institute of hospitality management in prague

Institute of Hospitality Management in Prague

Zdeněk Juráň

Menu Engineering and Its Use in Gastronomy

Bachelor’s Thesis

2019

Bachelor’s Thesis

Menu Engineering and Its Use in Gastronomy

Zdeněk Juráň

Institute of Hospitality Management in Prague 8, Ltd.

Department of Hospitality Management

Bachelor´s degree program: Gastronomy, Hospitality and Tourism

Major field of study: Hospitality management

Thesis Advisor: Ing. Štěpán Chalupa

Prague 2019

Oath

I swear

that the bachelor dissertation titled Menu engineering and its use in gastronomy was

written by me independently, and that all literature and additional material used are

cited in the bibliography and that this version is exactly the same as the work

submitted electronically.

In accordance with §47b law no. 111/1998 coll. on higher education institutions, I

agree to my dissertation being published in its complete form in the publicly

accessible electronic database of the Institute of Hospitality Management in Prague.

Signature

……………………………………

Zdeněk Juráň

In Prague on

My enduring appreciation goes to my supervisor Ing. Štěpán Chalupa for his guidance

and valuable advice throughout writing of the bachelor dissertation. Special thanks go

to my sister Michaela and my partner Veronika who had the patience and time to assist

me in completing this thesis.

Abstract

Juráň, Zdeněk. Menu engineering and its use in gastronomy. [Bachelor‟s thesis]

Institute of Hospitality Management in Prague. Prague: 2019. Number of pages: 46.

This dissertation deals with, as the title of the thesis suggests, the use of menu engineering

within gastronomy in order to maximize the potential of the menu. Creating an attractive

menu is crucial for an establishment as it gives the guest the options to choose from. The

thesis is divided into three parts. The first part is theoretical, discussing the beginnings of

gastronomy, trends in gastronomy and different kinds of menu. The second part, analytical,

is where the actual menu engineering analysis is done using primary data from the selected

restaurant. The data consists of all the food items on the menu, names, the cost of

production, the selling price and the amount of unit sales of each item. The time period

during which the data has been collected is from the entire calendar year of 2018. The data

is then processed to receive the proper results. Based on these results it is possible to place

all of the menu items into one of the four quadrants of the BCG Matrix which are: stars,

plowhorses, puzzles and dogs. The selected restaurant offers thirty five items which are

separated into nine categories, based on the type of food they are. The third and final part

of this thesis describes the result of the menu engineering analysis and proposes different

ways of increasing popularity and profitability of the menu by modifying prices,

promoting, improving or removing certain items.

Keywords: Analysis, BCG Matrix, contribution margin, establishment, food, menu, menu

engineering, restaurant, popularity, profitability

Table of Contents Abstract .............................................................................................................................................. 5

Introduction ....................................................................................................................................... 1

Roots of gastronomy ...................................................................................................................... 2

Beginning .................................................................................................................................... 2

Contemporary ............................................................................................................................ 2

Trends............................................................................................................................................. 3

Restaurant classification................................................................................................................. 6

Services (forms of selling and serving) ....................................................................................... 6

Types of restaurants ....................................................................................................................... 8

Eating regimes ............................................................................................................................ 9

Breakfast/brunch/lunch and dinner .......................................................................................... 9

Types of menus ............................................................................................................................ 10

Table d’hôte ............................................................................................................................. 10

À la carte .................................................................................................................................. 11

Daily/seasonal/child ................................................................................................................. 12

Essential parts of the menu .......................................................................................................... 12

Most common mistakes ............................................................................................................... 13

Menu engineering analysis: .......................................................................................................... 15

Terms........................................................................................................................................ 16

Profitability ............................................................................................................................... 16

Popularity ................................................................................................................................. 17

Managing the results of the BCG Matrix .................................................................................. 17

Analytical part .................................................................................................................................. 19

Materials and Methods of Research ............................................................................................. 19

Target ....................................................................................................................................... 20

Processing and evaluating data ............................................................................................... 20

Introduction to the restaurant ....................................................................................................... 21

What the restaurant offers ...................................................................................................... 21

Application of Menu Engineering ................................................................................................ 23

BCG Matrix: ................................................................................................................................ 24

Menu engineering: Appetizers ................................................................................................. 28

Menu engineering: Soups ....................................................................................................... 29

Menu engineering: Salads ........................................................................................................ 30

Menu engineering: Noodles ..................................................................................................... 31

Menu engineering: Chicken ..................................................................................................... 33

Menu engineering: Pork .......................................................................................................... 34

Menu engineering: Beef ........................................................................................................... 35

Menu engineering: Duck .......................................................................................................... 36

Menu engineering: Sushi ......................................................................................................... 37

Suggestions ...................................................................................................................................... 38

Appetizers .................................................................................................................................... 39

Soups ............................................................................................................................................ 39

Salads ........................................................................................................................................... 40

Noodles ........................................................................................................................................ 40

Chicken ........................................................................................................................................ 41

Beef .............................................................................................................................................. 42

Duck ............................................................................................................................................. 42

Sushi ............................................................................................................................................. 43

Conclusion ........................................................................................................................................ 44

List of references .............................................................................................................................. 45

Table of figures Figure 1: percentage of unit sales ..................................................................................................... 22 Figure 2: Comparison between the menu cost and the menu contribution margin .......................... 23 Figure 3: BCG Matrix eample.......................................................................................................... 24 Figure 4: BCG Matrix of all items ................................................................................................... 25 Figure 5: Appetizers BCG Matrix .................................................................................................... 28 Figure 6: Soups BCG Matrix ........................................................................................................... 29 Figure 7: Salads BCG Matrix ........................................................................................................... 31 Figure 8: Noodles BCG Matrix ........................................................................................................ 32 Figure 9: Chicken BCG Matrix ........................................................................................................ 33 Figure 10: Pork BCG Matrix ........................................................................................................... 34 Figure 11: Beef BCG Matrix............................................................................................................ 35 Figure 12: Duck BCG Matrix .......................................................................................................... 36 Figure 13: Sushi BCG Matrix .......................................................................................................... 38

Table 1 ............................................................................................................................................. 21 Table 2: Appetizers table ................................................................................................................. 28 Table 3: Soups table ......................................................................................................................... 29 Table 4: Salads table ........................................................................................................................ 30 Table 5: Noodles table ..................................................................................................................... 32 Table 6: Chicken .............................................................................................................................. 33 Table 7: Pork table ........................................................................................................................... 34 Table 8: Beef table ........................................................................................................................... 35 Table 9: Duck table .......................................................................................................................... 36 Table 10: Sushi table ........................................................................................................................ 37

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Introduction

The author of this thesis chose this topic because of his passion towards dining

establishments, not just in the Czech Republic but all over the world. The author has

always been curious about how a menu is designed, how the prices are calculated and how

to update and change a menu to create a successful dining establishment. The experience

and knowledge gained throughout the writing of this thesis has helped the author

understand how to successfully perform the menu engineering analysis and how to work

with the results.

The thesis focuses on a selected restaurant in the south of Moravia, Czech Republic. The

goal is to perform the menu engineering analysis and prove how the establishment can

benefit from it.

The author, in the thesis analyses primary data provided by the restaurant owner/manager

about the menu, more specifically the amount of units sold, the production cost and the

selling price in the timespan of one year.

The thesis contains three parts, the theoretical, analytical and the conclusion. The first part

discusses the beginnings of gastronomy, the trends, the function of the menu and the menu

engineering analysis together with the BCG Matrix. The second part focuses on the

analysis of the selected restaurant and its results. Lastly, the third part focuses on the

author‟s suggestions regarding the menu items to improve popularity and profitability and

the conclusion of the thesis.

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Roots of gastronomy

Beginning

The development of gastronomy is strongly linked to the development of humans as a

whole. Unlike some animals, humans have the capability of surviving on more than one

source of food. Humans can adapt to their surroundings, and therefore eat a wide variety of

foods to stay alive. Having this ability civilizations can populate, survive, adapt and grow

in almost every corner of our planet.

Food gained a whole new meaning other than just satisfying a basic human need - hunger.

It became a source of pleasure. As time passed and various cultures came to life and

further developed, so did the trade between them. The merchants began to travel more and

therefore the demand for catering services grew. This also brought development to the

culinary art, namely in China, Egypt, Greece and Rome. (Burešová et al. 2014,)

Contemporary

In contemporary gastronomy we see an extensive variety and combination of all tastes and

cuisines. With the advances of technology, traveling and education, more information is

available to us. For example, ingredients used in the Japanese cuisine are available in

stores around Europe and vice-versa. Cuisines that were previously unobtainable unless a

person visited the specific country, are becoming not only available to the wider public but

also increasingly popular, which is a big change because previously traditional cuisines

were relying heavily on the ingredients in their immediate vicinity. Meaning that a town in

the Czech Republic near a lake would have recipes containing fish in them while other

cities with forests nearby would have more recipes oriented towards mushrooms and wild

berries. Nowadays it is not only about the food anymore, food now means more than just

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sustenance, it has become about the overall experience. In order to have the full experience

of a foreign cuisine people also tend to use the utensils of the specific cuisine, meaning that

for example for most Asian cuisines they use chopsticks. In some cultures it is traditional

to eat the food by hand or with the help of bread, eg. naan, this practice however is not

very popular. (Burešová et al. 2014)

Trends

In the last couple of years there has been an increase in new trends. The increase is a direct

consequence of technological advancements. The kitchens of a few decades ago and their

equipment share almost no similarities with the kitchens of today. With a larger variability

of equipment and preparation methods it is possible to create a larger variety of food in a

much smaller area as well as create food that would not be possible without such

equipment. This kind of equipment also allows home cooks to prepare certain foods that

they would not otherwise be able to prepare without the access to a professional kitchen.

Some of the examples of such equipment are the air fryer, slow cooker or the sous vide

machine.

These are not the only differences, high quality of food has become a standard rather than a

rarity. The possibility of ordering various ingredients from halfway across the world and

receiving them the next day, improving the taste and freshness has had a great effect on

food quality, especially regarding ingredients where the freshness is an essential aspect,

such as fish and sea food. Smaller portions with more intensive aromas are more common.

These are usually accompanied by more colors and decorations in order to improve the

aesthetic aspect of food and the overall experience. Specific styles of plating could be

considered art, for example molecular gastronomy tends to play with the visual aspect of

food and our preconceived taste expectations of certain textures and ingredients.

Attempting to create as little food waste as possible is also a new and a very positive one

that is usually closely connected with using ingredients that are locally and ethically

sourced. Green spices, herbs, plant ingredients such as, soy and vegetable oil are being

used more often with, a wider selection of pastry. More recipes contain less meat as the

main ingredient, some restaurants opt to offer only grass fed meat and many restaurants try

to offer at least some vegetarian or even vegan options. Beverages have become healthier

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as well, with freshly squeezed juices and mineral waters as an example. Open kitchen

space where customers have the chance to witness everything that is usually behind closed

doors in a restaurant has become quite a famous trend as well, making a meal even more of

an experience. Specifically this trend requires great responsibility, skill, order and hygiene.

As far as hygiene goes, it was the French Marie-Antoine Careme that was responsible for

taking the aspect of hygiene seriously, described in his book called “L‟Art de la Cuisine

Francais”. An example is the introduction of wearing hats in the kitchen. (Burešová et al.

2014, Zimáková 2004)

In the present day, we tend to be on-line throughout the majority of the day. We are always

connected somehow, mostly through our mobile phones and this leads us to a trend called

“food in hand”. The world of gastronomy is always evolving and with it come new trends

with new terminology, as noted by Burešová et al. (2014). Some of the new trends

regarding what and the way we eat that have become popular lately are:

- Amuse bouche, small portions of food, made to encourage appetite. Often created

with untraditional combination of tastes and ingredients.

- Organic food, food that is created using ingredients produced without any use of

chemicals, antibiotics, artificial coloring or anything that could somehow modify

the food are used. Organic food is popular among health conscious individuals.

- Brain food, food that is made to increase our concentration, improve our memory,

fill us with positive energy and good mood. Its aim is to increase our overall

performance.

- Convenience food, semi-finished food, pre-prepared food made to simplify our

work in the kitchen. Often used by students or people with a limited amount of

time. Most of the time this type of food is heavily processed and is high in added

sugar, salt, fat and artificial ingredients.

- Culinary art, the combination of the aesthetic, aromatic and taste factors while

preparing any type of food.

- Enogastronomy, combining wine with food. This can be done in two different

ways. Based on whether we are choosing wine to go with the food or food to go

with the wine. This process requires the cooperation between the head-chef,

sommelier and the individual customer. In either case there is always great

emphasis on the year/region of the wine.

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- Ethnic food, meals prepared in the traditional way of the specific region using

regional and fresh ingredients.

- Fast food, fast service and fast consumption of food. A trend which is very popular

in today‟s fast paced culture and is often consumed on the move. This food usually

tends to be highly processed containing high levels of added sugar, salt and fat

while at the same time having low nutritional value.

- Finger food, meals that are consumed by hand. Amouse bouche is a kind of finger

food, other examples include Spanish Tapas and American appetizers.

- Functional food, healthy foods with high nutritional value fortified with vitamins,

fiber and probiotics.

- Fun/fancy food, food that is made to impress. Aesthetics along with extremely

high quality ingredients are the priority.

- Fusion cuisine, fusion of two or more cuisines that would normally not be

combined, usually mixing different kinds of ethnic food. This type of cuisine

requires extraordinary skill, knowledge and experience.

- Glocal cuisine, a new trend which involves local gastronomy (recipes and

traditions) made with global ingredients and modern technologies.

- Hand-held food, easy and simple way to eat food with a simple cover, it is also

considered a form of fast food. Most often used during sporting events around

stadiums.

- Instinct food, food and beverages that we select based on our instincts and bodily

needs. This trend derives from the belief that our bodies know best what they need

and will create cravings according to these needs. Based on aspects such as looks,

aromas and tastes people can either be attracted or repelled by certain foods.

- Junk food, a type of food with little or no nutritional value, often deep fried and

containing a high amount of calories. Some well-known examples are McDonald‟s,

KFC, Burger King. The majority of fast food also falls under the category of junk

food.

- Lego food and Puzzle food, most often sweets created by combining small and

precisely shaped pieces.

- LOHAS, stands for Lifestyles of Health and Sustainability. This trend has gained

massive popularity in recent years and revolves around consuming food made from

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locally produced ingredients. Sustainability is an important aspect which means

that the food is packed and distributed all in an ecological way.

- Molecular gastronomy, is a study aimed at ingredients and the transformation

(chemical and physical) they go through while cooking, often focusing on the

visual aspect of the meals.

- Novel food, a trend in which food is prepared in a way which has not been

previously used.

Slow food, a “movement” in which the aim is to enjoy and experience a true local

cuisine, the opposite of fast food.

- Sous-vide, a modern method of food preparation inside a vacuum to retain the taste

and juices of the ingredients. In addition to the taste being richer, compared to a

more regular method of preparing food, it stays fresh for an extended amount of

time. Not only does it fulfill all the hygienic requirements but it is also easier to

prepare. The disadvantage of this method of preparation is that it tends to be

considerably lengthier than the traditional way of cooking said meal.

- Street food, foods that are found in food carts or stands. In western countries

usually found at festivals and markets rather than actual streets, more common in

developing countries, street food is considered a type of fast food.

- Traditional regional gastronomy, food that reflects the traditions of a given

region regarding the methods of preparation and the ingredients used.

(Burešová et al. 2014)

Extremely wide array of trends are coming to life. These trends originate in technological

advancements as well as in longing for a reconnection with traditions. Many trends also

focus on the health and nutritional aspect while others concentrate on a cruelty free and

sustainable approach. (Burešová et al. 2014)

Restaurant classification

Services (forms of selling and serving)

- Services and gastronomy are two inseparable components of a food and beverage

establishment. One cannot function without the other. Most of the money brought

in goes through the hands of the servers/waiters and therefore their role is crucial.

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The service staff must fulfil the wants, needs, desires and expectations of the guest

from the moment they step into the restaurant to the moment they leave. Waiters

are also the salesmen and must be able to read the guest and figure out whether they

are in a hurry or have time to spare, as stated by Zimáková (2004). Each member of

the service staff should:

- Be reliable, accurate and loyal

- Be perceptive, predictive and be able to “read” the guest

- Have general oversight and capability of organizing and adapting to each situation

- Have personal discipline

- Be rigorous, calm and not show any change of mood

- Be friendly and able to take care of their guest

These points are crucial since the guest often comes into contact only with the service staff.

The image of the restaurant is directly correlated with the skills and behavior of its staff.

As mentioned before, the service staff is essential to the food and beverage business,

however there are different types of service classifications where the roles of the service

staff are slightly different. (Metz, Grunes & Kessler 2003, Zimáková 2004)

Self service

In a self-service establishment, the role of the service staff is reduced, this does not mean

that the productivity of the business itself is any lower. In a self-service operation, the

requirements are lower on the waiters, since the customer is in charge of not only choosing

but also serving their own food. Communication between the guest and the staff is mostly

limited to just paying. This type of service is most common in breakfast buffets or all you

can eat restaurants with a large variety of dishes.

Full service

The full service is very time demanding, requires great knowledge and skill of the staff.

The guest is taken care of from the moment they walk in the door until the moment they

leave as the staff is always standing nearby prepared to fulfill any needs that the guest

might have. This type of service is prevalent among high end establishments.

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Over the counter: food stands / food festivals

Over the counter is a form of quick selling with low requirements for the number of

working staff. Most commonly used in fast food chains such as McDonald‟s, KFC, Burger

King, etc., in schools/hospitals/workplaces canteens. This type of service is popular during

food festivals and other big social events such as markets and concerts where there is a

large amount of people that need to be served in a timely manner.

Other: vending machines

Vending machines do not require any waiting staff, just a regular replenishment. Snacks,

cold and warm beverages are sold. Often they are placed in locations with a high density of

potential buyers, such as schools, airports, hospitals and around stadiums.

Choice of the service type depends on the type of restaurant/operation and the type of

equipment available. (Zimáková 2004, Burešová et al. 2014, Petzuch, 1995, Burešová et al.

2014)

Types of restaurants

Restaurant type will depend mainly on what the target customer is as well as the location

of the establishment. Questions that help determining the target customer are:

- Are the surroundings of the restaurant residential or business-focused?

- Is the population density high or low?

- What are the most common professions and lifestyles?

- What is the most common age category?

- What is the most common mode of transportation?

- What is the average income of the locals?

- What are the future developmental plans for the location?

- Are there lunch/dinner rush hours?

All of these questions will give valuable information on how to decide what type of

restaurant the owner wants/should set up. In order to run a successful restaurant, the owner

must know both the exact primary and secondary target customer. The needs of the

customer should be identified and the product should be built around those needs. Failing

to acknowledge these aspects does not necessarily mean that the owner will have an

unsuccessful business but it will mean that the potential of the business will not be fully

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utilized. (Nienemeier 2001, Restaurant Engine, 2019)

Eating regimes

Today there are establishments focusing on various types of service/eating regimes which

gain new costumers thanks to their uniqueness. The establishments can specialize in

breakfasts, brunches, lunches, dinners and any other types of foods.

Breakfast/brunch/lunch and dinner

- Breakfast: It is the first meal of the day and it should contain all of the important

nutritional components for the body to function properly throughout the day. In the

past, breakfasts were divided by the national customs such as the English breakfast,

however now we can divide breakfasts into two main types, continental breakfast

and full breakfast. Continental breakfast usually consists of butter, marmalade or

honey with some bread and a warm beverage. Occasionally eggs, cheese and yogurt

are also part of the continental breakfast.

Full breakfast is more complex containing more meat such as sausages, bacon and

ham.

Breakfast can also be served as Table d‟hôte where the guest can choose from a

wide array of foods. The guests serve themselves and bring their food to their table.

The breakfast contains all kinds of fruits, vegetables, cheeses and overall fresh

ingredients which are periodically refilled by the chefs.

- Brunch: The word “Brunch” is the combination of the words “breakfast” and

“lunch”. Brunch is usually served in hotels from 11:00 to 15:00. Due to its

popularity there is an increasing amount of establishments that offer brunches on

the weekends. Brunches are favored by families with children, by people who like

to sleep late or by people who deliberately skip breakfast.

Brunch has lately also become popular not only for hotel guests but also for walk-

ins and for less formal business meetings.

- Lunch: is considered the most important meal of the day. Usually served between

11:30 and 14:30. Often containing a soup, a main dish and a beverage sometimes it

is complemented by a dessert or coffee. A popular beverage served with lunch in

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the Czech Republic is beer (both alcoholic and non-alcoholic) or lemonade, while

in Italy, France and Spain it is wine.

- Dinner: Served between 18:00-21:00. The dinner menu is similar to the lunch

menu. The difference is that the soup is substituted with a cold appetizer. Dinner

also often begins with an aperitif. A popular beverage to complement dinner is

either beer or wine. Lately it has become more common for dinner to contain more

than one course, this is also known as a degustation menu. (Burešová et al. 2014)

Types of menus

The menu is the image and selling point of the restaurant and it shows the customer what

the restaurant has to offer, what ingredients and methods will be used to prepare the meals

and what the skill level of the employees should be. If done correctly, the menu can be

used as a tool to “manipulate” the guest into ordering something that the restaurant wants,

perhaps the daily menu or the more expensive/popular items. The menu design also

stimulates revenue because when the menu is handed over to the guest, a transaction

begins. Types of menus can be divided into two main categories, the Table d‟hôt menu and

the À la carte menu. These two types of menu can be used in all kinds of establishments

regardless of what type of cuisine they are focused on. (Burešová et al. 2014, Nienemeier

2001)

Table d’hôte

The Table d‟hôte menu is classified by:

- Being a limited menu

- Offering a small amount of courses, most commonly three or four

- A limited amount of choices in each course

- A fixed selling price

- All the dishes being ready at the same time

The Table d‟hôte menu generally offers popular dishes and is easier to work with

compared to the á la carte menu due to the fact that it contains less items and the prices are

fixed. In many restaurants it is normal for the Table d‟hôte menu to be given to the

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customer together with an á la carte menu. The Table d‟hôte menu can be used for many

occasions such as breakfasts, lunches, dinners, and many more such as:

- Banquets: a banquet menu is fixed at a certain price and generally does not give

the guest any choice unless there has been a special request made in advance, for

example a vegetarian or kosher meal. (Burešová et al. 2014, Nienemeier 2001)

- Buffets: a buffet can be considered as Table d‟hôte because it offers a limited

choice of foods at a fixed price, all ready and available at a set time. Buffets are

often used for occasions where there is a large amount of guests that need to be

served at the same time such as weddings, conferences, receptions and press

conferences. (Burešová et al. 2014)

- Coffee houses: A coffee house menu is a rather modern way of presenting the

Table d‟hôte menu and is most commonly used in hotels and restaurants, it is

defined by being a set menu offered for up to eighteen hours a day. During rush

hours when the restaurant needs to serve as many people as possible, for example

during breakfast, it can be substituted by a menu with a smaller selection of items.

It can also offer a range of small foods, snacks and meals that are pre-cooked and

require little to no preparation time such as omelets and hamburgers. (Nienemeier

2001, Burešová et al. 2014)

- Cyclical menus: these are a collection of table d‟hôte menus, used for example for

three weeks which are repeated for a set amount of months. Most often used in

hospitals and industrial catering to facilitate the prediction of the number of meals

to prepare. (Nienemeier 2001, Burešová et al. 2014)

À la carte

Contrary to the Table d‟hôte menu the À la carte menu is often distinguished by being a

larger and a more complex menu, offering a wider selection of products. All of the

available to the guest are listed on the menu. Each dish is priced separately and is

commonly more expensive than a Table d‟hôte menu. Often more exotic and high cost

seasonal dishes are offered on an À la carte menu. (Nienemeier 2001)

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Daily/seasonal/child

A plat du jour, or also known as the specialty of the house/day is often a part of the a À la

carte menu. Depending on the establishment, these are two to three meals that are prepared

in anticipation and are cheaper than the other meals present on the menu. They are often

sold only during weekdays and during lunch hours, from 11:00 to 15:00, or until they are

sold out. Some establishments offer plat du jour even during weekends and during longer

time intervals.

Seasonal ingredients and dishes made from said ingredients can also be promoted on the

À la carte menu, for example asparagus, pumpkin and mushrooms. Not only seasonal

ingredients but also special occasions such as Easter, Christmas, St. Martin‟s can be

utilized. The amount of special occasions, seasons and ingredients that are promoted is

solely up to the owner of the establishment.

Part of the À la carte menu is also the children‟s menu section which, as the name states,

contains meals that are more appealing to children such as spaghetti with red sauce,

pancakes, chicken schnitzel with mashed potatoes, potato puree. The portions of these

meals are smaller simpler in ingredients and preparation. (Davis, Lockwood & Stone 1998,

Nienemeier 2001, Kochová, 2010)

Essential parts of the menu

The menu serves as a marketing tool and as a guide for the customer. The aesthetics of the

menu should correspond with the type of establishment it represents. Since almost all of

the profit of a restaurant comes in through the menu, it is essential to have the menu set up

correctly. Not having it set up properly can be a missed opportunity on making a better

name for the establishment itself and getting more renowned. The incorrect set up can also

negatively affect the popularity of certain dishes that would with a proper placement create

a higher revenue. The items on the menu are, to a certain extent, based on what the owner

feels should be on it, which allows flexibility and adjustments according to what the

demand is. However there are a few things to keep in mind that should be present on every

menu: (Bahattin and Osman, 2014)

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- Name and address of the establishment, contacts, reservations, opening/closing

hours

- List of items that are being offered, often accompanied by a brief description, main

ingredients, pictures

- Pricing of each item (including VAT)

- Weight of each item, information about the weight does not necessarily have to be

written there but the staff must know if they are asked about it

- The type of menu, from and until when it is valid

- Numbering of the items for easier communication between customer and waiter

- Types of payment available (cash/card/food stamps)

- Promotion of upcoming specialties/seasonal dishes

- Information about diet/child meals

- Invitation to other establishments of the same chain (if there are any)

- Wishing to enjoy their stay

- Any other useful/interesting information regarding the history of the establishment,

location, famous people that have visited the establishment, etc.

(Zimáková 2004)

Most common mistakes

Mistakes that may seem trivial could make a big difference and therefore should not be

underestimated. When it comes to writing the price of the items available on the menu, the

title should always be on the left and the price on the right as the majority of the world

population reads from left to right and not vice versa. The customer should always read

what is available to order first before reading the price. If the price is placed on the left, it

could give the wrong impression to the customer and it may lead them to the conclusion

that making a profit is more important to the establishment than focusing on the customer.

Another misconception in the restaurant business is that if the menu contains more items it

is more profitable, however this could not be any further from the truth. Having a lengthy

menu means that the restaurant must keep more kinds of ingredients in stock, this also

makes the decision-making process more complicated for the customer. Furthermore, this

means the restaurant needs a more knowledgeable chef so that the quality of all the dishes

is on the same level. This however does not mean that having one or two dishes on the

menu is the best choice due to the fact that this restricts the customer too much and they

14

will most probably not come back for more. Exception to this rule are specialized

restaurants, which offer multiple variations on a certain type of food, examples of these

restaurants in Prague are Miska ramen bar specializing in ramen, Café Palanda focusing

on burgers, Wings point serving, as the name suggests, primarily chicken wings, and many

others.

As technology evolves, the gastronomy sector must keep up with it. A research done by

statista.com shows us that “In 2018, 52.2 percent of all website traffic worldwide was

generated through mobile phones, up from 50.3 percent in the previous year. Mobile

currently accounts for half of all global web pages served”. This means that although it has

become standard for a restaurant to have its own website or at least a social media profile,

it is necessary for said website to be mobile friendly since mobile phone users are starting

to be more prevalent compared to PC users. (Statista, 2019)

As aforementioned above, the menu reflects the image of the restaurant, as a consequence

it must be kept in perfect condition at all times. Depending on the size of the business, the

menu can go through as many as a hundred hands throughout the day. This means it will be

inevitably falling on the ground and be stepped on, children will be fighting over it, drinks

will be spilled on it. The menu will essentially go through all the abuse that one can think

of and therefore it must be taken care of. In order to protect the menu, it can be laminated

in plastic, have a wooden or metallic design, the possibilities of a protective design are

almost endless as long as it stays clean. If dirty, it can misrepresent the establishment and

give the customer the impression that the restaurant itself is dirty and cheap.

Frequent pricing changes also come to mind when speaking of common mistakes within

the menu. An analysis of the prices should be done frequently, at least twice a year, due to

the prices of ingredients changing all the time. Inflation itself could make a significant

difference in the income margin. If this update of the menu is not done regularly, then the

business could be losing considerable amounts of money.

The menu items should also be subject to updates twice a year. After going through a

thorough analysis, the business should be able to remove the least profitable and the least

popular items and freshen up the menu with some new ideas instead.

Keeping up with trends is another important aspect of running a successful restaurant.

Dishes that were popular ten, twenty, fifty years ago should not be on the menu. Some of

these items might have an added value to them, but they should not be prevailing. With the

world of gastronomy being explored into more depths, there are endless opportunities and

15

chances to bring something new to the table. The customers will appreciate the fact that the

restaurant is trying to be creative and open to new ideas.

Another concept that many businesses miss out on are limited time offers. These limited

time offers can be based on seasonality, availability of ingredients and local traditions such

as Easter, Saint Martin and Christmas. Customers feel a certain pressure to order from

these menus because they are aware of fact that they are available only for a limited

amount of time.

Knowledge and training of the staff is a critical aspect of running a profitable restaurant.

An inexperienced waiter or waitress can ruin the whole experience for the customer and

certain mistakes may even be life threatening. The staff must always know how every meal

tastes, what the main ingredients are and how it is prepared. Often a customer will ask for a

recommendation from the waiter. In this case if the waiter does not know all the

ingredients of the suggested dish they might endanger the customer by suggesting a dish

that contains an ingredient that the customer is allergic to.

(Davis, Lockwood & Stone 1998, Nienemeier 2001, Burešová et al. 2014)

Menu engineering analysis:

Every single establishment applies some sort of menu engineering on their offer in order to

establish the items that make profit versus the ones that cause loss. Menu engineering

analysis has become an integral part of every successful establishment. The analysis is

done on every single item on the menu to see whether or not said item is worth investing

in, should be improved and promoted or whether it should be removed altogether. This

analysis should be done on every item at least twice a year along with the regular revision

of the menu. This analysis will yield two kinds of results. The most/least popular items and

the most/least profitable items. A popular item is such that is ordered frequently by

customers but not necessarily creating positive revenue. A profitable item on the other

hand is such that generates a high contribution margin while not always being popular.

(Bahattin and Osman, 2014, Luptáková, 2018)

16

Terms

As Nienemier (2001) states, in order to successfully complete the analysis of a menu, it is

necessary to obtain the amount of times each item has been sold during a specific time

period, the production cost and the selling price. It is also important to calculate the

following data:

- Menu mix: The menu mix is the percentage of units sold represented by each item

on the menu.

- Item food cost: The item‟s food cost is the cost of all the ingredients necessary to

create one portion. This information is obtained from the restaurant

owner/manager.

- Item selling price: The price at which an item is sold to the guest. This information

is taken directly from the menu of the restaurant.

- Item contribution margin: Calculated by subtracting the item‟s food cost from the

item‟s selling price.

- Menu costs: are calculated by multiplying the number of individual items by their

food cost.

- Menu revenues: are calculated by multiplying the number of individual items sold

by their selling price.

- Menu contribution margin: is calculated by subtracting the menu costs from the

menu revenues.

Profitability

For a manager to be able to define profitability, they will need two figures to do the

calculations. The food cost of an item and its selling price. Simply subtract the food cost

from the selling price and the difference is the contribution margin. This easy calculation

should be done with all the items on a menu. For an item to be considered profitable, it

must have an equal or higher contribution margin than the average of all the menu items.

To calculate the average, simply subtract the food cost from the selling price of all items

and divide it by the number of items on the menu. Once this is done, it is easy to see which

items are profitable and which ones are not and should either be removed or adjusted.

(Nienemeier 2001)

17

Popularity

Defining popularity, as written by Nienemier (2001), is based on the popularity index. For

the purpose of analysis, all of the items on a menu are expected to be equally popular. To

give an example, if there are four items on a menu, all of the four items are expected to sell

the same amount of times, so 25%. If there are 10 items on a menu, each item would

represent 10%. According to Nienemier, in Menu engineering an item is popular if its unit

sales are 70% of what is expected. This means that on a four item menu, an item would be

popular if its unit sales represented 17.5% of all unit sales (100% † 4 = 25% x 70% =

17.5%). However on a ten item menu, an item would be popular if its unit sales

represented 7% of all unit sales (100% † 10 = 10% x 70% = 7%). This is a way how

managers can use menu engineering to determine which items are popular and which items

are not and consequently distribute them into the four quadrants of the BCG Matrix

(plowhorses, puzzles, dogs or stars). It is an extremely useful tool to help improve the

menu. (Nienemeier 2001)

Managing the results of the BCG Matrix

Once the analysis of the menu is complete and the results regarding the popularity and

profitability are calculated, the BCG Matrix analysis can be done. According to the BCG

Matrix all the items on a menu are divided into four categories. These categories are:

Plowhorses: items which have a low contribution margin but are high in popularity. They

are popular amongst guests but unfortunately they do not add much in regards of the

contribution margin. There are many strategies on how to approach a plowhorse item, such

as:

- A careful increase in prices. The item may be popular because it represents a great

value for money or because it cannot be obtained anywhere else. A careful price

increase could generate a higher contribution margin and it could still remain a

good value for money, therefore should continue to be popular.

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- Testing for demand. If there is no resistance to the increase of the price, it could be

a good idea to reposition the item on the menu, placing it in a different category or

closer to the top of the list, making it seem like a better choice.

- Putting focus on more desirable items. Make servers recommend stars instead of

plowhorses. Promote the star and puzzle items using table tents.

- Combination with lower cost production items. If lower cost meal accompaniments

are offered together with the plowhorse, such as higher priced vegetables and

desserts, the contribution margin could be increased without lowering the item‟s

popularity.

- Reducing portion size. If the size of the portion is reduced, the product cost will

decrease and this will lead to the increase of the contribution margin. This should,

however, be done carefully as the guest may feel that the value is decreased with

the reduction of the portion size.

Puzzles are items that are not very popular but have a high contribution margin. The

general idea is to increase the popularity of the puzzle, which would consequently lead to

the item becoming a star.

- Increasing demand can be done by renaming the items, moving them to a more

visible spot on the menu, focus advertisement on these items, place them on table

tents, make servers recommend them more, advertise them on the entrance of the

restaurant. All of the above are strategies to make the puzzles more visible and

more desirable.

- Decreasing the price slightly and still maintaining its contribution margin above the

average could increase the item‟s popularity as the guests will see the value for

their money increase.

19

- Improve the item by preparing the meal with better/more expensive ingredients or

adding more expensive meal accompaniments could be a way of increasing the

value. This could help increase the item popularity.

Stars are the items every manager wants to have. They represent a high contribution

margin and are popular. Recommendations to the managers regarding stars are:

- Maintaining a high standard. Do not try to increase the item cost just to increase the

contribution margin. Leave the item as is, unchanged to maintain its high demand.

- Must be placed in a well visible spot on the menu. Stars are items that every

manager wants to sell and therefore should always be promoted to the guest.

Dogs are items that are both unpopular and are low in the contribution margin. They are

items that can be revised but more often than not should be removed from the menu as they

do not help the restaurant revenue. (Nienemeier 2001)

Analytical part

In this chapter the menu engineering analysis and the BCG Matrix is done using the data

provide by the restaurant owner/manager. Consequently, the results are reviewed,

described and are given suggestions on how to improve the product portfolio of the

establishment.

Materials and Methods of Research

20

As the title of this Bachelor‟s thesis suggests, this part of the thesis will be dedicated to the

menu engineering analysis of the product portfolio of a Vietnamese restaurant in the

southern part of Moravia, in the Czech Republic. Since the analysis is done using sensitive

data which could be exploited to damage the establishment in any way and therefore it will

not be named nor will the exact location be stated throughout the entirety of this thesis.

The analysis will be done using the data from the date collected from 1.1.2018 to

31.12.2018.

To successfully complete the aim of this thesis, primary data is used which has been

provided by the manager/owner of the establishment. After using the Menu Engineering

analysis and the BCG Matrix, all of the thirty five food items are then categorized into the

four quadrants.

Target

The target of this thesis is to demonstrate how the use of the menu engineering analysis in

gastronomy can serve as a fundamental way to improve the product portfolio of an

establishment by increasing popularity and profitability with different approaches to each

product depending on its current popularity percentage and contribution margin and where

it is placed in the BCG Matrix.

Processing and evaluating data

To achieve the results to successfully complete the menu engineering, I will calculate the

popularity and profitability of each item and consequently compare it with all the other

items on the menu. After using the BCG Matrix and separating all of the items into one of

the four quadrants I will be able to understand which items should be improved, remain

unaltered or removed altogether from the menu. An example of a table where the

popularity and profitability has been calculated and all the items put into one of the four

categories to show how the rest of the analysis will be done:

21

Table 1:Example

Source: own elaboration

Separating the items into one of the four categories in (in the table above there are three)

depends on the item popularity (must be higher than 70% of the unit sales) and item

profitability (must have the same or higher than average contribution margin of all the

items on the menu).

Once the menu engineering table is complete, it is also possible to demonstrate the results

in a matrix graph.

Introduction to the restaurant

The analysis is done on a Vietnamese restaurant located in the south of Moravia, in the

Czech Republic. Opened in 2011, it is a family owned business focusing on satisfying the

customer at the highest level.

It offers a wide range of Asian meals but focuses mainly on Vietnamese food made from

fresh vegetables and spices. An open-kitchen space allows the guests to witness the

preparation of each meal, which according to the owner/manager increases the chances of a

guest coming back in the future. Large groups of people and families with children are

welcome as the restaurant has one hundred seats. However, the restaurant also offers a

romantic experience for couples in an Asian-style garden.

Southern Moravia was the choice due to the fact that most of the Vietnamese restaurants in

the Czech Republic are located near or in Prague, said the owner. Making the Vietnamese

cuisine accessible to people outside of Prague is a priority for the owner, as the family is

planning to open a fourth restaurant in the near future.

What the restaurant offers

Customers of the restaurant have a wide range of meals to choose from and are available

22

all year long. These categories are:

- Soups (5 items)

- Salads (4 items)

- Appetizers (4 items)

- Beef (3 items)

- Pork (4 items)

- Chicken (3 items)

- Duck (3 items)

- Noodles (3 items)

- Sushi (5 items)

Figure 1: percentage of unit sales


During the analyzed period, from 1.1.2018 to 31.12.2018, the restaurant has sold 94,711

meals. The total food cost of the menu was CZK 13,674,531.50. Total menu revenue

without subtracting the food costs was CZK 54,619,306. With the food cost subtracted, the

menu contribution margin was CZK 40,944,744.50.

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Figure 2: Comparison between the menu cost and the menu contribution margin


Graph 2 shows that the total menu cost is 25.03% of the total menu revenue, meanwhile

the Menu contribution margin is the remaining 74.96% of the total menu revenue. The total

menu cost is made up of the cost of ingredients used to create each meal. The analysis does

not take into consideration certain costs such as energy, workforce and rent.

Application of Menu Engineering

In the following chapter, the menu engineering analysis is done by analyzing all the data of

the food menu from the Vietnamese restaurant in the time period of the one calendar year

from 1.1.2018 to 31.12.2018. All of the data is calculated and reviewed in tables which can

be found in the list of figures. In the analysis only the key tables/graphs will be shown for

the results to be clear.

During the time period of twelve months, as mentioned before, the restaurant offers thirty

four items (meals) which are separated into nine categories, depending on the type of food.

To be able to understand which items were profitable for the restaurant, it was important to

calculate the contribution margin of each item, which is different depending on which of

the 9 categories is being analyzed. As mentioned before, calculations of the profitability of

each item are based on the average contribution of all of the items in the specific category,

24

while the popularity is based on the popularity index which assumes that an item is popular

when total unit sales are equal to or above 70%.

BCG Matrix:

The BCG Matrix is based on the menu engineering process of data analysis. An example of

what the BCG Matrixes will look like in this thesis:

Figure 3: BCG Matrix eample


The items of the menu are all separated into one of the four quadrants, based on whether or

not they are popular/profitable. Popularity is based on the percentage of units sold, while

profitability is based on the average contribution margin. Items with a high popularity and

high profitability are in the top right Stars quadrant. Items with a high popularity but low

contribution margin are in the top left Plowhorses quadrant. Items with a low popularity

but high contribution margin are in the bottom right Puzzles quadrant and items with a

contribution margin and low popularity are in the bottom left Dogs quadrant.

Analysis of the entire menu

The following graph demonstrates what a BCG Matrix looks like if it were performed on

all of the thirty four items of the restaurant menu, ignoring the food categories.

25

Figure 4: BCG Matrix of all items


The point of popularity would be at 2.05% and the average contribution margin would be

CZK 111.91.

Naming all the items in the graph would be too confusing, therefore the name and

description of each item is written separately.

1- Duck soup with CZK 34.50 of contribution margin and 3.50% of popularity

making it a plowhorse

2- Miso soup with CZK 51 of contribution margin and 1.71% of popularity making it

a dog

3- Asparagus soup with CZK 45 of contribution margin and 1.69% of popularity

making it a dog

4- Tom Yum soup with CZK 42 of contribution margin and 2.03% of popularity

making it a dog

5- Salmon and tamarind soup with CZK 43 of contribution margin and 1.55% of

popularity making it a dog

6- Mango salad with CZK 61 of contribution margin and 0.58% of popularity making

it a dog

26

7- Tuna salad with CZK 77 of contribution margin and 0.43% of popularity making it

a dog

8- Shrimp and avocado salad with CZK 54 of contribution margin and 0.30% of

popularity making it a dog

9- Mix vegetables salad with CZK 42 of contribution margin and 0.22% of popularity

making it a dog

10- Summer roll (fried) with CZK 52 of contribution margin and 3.03% of popularity


11- Spring roll (unfried) with CZK 35 of contribution margin and 2.92% of popularity


12- Grilled salmon with CZK 94 of contribution margin and 1.97% of popularity

making it a dog

13- Grilled shrimp with CZK 96 of contribution margin and 1.39% of popularity

making it a dog

14- Beef Kung Pao with CZK 127 of contribution margin and 0.63% of popularity

making it a puzzle

15- Pepper steak with CZK 129 of contribution margin and 0.47 of popularity making it

a puzzle

16- Beef with bamboo sprouts and hoisin sauce with CZK 121 of contribution margin

and 0.44% of popularity making it a puzzle

17- Caramelized pork with CZK 118 of contribution margin and 1.0% of popularity

making it a puzzle

18- Pork Kung Pao with CZK 120 of contribution margin and 0.92% of popularity

making it a puzzle

19- Pork steak with champignons and soy sauce with CZK 120 and 0.90% of popularity

making it a puzzle

20- Sweet and pork with CZK 118 of contribution margin and 0.91% of popularity

making it a puzzle

21- Spicy chicken with CZK 124 of contribution margin and 3.50% of popularity

making it a star

22- Grilled breasts with peanut sauce with CZK 117 of contribution margin and 3.32%

of popularity making it a star

27

23- Roasted chicken with CZK 119 of contribution margin and 3.29% of popularity

making it a star

24- Grilled duck on hoisin sauce with CZK 164 of contribution margin and 2.99% of

popularity making it a star

25- Grilled duck on sweet and sour sauce with CZK 171 of contribution margin and

3.24% of popularity making it a star

26- Grilled duck on oyster sauce with CZK 169 of contribution margin and 2.96% of


27- Bun Bo nam Bo with CZK 144 of contribution margin and 4.54% of popularity

making it a star

28- Grilled beef (Bun Cha)(noodles) with CZK 119 of contribution margin and 4.87%

of popularity making it a star

29- Bun Nem rolls (noodles) with CZK 117 of contribution margin and 4.21% of


30- Sushi menu 16 pcs with CZK 409 of contribution margin and 0.84% of popularity

making it a puzzle

31- Maki with CZK 74 of contribution margin and 5.82% of popularity making it a

plowhorse

32- Nigiri with CZK 79 of contribution margin and 1.18% of popularity making it a

dog

33- Sashimi with CZK 184 of contribution margin and 0.14% of popularity making it a

puzzle

34- Special rolls with CZK 139 of contribution margin and popularity of 2.47% making

it a star

After processing the results of the menu engineering analysis and the BCG Matrix of the

entire menu as a whole, the results are eleven dogs, nine puzzles, four plowhorses and ten

stars.

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Menu engineering: Appetizers

The appetizers menu is composed of four items. The amount of items sold was 12,599

which during the year 2018 has brought in CZK 4,812,818 in revenue. CZK 1,322,895.00

was the total cost of production and the final contribution margin was CZK 3,489,923.0.

Total production cost was 27.5% of the revenue. Based on calculations, an item in the

appetizers menu is considered popular if its popularity is equal to or higher than 17.50%.

The average contribution margin is CZK 69.30. Anything above this figure is considered

profitable.

Table 2: Appetizers table


Figure 5: Appetizers BCG Matrix


In the figure above, it is clear that the Grilled shrimp is the most profitable with a

contribution margin of CZK 96 and in second place is the Grilled salmon with a

contribution margin of CZK 94. In terms of popularity, with 22.77% Summer roll (fried) is

the highest. Spring roll (unfried) has a popularity of 21.94%. Both of the rolls are

29

categorized as plowhorses while the Grilled salmon and shrimp both fall into the category

of puzzles.

Menu engineering: Soups

The menu category of soups contains five items which have been sold 14,169 times during

the year 2018 and have brought in a total of CZK 4,038,165, out of which 24.4% (CZK

984,745.50) is the production cost. The contribution margin is CZK 3,053,419.5.

Table 3: Soups table


Figure 6: Soups BCG Matrix


For an item to be considered popular, based on calculations it must have the popularity

equal to or higher than 14.00%. Regarding the profitability, the average contribution

30

margin in this menu is CZK 43.10.

As shown in the BCG Matrix, the most profitable item on the soup menu is the Miso soup

with a contribution margin of CZK 51, however the popularity of said item is only 11.45%

and is therefore considered as unpopular and consequently placed into the puzzle category.

Highest popularity of the soup menu is seen in the Duck soup with 23.39%, passing the

line of popularity by 9.39%. It falls into the category of plowhorses due to the fact that it

is considered unprofitable as it has an item contribution of CZK 34.50, CZK 8.60 less than

the average CM. The second item in the plowhorses category is Asparagus soup with a

contribution margin of CZK 45 and a popularity of 11.28%. Regarding the dogs quadrant,

it is made up of the two remaining items, Tom Yum soup with a contribution margin of

CZK 42 and popularity of 13.55% and Salmon and tamarind soup which misses out on

being in the plowhorse quadrant by only CZK 0.10 and with the popularity at 10.33%.

Menu engineering: Salads

The salad category offers four salads and has brought in CZK 658,860 in revenue, selling

2085 items during the analyzed period. Total food cost resulted in CZK 170,970.00

meaning that the menu contribution margin is CZK 487,890.0, or 74.05% of the total

revenue.

Table 4: Salads table

Source: own elaboration 1

31

Figure 7: Salads BCG Matrix


Average contribution margin of the salad category is CZK 58.50, and the line of popularity

is at 17.50% meaning that both Mango salad and the Tuna salad are in the stars quadrant.

Contribution margin of Mango salad is CZK 61 and popularity is 26.56% while the

contribution margin of the Tuna salad is CZK 77, much higher than the Mango salad,

however the popularity of the Tuna salad is lower at 19.47%. Dogs quadrant is where the

remaining two salads are placed, with Mixed vegetable having a contribution margin of

CZK 42 and popularity of 10.14% while the Shrimp & avocado salad has a slightly higher

contribution margin of CZK 54, and a slightly higher popularity of 13.83%.

Menu engineering: Noodles

The restaurant has sold 18,445 items from on the Noodles menu during the year 2018,

which accounts for 19.47% of all items sold from all the menus, making it the highest

selling menu and second highest in terms of contribution margin of the restaurant, with

revenue of CZK 9,167,165, total production costs of CZK 2,158,065.0 and menu

contribution margin of CZK 7,009,100.

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Table 5: Noodles table


Figure 8: Noodles BCG Matrix


The noodles menu consists of three items, the average contribution margin of the three

items is CZK 126.70 and the point of popularity is at 23.33%. In the stars quadrant there is

Bun Bo Nam Bo with a contribution margin of CZK 144 and popularity of 23.34%, were

23.32% would be considered unpopular and be categorized as a puzzle. Occupying the

plowhorse quadrant is Grilled beef with a contribution margin of CZK 119 and popularity

of 25.03%. Lastly, Bun Nem rolls are in the dogs quadrant, with a contribution margin of

CZK 117 and popularity of 21.64%.

33

Menu engineering: Chicken

The chicken menu is made up of three items and its revenue during the year 2018 was

CZK 6,938,802, food cost was CZK 2,011,842.00 and contribution margin was CZK

4,926,960.0, all of which was from 13,686 sales. The average contribution margin of the

three items is CZK 120 and point of popularity is 23.33%.

Table 6: Chicken


Figure 9: Chicken BCG Matrix


Spicy chicken on garlic is in the stars quadrant with a popularity of 24.20% and a

contribution margin of CZK 124. The other two remaining items of the chicken menu are

both in the dogs category, with Grilled breast with peanut butter sauce just missing out on

being in the plowhorse quadrant by 0.33% and with a contribution margin of CZK 117.

The Roasted chicken also is not far from being a plowhorse with 22.80% popularity and

34

CZK 119 of contribution margin.

Menu engineering: Pork

Four items make up the pork category, which in the year 2018 has sold 5,065 portions,

bringing in a revenue of CZK 3,434,070, of which food cost was CZK 1,023,130.00, thus

resulting in a contribution margin of CZK 2,410,940.0. The average contribution margin is

CZK 119 and the point of popularity is 17.50%.

Table 7: Pork table


Figure 10: Pork BCG Matrix


Out of the four items in the pork menu, none are in the stars quadrant, instead two are in

the puzzles quadrant, however, Pork Kung Pao is almost in the stars quadrant having

missed out only by 0.21% of popularity. Its contribution margin is CZK 120 just as the

Pork steak with champignon & soy sauce, which however ranks lower in terms of

popularity with 16.92%. In the plowhorse quadrant is Caramelized pork with its popularity

at 19.69% and a contribution margin of CZK 118. Sweet and sour pork is the only item in

35

the dogs quadrant with a contribution margin of CZK 118 and popularity of 17.11%.

Menu engineering: Beef

The beef menu is made up of three items and the total sales amount to 2,095 during the

analyzed period, in which the revenue was CZK 1,125,015, food cost was CZK

335,200.00, meaning that the contribution margin was CZK 789,815.0. The average

contribution margin was CZK 125.70 and the point of popularity was calculated to be

23.33%.

Table 8: Beef table


Figure 11: Beef BCG Matrix


The Beef Kung Pao is in the stars quadrant with a contribution margin of CZK 127.0, CZK

1.30 more than the average. In terms of popularity it is at 28.63%. The puzzles quadrant is

occupied by the Pepper steak with a popularity of 21.28%, had it been only 2.05% more it

36

could have been in the stars quadrant. Regarding the contribution margin, it is CZK 129,

CZK 2 more than the Beef Kung Pao. The last item on the menu, the Beef with bamboo

sprouts and hoisin is in the dogs quadrant with a contribution margin of only CZK 121 and

a popularity of 20.08%.

Menu engineering: Duck

The duck menu is composed of three items which have brought in a revenue of CZK

8,538,036, in which 26.64%, or CZK 2,274,324.00 was the food cost. The final

contribution margin of the menu was CZK 6,263,712.0, or 73.36% of the revenue.

Table 9: Duck table


Figure 12: Duck BCG Matrix


37

Menu engineering: Sushi

The sushi menu was the most profitable and the third highest selling item out of the nine

menu categories during the year 2018, with its five items having sold 14,139 units, just 40

units less than the soups menu, and bringing in revenue of CZK 15,906,375, out of which

food cost was only CZK 3,393,360.00, therefore the menu contribution margin was CZK

12,513,015.0.

The point of popularity of the sushi menu was 14.0%, the average contribution margin was

CZK 177. It was this high due to the fact that that the 16 piece Sushi set has a selling price

of CZK 409.

Table 10: Sushi table


38

Figure 13: Sushi BCG Matrix


The 16 piece Sushi set item is the most profitable because, as mentioned previously, it has

a selling price of CZK 519, a production cost of CZK 110, and therefore its contribution

margin is CZK 409, however in terms of popularity it is the second least popular with

5.59%, most probably due to the high selling price.

The least popular item on the sushi menu is Sashimi with only 0.94%, however it has the

second highest contribution margin of CZK 184, putting it into the puzzle quadrant.

Moving on to the plowhorse, there are two items. Special rolls with a popularity of 16.58%

and contribution margin of CZK 139. The other item in the plowhorse quadrant is Maki,

with the highest popularity of the entire sushi menu, of 39.01% and an item contribution

margin of CZK 74. The final item, placed in the dogs quadrant is Nigiri with a popularity

of 7.98% and the second lowest contribution margin, only after Maki, of CZK 79.

Suggestions

This chapter contains suggestions based on the menu engineering analysis and BCG Matrix

performed on the selected restaurant. Among these recommendations are ways to improve

the products that are on offer by changing prices, promoting or removing them from the

menu altogether. The main aim of this chapter is to increase the contribution margin and/or

39

the popularity of the items, depending on which of the four quadrants of the BCG Matrix

they fall under.

Appetizers

The Appetizers menu contains four items, Spring roll and Summer roll in the plowhorses

quadrant and Grilled salmon and Grilled shrimp in the puzzles quadrant. In this case, it

would be difficult to increase the price with the aim of reaching an equal to or higher than

average contribution margin, which is CZK 69.3, The Grilled shrimp has a contribution

margin of CZK 94, the Grilled salmon has a contribution margin of CZK 96 therefore the

contribution margin of both items is high compared to the Spring roll and the Summer roll.

Suggestion A) Instead of raising the selling price of the two rolls, they could be offered as

one item with a selling price of CZK 129, the same selling price of the other two items on

the menu and would facilitate the choice of the customers. This would result in an increase

of revenue over the period of one year by CZK 62,995.0, bringing the revenue up to CZK

4,875,813 from the previous CZK 4,812,818.

Suggestion B) Shifting the demand to the Grilled shrimp and Grilled salmon. By moving

them to a more visible area of the menu, promoting or making the waiters recommend the

two items which are in the puzzle quadrant, the popularity could grow and overtime would

crawl into the stars quadrant.

Suggestion C) Consider a price decrease of the Grilled salmon and Grilled shrimp. A price

decrease could give the customer the perception of the item representing greater value,

while still maintaining a higher than average contribution margin. This could lead to an

increase of popularity.

Soups

The soups menu has five items in total. One is in the plowhorses quadrant, two in puzzles

and two in dogs. The two dog items are the Tom Yum soup and the Salmon & tamarind

soup. The Tom Yum soup is very close to being a star, while the Salmon & tamarind is

very close to falling into the puzzles quadrant. The Tom Yum soup misses out by only

40

CZK 1.10 from being profitable and 0.45% from being popular, while the Salmon &

tamarind soup is just CZK 0.10 from being a puzzle, but far from being a star in terms of

popularity.

Suggestion: By increasing the price of both the Tom Yum soup and the Salmon &

tamarind soup, their contribution margin would be CZK 52, and CZK 53 respectively,

while the average contribution margin would be CZK 47.10. Therefore the two soups

would both shift to the puzzles quadrant. To help the Tom Yum soup move to the stars

quadrant, promoting the soup on social media, moving it into a more visible area would

help with increasing its popularity and consequently turning the soup into a star. The price

change of CZK 10 of both of the soups would lead to a revenue rise from CZK 4,038,165

to CZK 4,321,545. A difference of CZK 283,380.0.

Salads

The salad menu is made up of four items, two in the stars quadrant and two in the dogs

quadrant. The Mixed vegetable salad is immensely unprofitable in addition to being

unpopular. The Shrimp & avocado salad is also unprofitable and unpopular but has the

potential to be improved.

Suggestion A) Removing the Mixed vegetable salad from the menu completely. Out of all

the salad orders during the analyzed year, it has only been ordered 302 times, meaning

14% out of the total 2,085. Replacing it with a new salad is important as eating healthy has

become a trend.

Suggestion B) Pushing demand for the Shrimp & avocado salad as it is only 3.67% from

being in the plowhorse quadrant. If the popularity starts to rise, then a slow increase in

pricing could be considered as the contribution margin is only CZK 4.50 from being

profitable.

Noodles

The noodle category contains three items, occupying the dogs, plowhorses and stars

41

quadrants. The Bun Nem rolls in the dog quadrant are only 1.69% from being in the

plowhorse quadrant, while the Grilled beef Bun Cha noodles is in the plowhorse quadrant

with the highest popularity of the three items.

Suggestion A) The Bun Nem rolls represent 31%, or 5,701 out of 18,445 units sold

throughout the year 2018, even though it is in the dog quadrant and so it would not be

sensible to remove it from the menu. Instead it would be logical to promote or improve it

in some way that would help increase its popularity and consequently move it into the

plowhorse quadrant. With the right adjustments it has potential to become more popular

and profitable.

Suggestion B) The Bun Cha noodles are the highest selling item on the noodles menu with

6,565 units sold, or 36% of 18,445, meaning it is the most popular. Increasing the selling

price by CZK 20 would match it to the selling price of the star item which are the Bun Bo

Nam Bo noodles, and would consequently make it a star as its contribution margin would

change from CZK 129 to CZK 139 and changing the average contribution margin from

CZK 130 to CZK 130.30. The selling price increase of CZK 20 means that the total yearly

revenue would increase by CZK 368,900.0.

Chicken

The chicken menu is made up of three items. The dogs quadrant has Grilled breast with

peanut sauce and Roasted chicken. Both of the dogs items score highly in terms of

popularity, with the Grilled breast at 23% and Roasted chicken at 22.80%, both barely

missing out on being in the plowhorse quadrant, which in the case of three items requires a

popularity of 23.33%.

Suggestion A) In this case, keeping both dog items is imperative, as the Grilled breast has

33% of all units sold, while the Roasted chicken has 32%. An increase of popularity of

both items by recommendations from the staff or having special promotions around the

entrance of the restaurant could shift the two items into the plowhorse category.

Suggestion B) An increase in selling price of the Roasted chicken by CZK 10 would

increase the average contribution margin from CZK 120 to CZK 123.3 and the item

contribution margin from CZK 119 to CZK 129 consequently placing it into the puzzles

42

quadrant. The increase of selling price by CZK 10 would also increase the yearly revenue

by CZK 136,860.0.

Beef

The beef menu contains three items placed in the dogs, puzzles and stars quadrants. Beef

Kung Pao is the most popular item with 28.63% of popularity, however is the second in

terms of profitability with a contribution margin of CZK 127, only item which has a higher

contribution margin is the Pepper steak with CZK 129, but a lower popularity of 21.68%,

placing it into the puzzle quadrant. The only remaining item is the Beef with bamboo

sprouts and hoisin sauce, placed in the dogs quadrant due to a low contribution margin of

CZK 121, compared to the others of CZK 127 and CZK 129.

Suggestion A) Using suggestive selling techniques to shift demand on the Beef with

bamboo sprouts and the Pepper steak with the aim of increasing their popularity. An

increase in popularity by 2.05% of the Pepper steak would move it to the stars quadrant,

while an increase of 3.25% would shift the Beef with bamboo sprouts into the plowhorses

quadrant.

Suggestion B) Testing for selling price inelasticity of the Beef Kung Pao to see whether or

not the item is popular due to the fact that it is not available or as good in other competing

establishments or whether it represents a good value to the customer. Based on the results,

the price should either stay the same or be increased.

Duck

The duck menu consists of three items placed in the stars, puzzles and dogs quadrants. The

Grilled duck on oyster sauce, located in the puzzles quadrant, misses out on being a star

due to its popularity. An increase in popularity by only 0.77% would shift it into the star

quadrant, while an increase of 0.56% regarding the popularity would shift the Grilled duck

on hoisin to the plowhorses quadrant.

43

Suggestion A) A price decrease of the Grilled duck on hoisin would likely increase its

popularity and move it to the plowhorse quadrant, giving it potential for the future to

update or modify it and consequently increase the selling price.

Suggestion B) Offering a slightly larger portion is one way to increase the value of an item

and could be done with the Grilled duck on oyster sauce. If its popularity is increased by

anything more than 0.77% then it would move to the stars quadrant.

Sushi

The sushi menu contains five items. Two in the puzzles quadrant, two in the plowhorses

quadrant and one in the dogs quadrant. It also contains the most sold item of the entire

restaurant menu, Maki with 7,879 units sold, and the least sold item, Sashimi with only

189 units sold and the item with the highest contribution margin of CZK 409, the 16 piece

Sushi set.

Suggestion A) Removing Sashimi. It sold on average 15.57 times each month, in total 189

over the year 2018 and it only added CZK 43,281 of revenue to the establishment. Its

popularity is 0.94%. Introducing a new item instead would freshen up the menu and give

the customers a larger variety of items to choose from.

Suggestion B) A selling price decrease of the 16 piece Sushi set item. It is the second least

popular item of the sushi menu with 5.59%, making it unpopular, but has the third highest

revenue of the sushi menu. A selling price decrease of CZK 100 would lower its

contribution margin to CZK 309 but would still stay in the puzzles quadrant as the average

contribution margin would go from CZK 177 to CZK 157. This could increase the item‟s

popularity and in the future could move into the stars quadrant.

Suggestion C) Selling price increase of Maki by CZK 30. It is the most popular item of the

sushi menu and the best selling item of the entire establishment with 7,879 units sold. Its

popularity is 39.01%, passing the point of popularity (14%) by 25.01%. The selling price

increase of CZK 30 would increase the yearly revenue of the item by CZK 236,370.0. It

would however still remain in the plowhorse quadrant due to the high average contribution

margin caused by the 16 piece Sushi set.

44

Conclusion

The title of the thesis is “Menu engineering and its use in gastronomy”. The menu is an

inseparable part of any dining establishment and is one of the key elements of running a

successful business.

The first part of the thesis is theoretical, discussing the roots of gastronomy, trends and the

menu, explaining the function and what it should and should not contain and the menu

engineering process with the Boston Consulting Group Matrix. The second part of the

thesis, the analytical part, is dedicated to the analysis of the product portfolio a selected

restaurant in the Czech Republic. Using the menu engineering method and consequently

the Boston Consulting Group Matrix, all the items were separated into one of the four

quadrants and described. To successfully perform the analysis, primary data was used,

consisting of all the item names, units sold, production costs and selling price. The data

used to analyze was collected during the entire year of 2018. Due to large amounts of data

provided, only the food items were selected for the analysis. All the data used in this thesis

has been provided by the owner/manager of the selected restaurant, under the condition the

restaurant remains anonymous and therefore throughout the entirety of this thesis there are

no mentions of the name or exact location of the restaurant. The third and final part of the

thesis is dedicated to suggestions based on the analysis, the items and in which of the four

BCG Matrix quadrants they are in. The suggestions are on the basis of whether or not the

item is popular/unpopular or profitable/unprofitable.

Based on the analysis and by calculating the point of popularity and the average

contribution margin of each item I was able to understand which items were profitable and

popular. Depending on which of the four quadrants the items were allocated to, I came up

with suggestions and conclusions on how to improve the items. Among the suggestions

were removing, promoting, pushing for demand, increasing or decreasing the selling price

and combining two separate items into one.

If the suggestions that came from the analysis were successful, it would be necessary to

repeat the same process the following year.

45

List of references

Books:

Bahattin, O. and Osman, C. (2014). A review of literature on restaurant menus: Specifying

the managerial issues. International Journal of Gastronomy and Food Science.

BÉ HÀ NGUYEN, Vietnamská kuchařka od Bé Há a její maminky, Brno, 2018, ISBN 978-80-264-

2229-7

BUREŠOVÁ, P.et al. Vybrané kapitoly z hotelnictví a gastronomie. Praha: Wolters Kluwer, 2014.

ISBN 978-80-7478-498-9.

DAVIS, LOCKWOOD & STONE, Food and Beverage Management, Burlington, 1998, ISBN 0-

7506-3286-0

Hegyesné Görgényi, É., Máté, B., Fekete Farkas, M. and Amir Vafaei, S. (2017). THE

ROLE OF SOCIAL MEDIA IN GASTRONOMY INDUSTRY.

KOCHOVÁ, Velká kniha o Vánocích, Praha, 2010, ISBN 978-80-204-2375-7

Luptáková, A. (2018). BCG matica a jej aplikácia vo vybraných gastronomických

prevádzkach.

NIENEMIER, PLANNING and CONTROL for FOOD and BEVERAGE OPERATIONS,

Michigan, 2001. ISBN 0-86612-231-1

METZ, GRÜNER & KESSLER, Restaurace a host – Základní odborné vědomosti restaurace-hotel-

kuchyně, Gruiten (Germany), 2003, ISBN 978-80-86706-18-4

PETZUCH, Gastronomický lexikon, Opava, 1995, ISBN 80-85819-39-2

Websites and further reading:

46

20 Most Common Restaurant Menu Design Mistakes, Aaron Allen & Associates, Global

Restaurant Consultants, https://aaronallen.com/blog/restaurant-menu-design-mistakes

(Accessed: 26 March 2019)

Mobile share of website visits worldwide 2018 | Statistic, Statista,

https://www.statista.com/statistics/241462/global-mobile-phone-website-traffic-share/

(Accessed: 20 March 2019)

How to Define Your Exact Target Restaurant Customer, Restaurant Engine,

https://restaurantengine.com/target-restaurant-customer/ (Accessed: 5 May 2019)

The Principles of Menu Engineering – Basic Kitchen and Food Service Management,

Opentextbc.ca,

https://opentextbc.ca/basickitchenandfoodservicemanagement/chapter/describe-the-

principles-of-menu-engineering/ (Accessed: 23 May 2019)

Raab, C. et al. (2006) „Activity-Based Costing Menu Engineering: A New and More

Accurate Way to Maximize Profits from Your Restaurant Menu‟, Journal of Foodservice

Business Research, 9(1), pp. 77–96. Available at:

https://search.ebscohost.com/login.aspx?direct=true&db=hjh&AN=24615309&lang=cs&si

te=ehost-live (Accessed: 9 May 2019)

https://aaronallen.com/blog/restaurant-menu-design-mistakes

https://www.statista.com/statistics/241462/global-mobile-phone-website-traffic-share/

https://restaurantengine.com/target-restaurant-customer/

https://opentextbc.ca/basickitchenandfoodservicemanagement/chapter/describe-the-principles-of-menu-engineering/

https://opentextbc.ca/basickitchenandfoodservicemanagement/chapter/describe-the-principles-of-menu-engineering/

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