Last updated on 19 Jan 2023
What is Menu Engineering and Why Do You Need It?
Menu engineering is a marketing-oriented approach to the evaluation of current and future menu pricing, design and content decisions. Menu engineering is a quantitative model designed to provide a basis for analyzing a menu's success both in terms of attracting and maintaining clientele as well as in terms of profitability. Effective menu engineering depends heavily on the profitability of your menu's various dishes.
Menu engineering focuses on three elements:
- Customer demand — The total number of customers served
- Menu mix — Number of each menu item sold in a given period
- Gross margin — The gross profit for each menu item
The Four Quadrants
First, analyze each item sold during a given period. Then each item is plotted on a scatter graph by menu item category (i.e., entrees). The vertical position is based on the margin of a single unit of sale. The horizontal position is based on sales mix as a percentage. These scatter diagrams divide menu items into four quadrants:
- ⭐ Stars — Menu items that are high both in popularity and gross margin. Examples: Paneer Makhni, Chicken Biryani, Dal Makhni
- 🐴 Work Horses — Menu items with high popularity and low margin. Examples: Raan, Laal Maas
- 🧩 Puzzles — Menu items with low popularity and high margin. Examples: Pineapple Raita, Green Salad, Tamatar ka Shorba
- 🐕 Dogs — Menu items that are low both in popularity and margin. Examples: Gucchi Mattar
What to Do with Your Findings
Identify items that can be enhanced to improve popularity, and opportunities to improve margin through recipe reformulation or price increase to match market values. Cull the menu to remove items that do not perform, thereby focusing sales efforts on those items that are popular and make you money.
Menu engineering is an ongoing process. Typically, the greatest success in increasing margin occurs the first time menu engineering is implemented.
Menu engineering is an important tool that should be used regularly by every restaurateur and hotelier to maximise profitability.
