Menu engineering: designing your menu around what each dish earns

What menu engineering is, and what it is not

Menu engineering means looking at your menu the way an owner looks at the business: dish by dish, with the numbers beside it. Two American researchers, Kasavana and Smith, set the method out in 1982. For each dish you look at what it earns, how often guests choose it and where it sits, and then you decide what to do with it.

You do not need new guests for any of this. Menu engineering only shifts what the guests you already have order, towards the dishes your place keeps the most from. That means more margin without a price rise. A tidy menu also takes a guest less time to choose from, and fewer dishes mean less stock, less waste and a calmer kitchen.

It is not the same as menu design. Menu engineering is the arithmetic: which dishes earn their place. Menu design is the execution: typeface, layout, photos and colour. Building a menu from scratch is covered in the article on how to make a menu. This one is about the menu you already have.

Step 1: gather the numbers you already have

You do not have to measure anything new. It is all in your till and your purchase invoices. Pull the plates sold per dish over at least six weeks, twelve if you can, and add up every channel: dining room, takeaway, your own ordering site and the platforms. A dish that sits untouched in the dining room can be your bestseller online.

According to the Belastingdienst, food and non-alcoholic drinks in hospitality carry 9% VAT, takeaway meals included, and alcohol carries 21%. Work with the price including VAT and every dish looks about a tenth healthier than it is. Working through your whole menu is covered in the article on menu pricing, and costing a portion in the article on food cost.

Clean up your figures before you calculate. Keep starters, mains, desserts and drinks apart, because guests choose within a category. Leave out weeks with a closed day or a big event, and do not judge dishes that have been on the menu for under four weeks or were often sold out.

Step 2: work out what a plate earns

The number everything turns on is the contribution margin: what a plate leaves you once the ingredients are paid for, so the net price minus the purchase cost. Count it in euros and not in percentages. A percentage does not tell you what lands in the till, and you do not pay your rent in percentages.

A worked example, entirely made up but with realistic proportions: eight main courses and six weeks of till data. Menu prices include 9% VAT.

Together the ingredients cost €3,080.50 against €8,592.20 in net sales, so food cost is 36%. Now compare the pesto pasta with the burger. The pesto has the better food cost, 28% against 34%, yet it leaves €1.67 less on every plate. If a lot of your sales come through a delivery platform, work that channel out separately, because the commission comes off the amount.

Step 3: measure how often guests choose a dish

Popularity is a dish’s share of the plates sold in its category: the number sold divided by the total, times a hundred. This is called the menu mix. With 150 burgers out of 600 mains, the share is 25%.

The bar to measure against is the average share, 12.5% for eight dishes. The original method sets it at 70% of that, which is 8.75%, so that a dish just under average is not written off as a flop. In the example the choice makes no difference.

For margin, the bar is the average margin per plate sold: the total margin (margin per plate times number sold) divided by the number of plates. Here that is €5,511.70 divided by 600, so €9.19.

Step 4: sort your dishes into four boxes

Now put two questions side by side. Is the share above or below 12.5%? Is the margin above or below €9.19? That gives four boxes. The trade literature calls them stars, puzzles, plowhorses and dogs. Here they get names you can explain to your kitchen team in one breath.

Here is how the example falls out:

The two stars earn €2,558 between them out of the €5,511.70 the eight dishes bring in, nearly half. The matrix is a conversation and not a verdict: it tells you where to look, not what to decide.

What to do with each box

Stars: protect them

Keep the recipe, the portion and the quality the same, follow your supplier’s prices and make sure they are never gone by nine in the evening. Give them the most visible spot. Raise the price only in small steps: fifty cents is €0.46 net per plate, and across 150 plates that is almost €69 every six weeks if sales hold.

Hidden gems: let people see them

First find out why guests pass them by. Is the dish at the bottom of a long list, is the name vague, is there no photo? Then try this, in this order:

1. Move the dish to the start or the end of its category.
2. Give it a name and a description that say what is on the plate, and a photo on your ordering page.
3. Have your servers mention it as a tip of the day, and after four to six weeks check whether its share has risen.

Lower the price only if nothing else helps, because that strips out the margin you were keeping the dish for. And count honestly: a guest who picks the curry would have ordered something else. If twenty guests every six weeks choose the curry (€10.32) instead of the chicken satay (€8.16), that is 20 × €2.16 = €43.20 extra, about €375 a year. The gain sits in ten shifts like that, not in one.

Workhorses: make them earn more

Do not drop a workhorse, because guests often come for it. You have three levers:

• A small price rise. Moving the chicken satay from €15.00 to €16.00 gives €14.68 net instead of €13.76: €0.92 more per plate, and across 120 plates about €110 every six weeks if sales hold.
• Lower purchase costs through the portion, the supplier or a cheaper side, without the plate looking thinner.
• A suggestion that sells something alongside it, such as a sauce or a drink, and less room in the best spots.

Dead weight: cut it or rebuild it

First ask whether the dish plays a part the numbers do not show, such as being your only vegetarian dish or sharing ingredients with a star. The pesto pasta is one of those: the same pasta as the carbonara and hardly any purchase cost. It stays. The schnitzel sits at almost 47% food cost and accounts for 7.5% of the mains sold. It goes.

Layout and wording: what research does and does not show

The golden triangle claims a guest’s eyes land on the centre of the menu, then jump to the upper right, and only then to the upper left. An American eye-tracking study by Sybil Yang (2012, International Journal of Hospitality Management) had participants read a two-page trial menu. They read it like a book, left to right and top to bottom, with no fixed spot where the gaze stayed. It was a small study, but do not build your layout on a single theory.

Better supported is the order inside a list. In a study in Israel (Dayan and Bar-Hillel, 2011, Judgment and Decision Making), dishes at the start or the end of their category were chosen more often than in the middle, sometimes up to twice as often. In a real café the effect was clear only for soft drinks. So put your stars and hidden gems at the start or the end, and leave the middle to workhorses and dead weight.

An American study from Cornell University (Yang, Kimes and Sessarego, 2009), run in the student restaurant of a cooking school, found that guests given bare numbers spent more than guests given a dollar sign or prices written out in words. The researchers themselves say it may only hold for that lunch. Try 12.50 instead of €12.50, but do not treat it as a rule.

Names need no research, since a guest only chooses what they understand. “Chicken and rice” says less than “Grilled chicken thigh with jasmine rice and a lime and coriander sauce”. Name the main ingredient and the cooking method, write only what is true and keep your allergen information up to date. The NVWA expects hospitality businesses to give information on fourteen allergens in unpackaged food, in writing or by word of mouth with a visible notice that guests can ask. Check nvwa.nl for the current requirements.

Boxes, bold type and photos draw the eye. Use them for one or two dishes per category at most, because a menu where everything shouts has nothing that stands out. Examples are in the article on menus worth learning from.

Bring it to your ordering page

On a phone you read from top to bottom, and some of your guests never scroll past the first category. That makes order count for a lot online, and you can change it without a printer. An ordering page that is a copy of your paper menu leaves a lot on the table.

• Categories: put first whatever opens most orders, usually mains or pizzas rather than drinks.
• Within a category: stars and hidden gems at the top, and keep lists short enough to take in.
• Photos: give them to the dishes you want to sell, not the ones you like best. Six good photos beat fifty mediocre ones.
• Suggestions with the order: this is where workhorses earn their margin back. Someone who picks the chicken satay is offered a sauce or a drink. More examples are in [the article on your average order](post:check-size).

Online you also see what paper never shows. If your ordering system shows how often a dish is opened and how often it ends up in the basket, then many views but few orders points to price or description, and few views points to position. How to read those reports is covered in the article on reading your numbers.

Do you also sell through Thuisbezorgd or Uber Eats? The same matrix applies, worked out on what is left after commission. A star in your dining room can be a workhorse there. The platforms bring you new guests. Your own ordering page is where your regulars order, and where you know who they are.

Measure, repeat and what the matrix cannot see

Pick three to five changes, write down what you did and when, and leave the menu alone for four to eight weeks. For a seasonal menu, compare with the same period a year earlier, otherwise you are measuring the weather instead of your changes.

The point is to understand why. Did the hidden gem climb once it moved to the top? Then you know what works with your guests. Did a star’s margin slip? Then your supplier probably got dearer. Repeat the analysis every season, and whenever you add a dish or your purchase prices shift noticeably.

• The matrix does not see labour. A high-margin dish that takes a cook fifteen minutes earns less than it seems. Looking at staff and purchasing together is covered in [the article on prime cost](post:prime-cost).
• It does not see combinations either. A pasta that makes guests order a bottle of wine is undervalued if you only look at the plate.
• With small numbers, a single large group can change the box. Look at more than one period before you step in.

What to do on Monday

All you need is a morning, your till and your purchase invoices. Start with the mains, because that is usually where most of the money is.