even more necessary for operators to examine how they manage food expenses for the coming year. Suggestions include implementing methods to track food waste, shopping suppliers, and creating a risk management system.

While a price hike is the first instinct to combat rising food costs, Robert Maynard, co-founder and CEO of Toast Café, an upscale breakfast and lunch eatery, says increasing menu prices should be a last resort. With four units in North Carolina and South Carolina, Toast Café orders a volume that allows it to negotiate with suppliers on food prices, Maynard says.

“If your food is going up 1 percent, you really should try to find that 1 percent somewhere else,” he says. “There are other ways to fight against the rising [food] prices.”

Maynard works diligently to manage all costs—wages, overtime, utilities, and paper supplies—along with the costs of food. That requires hands-on leadership.

For instance, Maynard suggests putting clear plastic bags in the kitchen trashcans to track food waste. “Go through it every day. Ask questions,” he advises. “If you find a decent piece of avocado, ask what happened.”

Aside from rising prices of produce, meats, and dairy, he says restaurants have a slew of other financial concerns moving forward. “You’ve got to worry about unionization and franchising. You’ve got to worry about the Affordable Care Act, [and] not just the cost of it, but the cost of explaining it to people. And wages. There’s more to it than food costs. You can never close your eyes on any of these issues.”


Add new comment