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OVERVIEW
More restaurants are turning to efficiency consultants to help them expand their profits at a time when diners are spending less
The consultants offer tips on reducing costs and steering diners toward higher-profit menu selections
Restaurant revenues typically drop about 20% during recessions, but this time, they have dropped as much as 50% in some areas
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Lean Cuisine
Efficiency experts help restaurants squeeze more profit out of frugal diners

December 2009 | Enterprise
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BY NEIL PARMAR
SmartMoney

Kevin Moll is the kind of customer cost-conscious restaurants love. He takes his coffee without cream or sugar. He never pours a blob of ketchup next to his fries. He even prefers his fountain drinks a little watered down.

But it’s not his eating habits that restaurants prize most. It’s his advice.

Mr. Moll, CEO of National Restaurant Consultants, is one of a growing group of efficiency experts who help restaurants cut waste and maximize profits. They carefully price out a kitchen’s every move—like making ranch dressing every three days instead of daily, which can shave prep time by 15 to 18 minutes. They help fine-tune recipes to economize on ingredients. (Taking olive oil out of the marinara sauce saved one chain $17,000 a year.) And they “engineer” menus to draw attention to the items that generate the highest profit, like iced tea, which costs a restaurant as little as a nickel a glass.

‘A GAME OF PENNIES’

The $566 billion restaurant industry is anxious to save as much money as it can, preferably without diners noticing a difference. Despite signs of recovery in some parts of the economy, the restaurant industry is lagging, as it tends to do in bad times. Industry veterans like Lloyd Gordon, who has been consulting for the past 46 years, say times have never been tougher. Restaurant sales typically dropped 20% during past recessions, he says, but they’ve plunged as much as 50% in some parts of the country today.

Mr. Moll and his team of experts have come up with enough tips and tricks to fill a 175-page guidebook on how to run a profitable eatery. For his clients, the tiny cuts add up, generating savings or revenue-boosting ideas that improve profit margins, on average, by 15%. “Operating a restaurant,” the guide says, “is a game of pennies.”

Mr. Moll and his firm recently helped launch Organixx, a casual eatery in downtown Denver that projects an eco-friendly vibe. Diners have more than two dozen menu items to choose from, but many end up ordering the Asian stir-fry salad—a mix of veggies, crunchy noodles and tofu, chicken or beef, drizzled with toasted-sesame vinaigrette.

The salad is the most popular salad on the menu, and one of the most profitable. That’s no accident, says Mr. Moll. Relying on studies that track “eye flow” across menu pages, Mr. Moll advises his clients to place higher-profit items in easy-to-spot areas of the menu. So the Asian stir-fry, with ingredients that cost as little as 24% of the menu price, is listed at the top right corner, while the $9 grilled salmon burger (cost of ingredients: $2.78, or 31%) is intentionally buried at left center. “The menu drives everything,” says Mr. Moll.

To help keep food costs within a healthy 24% to 35% of overall expenses at Organixx, Mr. Moll brought in an on-site drill sergeant, Mary Putman, to keep the kitchen in line. When red peppers triple in price, she buys more zucchini to sub into the stir-fry and salads. If a line cook takes more than six minutes to prepare an order, she points sternly at her watch. Most important, she makes sure they’re measuring every ounce of food instead of just eyeballing ingredients, constantly nagging them to “quit heaping the scoop.”

While all of Organixx’s sandwiches cost $9, some are a little less generously proportioned. With the egg salad, you’ll get an eight-ounce scoop. But order the rock shrimp salad and your filling weighs only five ounces, because eggs are cheaper than shrimp.

Erwin Chang, owner of Organixx, acknowledges “it’s a very delicate decision” to change the portions, but it’s not hard to see his point of view as he describes the challenges of running a restaurant in this economic climate—especially when all those organic ingredients and other green touches come at a premium.

ONE SIZE FOR ALL

At least he’s not holding back on the water. That’s a strategy Mr. Moll recommended to another of his clients, Mici Handcrafted Italian, half a mile down the road from Organixx. Mici’s owners didn’t want to change or cut back on menu items like its famed hand-rolled meatballs, so Mr. Moll had to turn to the beverage lineup to find savings.

In addition to tweaking Mici’s wine list, Mr. Moll came up with a 10-point game plan for fountain drinks. Despite selling some 13,000 units a year, sodas still weren’t delivering any profit, according to co-owner Michael Miceli — even though they typically cost the restaurant only a dime a glass. Among Mr. Moll’s most effective recommendations were cutting out a middleman syrup supplier and offering only one drink size instead of three. Goodbye, costly cups.

One tip—don’t automatically serve patrons water, so they’re more likely to order a drink—has been controversial. Helen Rosner, who blogs about the restaurant industry, calls the practice “one of the craftiest I’ve heard of”—and says she’s seeing more eateries do it. Victor Gielisse of Culinary Institute of America, on the other hand, calls it “the socially responsible thing to do given our environment today.”

For his part, Mr. Miceli simply says, “We ask them what they want to drink. If they want water, we give water.” It certainly hasn’t hurt the bottom line; implementing this and other tips from Mr. Moll’s 32-page “operations analysis” has boosted revenue at Mici by 50% a week. In the world of kitchen cost cutting, that’s more than a few pennies.