The Restaurateur Mindset: Managing Senior Living Food Costs

Operators across all sectors of senior living (and food service in general) are battling inflation and expense management. Being in the service industry and knowing that what we provide is a service of people serving people, labor has been a large factor in this conversation. But what operators are also fighting is the increases and struggles that come with managing their second highest expense - food costs.?

An unbelievable fact of the situation - as of April 2023, the Producer Price Index for All Foods remained more than 26% above its February 2020 reading. Add to this that many senior living operators do a poor job of waste management, and you have some serious opportunities to have a bloated food expense line. But the good news is that with the right focus on key areas and processes, you can reign that all in and keep your food costs in check for the most part. This is why you should think like a restaurateur. Their job is to maximize their profits on food, and that comes with a different mindset than you typically see in senior living. To create this mindset, here are four areas of opportunity that every operator should focus on in order to get the most for their food dollar:

Understand Your Menu Composition

Many times when senior living operators develop their menus, it is typically a bi-annual process. We do a big shift in menus seasonally, and then we let it go until the next menu rollout is due. While this is not inherently a bad thing, it can cause some reactive management and complacency in food cost management. Restaurateurs do not think this way. They are evaluating their menus regularly in order to maximize them. The best way to address this is to have the right menu management tools and processes in place. Doing regular reviews of your menu and menu inputs - things such as order guide, standardized recipes, production records - will let you see opportunities to make appropriate adjustments. The key though is to not just shop around for the best price, but find the right mix of price and quality to avoid wild swings in quality and satisfaction.?

Another thing that restaurateurs do is know the value of menu engineering. Understanding the value of menu items from a satisfaction and cost perspective will maximize your ability to manage your menu composition. Having the right systems in place will allow for this to be an easy and successful endeavor.

Install Systems for Inventory & Waste Management

Speaking of having the right systems in place, it’s important that you have regular processes to manage both your food inventories and your production and service food waste. Restaurants invest in the right systems and value knowing all of the inputs and outputs of their kitchens. When looking at waste, senior living operators typically are not very good at waste management. As a whole, the industry sees anywhere between 18%-20% food waste versus 7%-9% for commercial operators. Better production processes (avoiding bulk production when possible), better tracking tools and specific waste management initiatives will all create a lower waste percentage.

Inventories are also a big opportunity for senior living operators. First and foremost, if you don't do a monthly inventory, start now. This is food cost management at its simplest and easiest to find opportunities and issues. Also, simply adding weekly stock counts (a common practice in restaurants) of your top 15-20 cost items or largest movers can add up to 10% to your bottom line annually. Creating a consistent system and training multiple employees on how to take these inventories will allow for a successful inventory process for your operation.

Follow Your Data Trends

Creating within your food service culture a data-driven operation is key to being successful with managing your food costs. Whether you are capturing it or not, your kitchens and dining rooms are creating multiple data points every meal that you can use to maximize your operation. The best restaurateurs know their data, and use it daily to make decisions on all aspects of food cost management, We recommend finding the right software that can meet your needs, but at a minimum, manually capturing data from purchasing, production records, your point of sale, inventories, and waste logs will give you a great start and insights on what the trends are in your operation.?

The other thing to remember with data is that you have to understand G I G O - Garbage In, Garbage Out. If you are not collecting your data consistently or accurately, the trends that you get will not be reflective of what is actually happening in your various food service outlets. So having the right data will not only help you with managing food costs, it won’t be a waste of valuable employee time.

Educate & Engage Your Employees

Employees are the key to any foodservice operator's success. But to create a culture of employee engagement, you have to give your employees the WHY. They are the ones that are daily creating the food and experience in your community. But how do we do this? It starts with training RELENTLESSLY. Hiring and onboarding successfully is critical, and you have to develop the journey with the end in mind. Creating learning touch points, developing training partners, and having knowledge and skills checks are all key components. You also have to create a connection with the data. If you show them how the data not just benefits the company but how it can also impact them, you will see employee buy-in quickly grow and become a normal part of their daily routines. Showing value for them will help them to value it for you.

These are all items that will initially feel like more work. But once you set the stage with the process and then create and show the value of it all to the team, you will see the benefits and return on investment of your time and dollars. These will create better employees, increase resident satisfaction, and allow you to be surgical in your approach to managing food costs.

To learn more about these key drivers, you can email the Trestle Hospitality Concepts team at [email protected] or schedule an introductory consultation with us at your convenience.