How to use menu engineering and design to craft a profitable menu

For the majority of restaurant operators, solid profit margins can be difficult to achieve. Simply raising prices can alienate guests as can cutting portion sizes. One of the most effective ways to improve profit margins does not involve simply cutting food portions or raising prices across the entire menu. Instead, it involves utilizing menu engineering to identify those menu items within each category: appetizers, salads, entrees and desserts, that have the highest profit margins.

Let’s define menu engineering. Menu engineering is a strategic approach to designing and pricing your restaurant's menu with the goal of maximizing profitability. This means analyzing the performance of each menu item in terms of both popularity and profitability and then using this key data to optimize the menu layout, pricing, and promotion.

Key components of menu engineering

Item categorization

Menu items are classified into four categories based on their profitability and popularity:

• Stars: High profitability, high popularity.
• Plow horses: Low profitability, high popularity.
• Puzzles: High profitability, low popularity.
• Dogs: Low profitability, low popularity.

Menu analysis:

Using sales data and cost information, you can calculate the contribution margin (price minus cost of goods) for each menu item and assess their sales volume. Your costs should be determined by looking at the recipe cost per item based upon the most current cost of your ingredients. To do this means that your recipes/plate builds must be accurate and complete (be sure to include garnishes and condiments in the costing process). You may do this the old-fashioned way with Excel, but programs like Restaurant 365's recipe costing software can automatically calculate recipe costs using your standardized recipes, vendor price lists, and an ingredient cost database. Your sales information by menu item is typically available directly from your Point-of-Sale system and can usually be seamlessly integrated into your costing software.

Strategic adjustments:

• Highlight stars: Feature these high popularity, high margin items prominently on the menu to drive more sales. You should do this for each menu category.
• Plow horses: Increase profitability by adjusting portion and/or pricing.
• Reposition puzzles: Promote these items through specials or redesign to make them more appealing. This can include improving the menu item itself, improving the ingredients used, and revisiting your plating and garnish to maximize visual appeal.
• Minimize or eliminate dogs: Remove unprofitable and unpopular items to reduce waste and streamline the menu.

Crafting a profitable menu using menu engineering

Once you have the necessary data in-hand, your next step will be to implement that data into your menu design.

• Make data-Driven Decisions: Regularly update your menu engineering analysis to respond to changing guest preferences and ingredient costs.
• Strategic menu design: Use visual elements like boxes, bold fonts, or icons to draw attention to high-margin items. This is critically important if you want to draw your guests’ attention to your highest profit margin items within each menu category.

Learn and implement the "golden triangle" theory

For traditional two-page menus, guests’ eyes tend to follow a predictable path:

1. Center of the right page: This is often the initial place guests look. It’s considered the "prime real estate" for high-margin or signature dishes.
2. Top of the left page: After glancing at the center-right, attention shifts to the top-left corner.
3. Bottom of the right Page: Lastly, guests look toward the bottom of the right page.

• For single-page menus, guests typically scan in a Z-pattern, starting at the top-left corner, moving across to the top-right, and then scanning down diagonally to the bottom-left, then to the bottom-right.

Factors that influence eye movement

Menu design elements:

1. Highlighting: Items enclosed in boxes, with bold fonts, or accompanied by images naturally draw attention.
2. Spacing: Generous spacing around items makes them stand out.
3. Color and contrast: Use of contrasting colors can guide the eye to certain areas.

• Number of pages: The fewer the pages, the more likely guests will scan the entire menu.
• Typography: Larger or more unique fonts catch the eye first.

Strategic placement of menu items

1. High-Profit Items: Place them in areas where the eyes are likely to land first, such as the center-right section or the top of a list.
2. Pacing and Anchoring: Start each section with an anchor item (e.g., an expensive dish) to establish a reference point for pricing.

• Optimize pricing: Employ psychological pricing strategies (e.g., $9.95 instead of $10) or adjust prices based on customer willingness to pay. Downplay pricing on the menu by not printing it in a “bold” font and avoid using the dollar sign at all.
• Portion control: Analyze portion sizes to balance value perception and cost control.
• Make seasonal adjustments: Rotate in seasonal ingredients and specials to keep the menu fresh and cost-effective.

Benefits to your bottom line

• Increased Profit Margins: Focus on selling items that contribute the most to your profitability. Work with your servers to teach them to be “salespeople” rather than order takers and train them to sell your most profitable items.
• Reduced waste: Eliminate low-performing items that don't justify their place on the menu and in doing so, reduce your food waste.
• Improved customer satisfaction: Offer a menu that recognizes and aligns your guests’ preferences.

By utilizing your cost and sales data to engineer your menu along with understanding how guests read menus, your restaurant can strategically position items to influence choices, boost sales, and enhance the dining experience…and your bottom line!

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.

David Foster is the Principal of Foster and Associates, a restaurant, bar and hospitality consulting firm. He may be reached at dfoster@fosterandassociates.net.

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