Food and Beverage Cost Control Overview PDF

Overview of the Industry and Managers Role Food and Beverage Cost Control (FBCC) Darren T. Molano Topic Outline: 01 Familiarize with the Food and Beverage Industry 06 02 Learn the role of Food and Beverage in terms of forecasting and costing 03 04 5 0...

Overview of the Industry and Managers Role Food and Beverage Cost Control (FBCC) Darren T. Molano Topic Outline: 01 Familiarize with the Food and Beverage Industry 06 02 Learn the role of Food and Beverage in terms of forecasting and costing 03 04 5 0 The History, Organizational Structure, and Management of Restaurants What is a Restaurants? A restaurant is a business that prepares and serves food and beverages to customers. Meals are generally served and eaten on the premises, but many restaurants also offer take-out and delivery services. Restaurants provide a space for dining that combines food service, hospitality, and ambiance to create a memorable experience for customers.  The History, Organizational Structure, and Management of Restaurants A Brief History of Restaurants  Ancient Origins: The concept of public eating places dates back to ancient civilizations, such as Greece and Rome, where travelers could find food and rest in taverns or inns.  Medieval Europe: In the Middle Ages, European inns provided food to travelers, but these were primarily for the lower class. Wealthier individuals had private cooks.  The First Restaurants (18th Century): The term "restaurant" emerged in Paris in the mid-18th o century. The first modern restaurant was opened in 1765 by a Parisian named Boulanger, who served "restorative" broths (hence the name "restaurant"). By the late 18th century, restaurants became popular in o Paris, offering individual meals from a menu, a concept different from the communal eating arrangements of inns and taverns.  The History, Organizational Structure, and Management of Restaurants  19th Century and Industrial Revolution: o The Industrial Revolution brought urbanization, and with it, the proliferation of restaurants. Dining out became more common, and different types of restaurants began to emerge, catering to various social classes and tastes.  20th Century to Present: o The 20th century saw the rise of fast food, fine dining, and themed restaurants, with globalization bringing diverse cuisines and dining concepts worldwide. o The digital age introduced online reservations, delivery apps, and cloud kitchens, transforming the restaurant industry. Organizational Chart of a Restaurant 1. General Manager (GM): 2. Executive Chef/Kitchen Manager: 3. Sous Chef: 4. Front of House (FOH) Manager/ Dining Manager: 5. Bar Manager: 6. Servers and Waitstaff: 7. Hosts/Hostesses: 8. Kitchen Staff (Cooks, Line Cooks, Prep Cooks): 9. Dishwashers and Bussers: 10. Marketing/Social Media Manager Management of a Restaurant  Staff Management: o Recruiting, training, and retaining skilled staff is critical to a restaurant's success. o Effective scheduling, clear communication, and performance management are essential for maintaining smooth operations.  Financial Management: o Budgeting, controlling costs (food, labor, overhead), and maximizing profitability are key responsibilities. o Regular financial analysis helps in making informed business decisions.  Customer Service Management: o Ensuring a high level of customer satisfaction through attentive service, quality food, and a welcoming atmosphere. o Handling customer complaints and feedback effectively to maintain a positive reputation.  Inventory and Supply Chain Management: o Efficient inventory management ensures fresh ingredients and prevents waste. o Building relationships with suppliers and negotiating favorable terms is crucial.  Marketing and Promotions: o Creating and executing marketing strategies to attract and retain customers. o Leveraging social media, special events, and loyalty programs to build brand loyalty.  Health and Safety Compliance: o Adhering to health regulations and ensuring the restaurant is clean and safe for both employees and customers. o Regular training and audits help maintain high standards. Overview of the Industry The food and Beverage industry is incredibly diverse The food and beverage industry, in particular, has witnessed a significant shift towards embracing diversity and inclusion. From workforce representation to cultural culinary experiences, diversity plays a pivotal role in bringing about innovation, creativity, and a broader understanding of different cultures. Overview of the Industry  What is the difference between a star restaurant to a carinderia? 1. Scale  But the commonality is that they both sell food 2. Ambience and beverage to a target 3. Menu market they hope will be 4. Clientele satisfied. And they both hope to be profitable.  Two goals: decrease cost and increase profit. Overview of the Industry  In the U.S, travel and tourism comprises the nations largest service export industry, and 3rd on retail industry next to automotive sales and food stores  The Philippines has pushed past the three million international visitor mark for the year as it closes in on the government’s full-year goal of 4.8 million arrivals.  According to information from the Department of Tourism (DOT), international visitor arrivals reached 3,000,079 as of 19 July 2023., with tourism receipts since January rising by 502% to Php212.5 billion (US$3.88 billion).  Casinos, Restaurants, Hotel and Motel are among the most profitable. Overview of the Industry  Food service industries is considered as the foundation of many successful inter related industry. 1. Agriculture (farm to table) 2.Transportation (air, land, sea) 3.Manufacturing (food ) The Role of F and B Manager  In the burgeoning food service industry, the role of the food and beverage manager is carry out to four major activities 1. Communication 2.Cost control 3.Revenue enhancement 4.Forecasting  Communication  Communication is the on going process of exchanging information between different departments and people both within and outside the organization. Communication varies on different factors such as verbal, written and sometime non-verbal. Communication through verbal and non verbal (pictures and prices) creates a negative or either positive feedback. Another example is a mini bar. 1. Housekeeping: inform the front desk before releasing the room for check in 2. Bell staff: to inform the front desk if they notice that a guest mini bar is unsecured 3. Front Desk to inform guest about the mini bar and its used and to forward sales to accounting 4. Maintenance: to install reliable secure lock and temperature control 5. Accounting: to track disputed charges and financial reporting Cost Control  Costs also referred as expense describe the sum of all money paid out for  These cost should be goods and service during a given period of time. These are the goods and service used in obtaining revenues control in order to 1. Production Cost. Cost that are incurred to make a product like chicken increase profit. entree. These cost are usually grouped into three main categories 1.1. Direct Material consist of those raw material inputs that become integral part of finished product ex. Raw chicken breast for cordon bleu  When cost is greater 1.2. Direct Labor consist of labor cost that can be easily traced to a product such as cook hourly payroll than revenue= LOSS 1.3 Production Overhead consist of all production cost other than direct material and direct labor. Example equipment maintenance and facility cooling cost  Revenue is greater 2. Non- Production Cost these cost are for financial and reporting purpose, than cost= PROFIT these cost are typically classified as selling(marketing) cost and administrative cost. 2.1 Marketing Cost cost of making sales 2.2 Administrative Cost these cost include all executive, organizational and clerical cost thatare not classified as to production or marketing cost. Revenue Revenue term used interchangeably with income or sales, is money received by business minus cost and discounts in a period of time Income statement is a financial statement that summarize the amount of revenues earned and expenses incurred by a restaurant over a period of time. It is considered the most important financial report because its purpose is to measure whether or not the business achieved its primary objective of making an acceptable profit. Example of Financial Statement: Food and Beverage Sales 1,000,000 Less: Cost of food and Beverage 319,000 Salaries and Wages 325,000 Restaurant Occupancy Costs 60,000 Corporate Overhead 30,000 General and Administrative Exp. 30,000 Other Expenses 180,000 Profit 56,000 Solving Compute the following: 1. If the company’s cost of F and B is 500,000, Cost of labor is 300,000, having a Sale of 1,000,000. How much is the Company’s Profit? 2. Having food and beverage sale of 450,000, cost of labor is 150,000 and a Profit of 100,000. How much is your Cost of food and beverage? 2. If your food and beverage cost is 200,000. 500,000 is your total sales of food and beverage. Given your labor cost of 250,000. Occupancy cost of 60,000. How much is your Profit? Forecasting Forecasting is the process of estimating or predicting future expenses and revenues. It involves the company’s future performance. An integral part of the planning process. -Forecasting can be accomplish using statistical method or by estimating. -Estimation is the most commonly used method. 3 types of estimation 1. Sales team approach- estimate product sales based on client contacts and contracted banquet event order(BEO) 2. Customer Expectation Approach- management collect and judges information based on customer surveys 3. Executive Approach- this method combining and averaging top executive’s views.  Primary disadvantage of forecasting techniques that employ estimates is that they cannot be verified or assessed objectively until after the fact.  Having ang “86” in an item is an indication of a wrong forecasting SEATWORK 1. The company financials indicate that it is losing money because of over inventory, but your chef told you that he won’t be able to reduce the inventory for fear of running out of stock. What possible measure you would suggest and why? 2. How does forecasting connect with food spoilage? 3. What suggestion would you come up to reduce the labor cost of a declining sale in a business? 4. What is the best Qualification that a F and B Manager should poses? Why? 5. What is more important in a business Profit or Customer Satisfaction? Thank You