Speeding Menus to Market Boosts Profits


Shaving time off menu rollouts can mean big payoffs in additional revenue

Shaving time off menu rollouts can mean big payoffs in additional revenue

Given the fluctuations in food costs and slim restaurant margins, taking price on menus is sometimes necessary. And the faster you do it, the bigger the impact to your bottom line.

The U.S. Department of Agriculture reports that beef has risen roughly 30 percent since 2004 to record highs today. Red meat costs continue to climb due to unrelenting drought across the Midwest, California, and Texas that has resulted in the smallest U.S. cattle herd in decades. Fewer cows means higher dairy prices as well. Shrimp costs more, too, because of the lingering EMS (Early Mortality Syndrome) virus in Thailand—the world’s largest exporter of the crustacean.

About 40 percent of all chain restaurants have short-term supplier contracts, so they’re especially vulnerable to price increases. And since food typically represents the largest expenditure for restaurants, they must carefully manage this fluctuating expense. When prices of popular ingredients increase as dramatically as they have in recent years, even the best supply chain management and cost-control measures aren’t enough.

Revising Menus Painlessly

Restaurants typically pass upticks in commodity pricing on to consumers as a last resort. But when it’s time to take price, “speed-to-market” matters. The faster restaurants get revised menus into customers’ hands, the faster they can offset higher supplier costs.

For example, a restaurant chain with 145 locations that realizes $100 per location, per day, in additional revenues by taking price on just one item can gain $217,500 in increased revenue if it can get updated menus in front of customers two weeks faster. If a chain of 1,000 restaurants does the same, that’s $1.4 million in additional revenues.

Deciding to raise menu prices, though, can be almost as difficult as the logistics required to make it happen—especially if a restaurant has multiple locations. Pushing out a new menu campaign is tedious and time-consuming unless you use technology to streamline the process.

Technology: The Critical Component of Menu Speed-to-Market

Process automation can do all of that while simultaneously reducing menu cycles by 20 to 40 percent and boosting incremental sales. That is, restaurants can put technology to work for them and eliminate the need for multiple vendors, approvals, pre-press checks, and field deliveries.

With a web-to-print solution like industry-leading Trabon MenuNet, multiple users—e.g., franchise owners and corporate locations—can easily design their own menus online and generate actual on-screen proofs in real-time. Corporate marketers supply pre-approved options for such elements as featured items, layouts, and pricing recommendations from which restaurant marketers choose, and the web-based system does the rest.

And if the system includes a centralized database, it can feed data in real time to electronic mediums such as online ordering systems, mobile apps, and consumer websites. Another benefit of fully functional menu-management software is accuracy. Since data is treated as a single record, there are fewer errors when the system translates it to printed menus, online content, or other marketing materials.

To expedite shipping and distribution, restaurants should maintain all menus and printed assets under one roof so vendors and stores avoid having to deal with multiple suppliers (and locations) to procure materials. By partnering with one company that can do it all—production, printing, and fulfillment—menus can be delivered in the same packaging and shipped at the same time as support materials. Restaurants that are spread across the lower 48 are best-served by a centrally located partner (in the Midwest/Rockies/Great Plains) so that shipping lead time variations don’t hamper launch efforts.

Today’s technology makes changing menu prices quick and easily done via a single web session, price tier update, or spreadsheet upload. There’s no need to manually execute each of these tasks.

Fewer Errors, Less Time, More Profit

A web-based system that takes menus from design to delivery reduces the number of human touch points, decreasing opportunities for people to make mistakes. That saves time and money. Plus, improved accuracy and corporate-provided menu elements help restaurants produce menus faster and project a professional, consistent brand image across locales.

Enabling multiple users in different locations to easily and quickly revise and order menus—as well as POP materials, marketing collateral, direct mail pieces, and more—that are delivered directly to their doorsteps shaves weeks off the production cycle. There are no agencies coordinating with printers, pre-press checks, or corporate marketing middle-man. Everything’s automated, simplified, and fast.

That’s good news for restaurants that can’t profit from item price increases until revised menus are in stores. When restaurants decide price adjustments are prudent, time is money—the faster new menus are in restaurants, the more revenues will multiply.

The opinions of contributors are their own. Publication of their writing does not imply endorsement by FSR magazine or Journalistic Inc.

Trish Balmos

Trish Balmos is Chief Marketing Officer at Trabon (www.trabongroup.com), the leading provider of menu versioning solutions and marketing services support for the restaurant industry. Trabon’s online central repository for menu data simplifies the task of menu changes across all mediums—print, electronic, POS, and more. Trabon clients include Applebee’s, Red Robin, California Pizza Kitchen, Ruth’s Chris Steakhouse, BJ’s Restaurants, O’Charley’s, Landry’s, and many other popular chains.

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