One of our veteran team members has been in the meat business for almost 50 years. To the many pricing peaks and valleys he’s seen over the decades, he remedies, “It’s not about us, but how we can help our customers to keep from paying more.”
This year we’ve seen tremendous price inflation on beef and pork. Beef prices are higher due to the low cattle supply, and pork prices are higher due to do the PED virus killing piglets. As consumers, we’re paying more for commodities like bacon and ground beef. On average, prices are as much as 20% higher than last year.
Our job as a partner to our customers at Buedel Fine Meats is to help them deal with rising prices and supply them with options to ‘keep from paying more’ than necessary in a rising market. How can you control costs in a rising market then? Here are five savings tips you can use:
1. Bill & Hold
An option we offer our customers when prices are on the rise is the opportunity to Bill & Hold. They make a volume purchase at current market rates, and we hold their inventory, delivering it to them as needed – it is a highly flexible solution.
This method gives customers a fixed predictable cost for as much inventory as they can purchase without having to take delivery all at once. Customers can then reap the benefit of a predictable food cost with locked-in menu profits on the items they select for delivery when they need them. One of our customers who took advantage of this option currently enjoys ground beef at 50% less cost than the current market price.
2. Reduce Portion Size
You can keep from paying more out of pocket while still keeping product quality intact by making portion size adjustments as a means of saving center of the plate cost. Reducing the portion size by just one ounce can deliver a 13% reduction in your out of pocket cash flow.
For example, let’s say you serve a 8oz Tenderloin Filet that costs you $18.00/lb. Your portion cost on this would be $9.00, but a 7oz portion cost would be $7.88, a cash flow savings of $1.13 per portion. This type of cost reduction can add up substantially over time.
3. Change Trim Specs
The more you trim off the steak or chop, the lower the finished good yield. The lower the finished good yield, the higher the cost. Evaluate your trim specifications and determine if you can adjust them to increase the yield and reduce your food costs.
Here are two examples of how this works:
If you’re serving a French Cut Bone-in Rib Chop, consider an un-Frenched version and offer it on your menu as a “Rustic Cut”. Leaving the meat on the bone [un-Frenched] can reduce your portion costs by as much as 20%.
For center-cut only steaks or chops on your ala carte menu, consider the options for purchasing full-cut steaks or chops. The yield difference can reduce your food portion cost by 10%-20%.
4. Use Alternative Cuts
Take advantage of value cuts, which you can offer on your menu at a lower price, yet deliver the same or higher margins for your operation. An example of these would be hanger steaks, bistro steaks and double cut bone-in pork chops.
5. Buy More & Decrease Deliveries
Purchasing more items when prices are rising seems like an oxymoron. However, consider how the challenges of your purveyor partners factors in the equation. If you purchase just one or two items from a purveyor, then that purveyor needs to configure your pricing to cover 100% of their distribution costs on just those items with each delivery.
Distributors will typically determine your average delivery size and set pricing accordingly. If you work with your purveyor, to purchase more of the items they offer and/or reduce by the number of deliveries, the purveyor will have more flexibility to spread their costs/margins over multiple items per delivery. This gives your purveyor the benefits of economies of scale and cost reductions that they can (and usually will) pass on to you. Remember, quality service purveyors want to earn your business.
Train your culinary staff to segregate cuts where they can best be utilized. Buedel also offers free trainings and consultations. We help staff members evaluate their options and educate them on alternative cuts, different trim spec options, and how to apply them to a variety of menu applications.
Be collaborative with your suppliers. Openly and honestly discuss win-win scenarios with them to find best solutions. In doing so, you will likely benefit over the long term and keep from paying more.