FOOD SERVICESCHAPTER 9

LEARNING OBJECTIVES

TRACE THE HISTORY OF THE FOOD AND BEVERAGE INDUSTRY.

ENUMERATE THE DIFFERENT TYPES OF RESTAURANTS.

EXPLAIN THE IMPORTANCE OF FRANCHISING TO THE RESTAURANT INDUSTRY.

DISCUSS RESTAURANT PROFITABILITY AND CALCULATE FOOD COST PERCENTAGE, GROSS PROFIT AND AVERAGE GUEST CHECK.

CALCULATE THE RESTAURANT’S BREAK-EVEN POINT.

EXPLAIN THE ROLE OF THE MENU IN A RESTAURANT’S SUCCESS

DIFFERENTIATE AIRLINE CATERING FROM RESTAURANT CATERING

DESCRIBE RESTAURANT PROMOTION

HISTORY OF FOOD AND BEVERAGE SERVICE

Early History Certain groups of people cooked together in big groups and that the inns provided a crude menu.

Roman Era There were some establishments which offered sausage or roast meat, bread and a cup of wine.

After the fall of the Roman Empire

The manors and castle’s provided food to large numbers of people.

In 1200’s Public cook shops were open in London which offered precooked take-out food.

The Royal Families of Europe Introduced cutlery, table linen, crystal glasses, new foods such as Turkey and potato, and road side tavern.

16th Century British inns and taverns began to serve one meal a day at a fixed time and price and at a common table.The meal was known as ORDINARY and the dinning rooms

were called ORDINARIES. the most famous ordinary in London was the castle and Lloyd's which was meeting place for merchants and ship owners17th Century The Ordinaries became

fashionable Clubs and Gambling places as well as centers for political activities.

19th century the word RESTAURANTS was used in Paris for dining room serving dishes.

1834 The famous Delmonico's was opened in New York.

Early 19th’s Several events were significant to the food industry occurred.

1904 First hamburger was served, at the St.Louise World’s Fair.

Roy Allen & Frank Wright Founded the first stand of root beer

Second World War Brought many changes to the American Public.

1960’s Fast food establishments merged.

At present Modern popular cuisine including French, Chinese, Mexican and Japanese have become common inmost cities.

The role of food plays in tourism may not a Direct an Indirect attraction.

TYPES OF RESTAURANTS

FAMILY OR COMMERCIAL RESTAURANTS

FAMILY-STYLE OR COMMERCIAL RESTAURANTS, OFFER A WIDE MENU OF “MEAT AND POTATO” SELECTIONS WITH A PRICE RANGE THAT APPEALS TO AN AVERAGE FAMILY INCOME.

COFFEE SHOPSARE CHARACTERIZED BY: FAST FOOD SERVICE

.CAFETERIAS ARE USSUALLY LOCATED IN A

SHOPPING CENTERS, OFFICE BUILDINGS.

GOURMENT RESTAURANTSGENERALLY REQUIRE A HIGHER INITIAL

INVESTMENT THAN OTHER TYPES OF RESTAURANTS, BECAUSE THEY REQUIRE AN EXPENSIVE AMBENCE AND DÉCOR.

ETHNIC RESTAURANTSFEATURE THE FOOD OF SPECIFIC REGION OR

COUNTRY.FAST-FOOD RESTAURANTSHAVE INCREASED IN THE PAST 20YEARS AS

PEOPLE HAVE BECOME MORE MOBILE.

DELI-SHOPSPROVIDE DELICATESSEN FOOD SERVICE,

COMBINING TRADITIONAL DELICATESSEN COLD MEATS AND CHEESES WITH TAKE-OUT SANDWICHES, SALADS AND SIMILAR ITEMS.

BUFFET RESTAURANTSESTABLISHED ON A COMPLETELY SELF-

SERVED BASIS.TRANSPORTATION RESTAURANTSTHERE IS NATURAL LINK BETWEEN

TRANSPORTATION AND FOOD SERVICE.

FRANCHISING

ARE MAJOR COMPONENT OF THE FOOD SRVICE INDUSTRY, PARTICULARLY IN FAST FOOD SECTOR.

FRANCHISE ARE BENEFICIAL TO THE FRANCHISEES BECAUSE THEY PROVIED OPERATIONAL, TRAINING, LAYOUT AND DESIGN ASSISTANCE, LOCATION ASSISTANCE, MANAGERIAL EXPERTISE, GROUP PURCHASING POWER, AND MOST IMPORTANTLY, THE IDENTIFICATION OF A WELL KNOWN BRAND SUPPORTED BY REGIONAL, NATIONAL, AND INTERNATIONAL ADVERTISING AND PROMOTION.

FRANCHISED RESTAURANTS CAN EASILY GET FINANCING FROM LENDING INSTITUTIONS THAN INDEPENDENTS.

RESTAURANT PROFITABILY

FOOD COST PERCENTAGEFOOD COST PERCENTAGE IS

OFTEN TO USE TO MEASURE A RESTAURANTS MARKETING SUCCESS.

FORMULA: DIVIDE, FOOD COST FOR A

PERIOD (A DAY, A WEEK , A MONTH) BY SALES FOR THE SAME PERIOD THEN MULTIPLY IT BY 100 .

FOR EXAMPLE:

IF THE COST OF FOOD FOR 1MONTH IS $40,000 AND SALES IS $100,000 THE FOOD COST WOULD BE:

$40,000 $100,000 IS EQUAL TO =0.4 0.4 x 100= 40%

GROSS PROFITITEM COST

PRICESELLING PRICE

COST PERCENTAGE

GROSS PROFIT

12

$4.00$1.00

$8.00$4.00

5025%

$4.00$3.00

IN THIS ILLUSTRATIN, IT WOULD BE BETTER TO SELL ITEM 1 RATHER THAN ITEM 2 SINCE ITEM 1 HAS A HIGHER COST PERCENTAGE, A HIGHER GROSS PROFIT AND HENCE, A CONTRIBUTION TO NET PROFIT THAN ITEM 2. FOR EACH OF ITEM 1 SOLD 50 PERCENT FOOD COST, THERE IS A $4.00 GROSS PROFIT COMPARED WITH $3.00 WITH ITEM 2.

LABOR COST

LABOR COSTS ARE CONTROLLED BY EXPRESSING THEM AS A PERCENTAGE OF SALES ON A DAILY, WEEKLY OR MONTHLY BASIS ANG COMPARING THE ACTUAL COST WITH THE STANDARD DESIRED.

INSTEAD PF TREATING LABOR COSTS AS SEPARATE FROM FOOD COSTS, MANY SUCCESSFUL RESTAURANT LOOK AT THESE TWO AS A COMBINED COST. FOR INSTANCE, THEY SET A STANDARD OF 75 PERCENT ABOVE IN WHICH FOOD COST PLUS LABOR COSTS MUST NOT INCREASE. AS LONG AS THE OPERATION MAINTAIN THE COMBINED COST BELOW THIS LEVEL THE RESTAURANT WILL BE PROFITABLE.

IN A LARGE RESTAURANT, THE ORGANIZATION OF THE LABOR FORCE IS IMPORTANT TO LABOR COST CONTROL. THE FOOD SERVICE STRUCTURE IS ILLUSTRATED IN FIGURE 7.

AVERAGE GUEST CHECK

ANOTHER PROFITABILITY MEASURE USED IN RESTAURANT IS THE AVERAGE GUEST SPENDING OR AVERAGE CHECK. AVERAGE GUEST SPENDING IS CALCULATED BY DIVIDING THE TOTAL REVENUE RECEIVED FOR A PARTICULAR PERIOD(A DAY, A WEEK, A MONTH OR A YEAR) BY THE TOTAL NUMBER OF GUEST SERVED DURING THAT PERIOD.

FOR EXAMPLE:

IF 350 GUESTS ARE SERVED DINNER AND THE TOTAL REVENUE RECEIVED IS $3,610, THE AVERAGE SPENDING WILL BE:

$3,610 350 = $10.31

BREAK-EVEN POINT

BREAK EVEN IS THE POINT AT WHICH BUSINESS WILL MAKE NEITHER PROFIT NOR A LOSS. THE OPERATION FOR DETERMINING THE BREAK-EVEN POINT IS

FIXED COSTS CONTRIBUTION MARGIN

FIXED COST ARE THOSE COSTS THAT REMAIN

THE SAME REGARDLESS OF THE VOLUME OF BUSINESS. FOR EXAMPLES ARE SALARIES, INTEREST, DEPRECITION, INSURANCE RENT, AND THE LIKE. THE CONTRIBUTION MARGIN IS AVERAGE CHECK LESS VARIABLE COSTS. FOR EXAMPLE, IF A RESTAURANT HAS AN ANNUAL FIXED COST OF $125,000 AND AN AVERAGE GUEST SPENDING OF $10.00 AND ITS VARIABLE COST SUCH AS FOOD, LABOR AND OTHER IS 75 PERCENT OF REVENUE OR $7.50 PERCENT GUEST SERVED, ITS BREAK-EVEN POINT IS

$125,00 $2.50 =50,000

THE CONTRIBUTION MARGIN IS AVERAGE CHECK LESS VARIABLE COSTS OR $2.50 LESS $7.50. THE BREAK-EVEN NUMBER OF CUSTOMERS IS 50,000.

THE PROOF OF THIS IS

TOTAL REVENUE: 50,000 x $10.00 = $500,000

VARIABLE COST :50,000 x $7.50 = 375,000FIXED COSTS: 125,000PROFIT OR LOSS: O

FOOD SERVICE-------------------------------------------------

---FAST FOOD RESTAURANT

CAFETERIASTRADITIONAL RESTAURANT

CHAININDEPENDENT

SPECIALTY

BROAD MENU

SPECIALTY

ETHNIC

LOCAL

MENU

THE MENU IS THE BASIC PLANNING DOCUMENT FOR A SUCCESSFUL RESTAURANT.

THE MENU ALSO DETERMINES THE EQUIPMENT NEEDED AND THE INVESTMENT REQUIRED.

THE MENU CAN ALSO DETERMINE THE LABOR COST OF A RESTAURANT.

THE MENU CAN ALSO DETERMINE THE COST FOR UNIFORMS, THE CHASES, STORAGE AND SPACE AND ACTUAL FOOD COSTS.

AIRLINE CATERING

AIRLINES SPEND BILLIONS OF DOLLAR EVERY YEAR FOR FOOD PURCHASES. THE AVERGAE COST PER AIRLINE PASSENGER IS BETWEEN $1.00 AND $7.00 DEPENDING ON THE LENGTH OF THE JOURNEY. THE AMOUNT IS LESS FOR SHORTER TRIPS, SINCE PASSENGERS MAY BE OFFERED ONLY A NON-ALCOHOLIC BEVERAGE AND A LIGHT SNACK. FOR LONGER TRIPS, IN WHICH TWO OR THREE MEALS MAY BE OFFERED INCLUDING FREE ALCOHOLIC BEVERAGES, THE AMOUNT IS HIGHER. AROUND 3 TO 4 PERCENT OF AN AIRLINE’S TOTAL COSTS IS SPENT ON FOOD.

FOOD QUALITY

THE MAIN PROBLEM OF AN AIRLINE IS TO COOK THE MEAL ON THE GROUND AND SERVE IT SEVERAL HOURS LATER IN AN EXTRAORDINARY DRY CABIN ATMOSPHERE, SEVEN MILES HIGH TO DIFFERENCES AND WHOSE MAIN MOTIVATION IS TO TRAVEL RATHER THAN TO EAT.

LOGISTICS

TO PRODUCE HOT MEAL, THE AIRLINES HAVE TO PREPARE SPECIFICATIONS FOR RECIPE, INGREDIENTS, COOKING METHODS AND TEMPERATURES AND LABOR FOR EACH FLIGHT. ALL THIS REQUIRES A FORECAST USING THE ACTUAL PASSENGER RESERVATION FOR EACH FLIGHT INCLUDING AN ALLOWANCE FOR STANDBYS AND LAST-MINUTE RESERVATIONS IN ORDER TO HAVE THE CORRECT RAW MATERIALS, EQUIPMENT AND FOOD PRODUCTION STAFF FOR EACH SHIFT.

AIRPLANE GALLEYS

IN 1936 BY DOUGLAS FOR ITS DC-3

THE FIRST AIRPLANE GALLEY WAS DESIGNED MEALS PREPARED ON THE GROUND WERE KEPT HOT OR COLD IN INSULATED CONTAINERS ON THE AIRCRAFT.

WORLD WAR II THE INTRODUCTION OF LARGER AIRPLANES ENABLED THEM TO HAVE OVENS AND REFRIGERATORS ON BOARDS IN THEIR GALLEYS.

FLIGHT KITCHENSIN THE LATE 1930’S THE FIRST AIRLINE FLIGHT

KITCHEN WAS OPENED NEAR THE WASHINGTON D.C. HOOVER FIELD AIRPORT BY A GENTLEMAN NAMED MARRIOTT. HE HAD A RESTAURANT NEAR THE AIRPORT.

SOME AIRLINES HAVE THEIR OWN FLIGHT KITCHENS WHICH PREPARE MEALS FOR THEIR OWN PASSENGER. OTHER AIRLINES CONTRACT WITH AIRLINES THAT HAVE THEIR OWN KITCHENS. STILL OTHERS CONTRACT WITH AN OUTSIDE CATERING COMPANY THAT SPECIALIZES IN AIRLINE FOOD PREPARATION.

DIFFERENCE BETWEEN AIRLINE CATERING AND RESTAURANTS CATERING

AIRLINE CATERING IS DIFFERENT FROM RESTAURANT CATERING BECAUSE IN THE LATTER THE COOKS CAN MAKE LAST MINUTE ADJUSTMENTS. FOR EXAMPLE, A STEAK MIGHT BE PREPARED IN THE FLIGHT KITCHEN TO BE ACCOMPANIED BY A SAUCE AND VEGETABLES TO BE SERVED TWO HOURS LATER. DURING THIS TIME IT MUST BE KEPT HOT. IF THERE IS FLIGHT DELAY OF ONE HOUR,THE STEAK WILL BE STRINGY,

THE SAUCE WILL BE CONGEALED AND THE VEGETABLES WILL BE MUSHY.

IN AN ORDINARY RESTAURANT, A MEAL LIKE THIS WILL NOT BE SERVED BUT ON AN AIRLINE, THE SERVING CREW USUALLY HAS NO OTHER CHOICE BUT TO SERVE IT.

IN AIRLINE CATERING, THE LOGISTICS ARE VERY COMPLEX BUT AIRLINES EXERT GREAT EFFORTS TO SERVE GOOD MEALS TO THE PASSENGERS. THEY EVEN RESPOND TO THE NEEDS OF PASSENGERS ON SPECIAL DIETS IF GIVEN ENOUGH NOTICE.

RESTAURANT PROMOTION

MANY RESTAURANTS ADVERTISE THEIRMENU OR PARTS OF IT IN NEWSPAPER. LOCAL NEWSPAPER ADVERTISEMENTS ARE USED BY MOST RESTAURANTS AS THE MAJOR FORM OF EXTERNAL PROMOTION. SEVERAL RESTAURANTS ADVERTISE IN THE YELLOW PAGES OF THE LOCAL TELEPHONE DIRECTORY. SOME USE LOCAL RADIO OR TELEVISION STATIONS. THE MORE POPULAR RESTAURANTS AND NATIONAL RESTAURANT CHAINS ADVERTISE IN AIRLINE IN-FLIGHT MAGAZINES, COMSUMER TRAVEL MAGAZINES AND TRAVEL TRADE PUBLICATIONS. MANY RESTAURANT TRY TO FOSTER GOOD RELATIONS WITH NEARBY HOTEL EMPLOYEES SUCH AS FRONT OFFICE STAFF, BELL DESK PERSONNEL AND DOORMEN BECAUSE THEY ARE OFTEN ASKED BY HOTEL GUESTS TO RECOMMEND GOOD NEARBY RESTAURANTS. GOOD PUBLIC RELATIONS AND WORD-OF-MOUTH ADVERTISING GENERATE A LOT OF BUSINESS