January marks the advent of personal resolve to shed pounds and live healthier. For many restaurants, it also marks the start of new fiscal resolutions to cut costs, grow sales and reap higher profits.
Small box and portion control programs can help restaurants reduce costs and better manage their cash flow. One option that often goes unnoticed is steak-ready primal cuts.
People often purchase whole primal cuts of boxed beef or pork and break them down in-house to menu sized portions because they cost less per pound compared to purchasing portion control steaks or chops. For example, a whole beef tenderloin may cost between $9-$12/lb compared to $18-$24/lb for a portion cut tenderloin filet. Buying the whole beef tenderloin saves you money, right? Well, that depends. It’s all about the finished good yield.
If you’re serving 100% of that whole tenderloin as a filet on your menu, then one could argue money is being saved. However, you’d be doing so at the expense of quality and customer satisfaction because there is a tremendous amount of fat and sinew in a whole tenderloin that your customers won’t enjoy eating. That goes for strip loins, rib eyes, pork loins, veal and lamb loins too.
In reality, if you trim off anything you won’t be serving, you will end up paying more than you thought. Many restaurants either throw the trimmings in the trash, or use them for making other items like ground beef, which they could have purchased for less than $4/lb. This is where hidden costs exist and are most often ignored in food cost accounting.
Hybrid Cost Saving Solution
For those who want to purchase whole primal cuts and cut their own steaks or chops, a hybrid cost saving solution is to purchase steak-ready or chop-ready primal cuts. The most common steak-ready primal cuts are:
- Strip Loin
- Rib Eye
- Top Sirloin
- Outer Skirt Steak
- Flank Steak
When you buy steak-ready primal cuts, you will get the benefits of paying a lower price per pound compared to portion control steaks and chops, without the hidden food costs from waste generated working with whole primal cuts. You can also better manage your cash flow by purchasing only the quantities you need versus having to make larger cash outlays for master cases of boxed meats.
Enjoy the benefits of steak-ready primal cuts:
- No Waste – Cut your own steaks without the yield loss. You have the flexibility of cutting to any portion sizes you need for your menu quickly and easily without the waste and cost of inedible fat and sinew.
- No Hidden Costs – You will eliminate the hidden costs incurred from buying whole boxed primal cuts.
- No By-Products – You can purchase the by-products you would have generated from your supplier at a lower cost per pound: Ground Beef, Stew Meat and Fajita Meat.
- Roast Ready – Steak-Ready primal cuts can also be roasted whole and carved tableside. This gives you more options and more flexibility for your dollar.
- Less Cash Outlay – You can purchase just the quantities you need versus incurring the spend for whole master cases of boxed primal cuts. This can mean as much as an 85% reduction in cash outflows for meats for your business.
- Quicker Inventory Turns – You may buy quantities as needed on a just-in-time basis reducing your inventory carrying costs.
Do the Math
Take a look at the following example of how the buying options for tenderloin can play out:
BEEF TENDERLOIN COMPARATIVE PURCHASING OPTIONS
Key Terms To Know
As Purchased Cost:Total cost per pound of the product purchased.
Purge: Unusable, inedible materials, blood and the plastic packaging.
Yield: Amount of acceptable edible portions produced; measured by the pound.
Edible Portion: Total pounds of product that can be eaten.
Edible Portion Cost: The actual cost per edible portion.
OPTION A: BOXED BEEF/CUT YOUR OWN
Purchase Whole Boxed Beef Tenderloin
6# Tenderloin Purchased Cost…$11.50 lb.
Average Purge Loss 2% = 98% Yield
Actual Purchase Cost/lb before cutting: $11.50 ÷ 98% = $11.73 lb.
TRIM DOWN IN-HOUSE INTO A STEAK-READY PRIMAL
$11.73 lb ÷ 63% Average Yield = $18.62 lb.
37% Waste Yields 3.78# Edible Portion
OPTION A: TOTAL EDIBLE PORTION COST
Steak Ready Tenderloin: 3.78# x $18.62/lb = $70.38
OPTION B: PURCHASE A STEAK-READY PRIMAL CUT
Steak-Ready Beef Tenderloin
3.78# Steak-Ready Tenderloin As Purchased Cost…$18.05 lb.
No Purge Loss
Actual Purchase Cost/lb before cutting Steak-Ready Price…$18.05 lb.
No Waste 100% Yield 3.78# Edible Portion
OPTION B: TOTAL EDIBLE PORTION COST
3.78# x $18.05/lb = $68.23 3% Food Cost Savings versus Option A
This comparative example does not take into account the excess time, labor, and inconsistencies which can incur when you opt to trim whole boxed beef primal cuts in-house which can add to your total costs. Plug your own tenderloin prices into the formula. The methodology used above for beef tenderloin can also be applied to other cuts of beef, pork, veal and lamb.
Part of our job at Buedel Fine Meats is helping our customers find the best ways to trim costs and sustain quality. If one of your goals for the new year is to cut costs and drive more profit into your business, find your hidden food costs and free up cash flow by taking a closer look into steak or chop ready primal cuts.
We wish you a very Healthy & Prosperous New Year!