Celebrities and chefs go hand-in-hand . Nowhere is this more apparent than in the successful partnership between chef Nobu Matsuhisa ( far left ) and the actor Robert DeNiro ( center , next to chef Gordon Ramsay ), who opened the Nobu Hotel in Caesars Palace Las Vegas . The 11,200-square-foot dining area and adjacent lounge feature a sushi bar , private dining area and circular central bar . It ’ s also the only U . S . Nobu offering teppanyaki tables .
Typically , COGS represents 30 percent to 35 percent of revenue . Premium steakhouses will likely be higher . Operations that are lower than 30 percent COGS are usually quick-serve outlets or specialty small-menu venues such as a pasta bar , Asian noodle bar or taco shack . When COGS rise above 35 percent , this can usually be attributed to three factors :
LOSS FACTOR 1 : Mismatch of Product Quality to Restaurant Positioning
Food is expensive . It ’ s not appropriate for a steakhouse that sells a steak for $ 25 to serve prime steak . Organic heirloom tomatoes should not be served on salads at the coffee shop unless you ’ re the premium casino in town and charge $ 18 for the salad .
A deep dive into matching the quality of product to the price of product can have an immediate impact on a restaurant ’ s bottom line .
However , the inverse applies as well . If a restaurant is positioned as a farm-to-table operation but is not performing well , the worst decision would be to stop buying local ingredients and revert to the Sysco weekly ingredient . That would mean a short-term gain for a long-term loss , as the quality of the food would then diminish .
In this situation , an analysis of why the restaurant is failing is more important . Perhaps it ’ s the wrong product for the market . Perhaps the restaurant isn ’ t being marketed to the local populace . Maybe the menu is too diverse and is resulting in too much food waste .
LOSS FACTOR 2 : Too Many Ingredients
In designing a menu , the focus should not only be on quality dishes that will resonate with the key demographic , but dishes that can share perishable ingredients .
While the Cheesecake Factory has a 100-item menu , you should not . Economizing ingredients is one of the greatest ways a restaurant can save on COGS . Unless the venue is a barbecue venue that roasts whole pigs on a spit , offering a BLT , a pulled pork sandwich , a bánh mì wrap and a club sandwich is inefficient . Choose one meat from the pig and make it apply to multiple items .
For example , the BLT could evolve into a Cuban BLT , where the pulled pork is used for the bacon , the bánh mì wrap is replaced with a Lechon Asado wrap , and the club becomes the “ House Specialty Club ” with pulled pork instead of ham . The menu has now been enhanced and four ingredients have been replaced with one .
Not only does this reduce food cost , as inevitably there will be less wasted , but the more frequently used ingredients will now be fresher , increasing the overall quality of the restaurant .
Alternatively , you can skip the pulled pork and offer lots of bacon — people love it .
LOSS FACTOR 3 : No Scale
All loading docks need a scale , and every non prepackaged item needs to be weighed ! Seasoned food and beverage or hospitality professionals weigh everything — if you don ’ t , you could be overpaying .
When venues don ’ t weigh food deliveries , vendors can deliver light loads , or meat and fish can start to disappear between the loading dock and refrigerators . Requiring that food is weighed and quality checked is a standard operating practice that must be in place at every venue ’ s loading dock .
Bob Boughner is a senior partner at Global Market Advisors . Steve Gallaway is managing partner of Global Market Advisors . GMA is the leading provider of consulting services to the gaming and hospitality industries .
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