Several years ago, category management was just an industry philosophy. An idealism, that owners, managers and operators need to break out every component in their operation that directly or non-directly effects profitability and then manage it as its own entity. Today, it is a concept that can make your business survive and grow.
When we happen upon an associate or a fellow operator, a favorite exchange is a handshake followed by “How’s business?” Whether being polite or nosey, it is crucial for us to know how others are faring in the world of food sales. The response can be anything from “Pretty darn good!” to “It stinks”. Yet, how many of us have concrete answers as to what has created this shift in momentum of our sales?
If sales are up, are they up over last year or last week? If they are down, is it due to one particular menu item or a change in the weather or economy?
Without something to reference, it is impossible to know and even more difficult to forecast the future. We have to understand our history, have documentation to reference and a plan of action at hand in order to create different results. The day-to-day functions of the job don’t afford the time to sit and analyze or document, or so we think. Ask those who do analyze and document and they will advise that you must make the time.
There is such a vast selection of applications within category management. Whether you are running a school cafeteria, a healthcare kitchen, a white-tablecloth restaurant, or quick service restaurant (QSR), everyone faces food cost, labor, the customer, meal day-parts, trends and the economy. Some of these are “controllable” while others are not. Within the philosophy of category management are applications to even out those factors that we consider “uncontrollable”.
Category management is a fancy food service way of saying “I am paying particular attention to certain aspects and effectively managing these aspects as it relates to profitability or sales”. By consistently looking at your food cost, waste and cost of labor, you will begin to recognize areas of simple improvements and effortlessly make an impact on your profitability. Very quickly you will have a handle on these areas, and be able to document changes or action plans for later reference. Your job then can jump from “This is what I do”, to instead being, “This is how and why I do what I do”.
What type of food service you are in will determine the best place to begin. For schools or healthcare, the initial breakdown may start with your given budget. As you well know-you have a given amount to work with, per person, per meal. Where is there room for flexibility or success within these boundaries? Probably the most challenging job is to be creative and provide the end user with exciting and nutritional meals within an institutional setting and budget. Profitability seems capped, and unless you can run your kitchen by yourself and get your food for free, it may seem senseless to try. Take a step back, and write down your factors of profitability and/or success. Food cost, labor, waste, I would guess may be your top three. Begin to track in writing, (put a dollar figure to) the trends of each of these categories on a daily or weekly basis. Some of you may have history of these trends available, and you will be able to compare and assess. Those of you who do not, will be grateful in a year or more to be able to refer back.
QSR and non-institutional food service has a vaster array of applications. Certainly food cost is always a great starting point when profitability is your focus. In the realm of restaurant and delis however, I think operators look equally as much at how to increase sales and business. The number of operators that rally every day to work, and just buy the food, prep the food, cook the food and sell the food, without looking any further, will experience a limited success –even if they are greatest cook in the world.
In order to generate more business, you have to understand your past and current business. You can determine easily by tracking individual menu items, what sells in volume, what are slow movers, which items yield the higher dollar profit. Consider each meal-day-part, and your performance in each. Is there room for improvement in your breakfast day part, or maybe your customer base demands an “in-between” meals offering. Does your menu have a functional desert offering? Is there a current trend that you need to add to your menu? Does your place of business offer a unique niche’? Why or why not?
These questions are all “categories”, and mastering one at a time puts you on the road of knowledge. Choose a focus, work with it and you will not only see immediate results, but you have created a tool to use every day and in the future. Tracking trends, whatever you start with, will take some initial effort. Ask your DSR or distributor for help and suggestions in getting started. It will be more painless than you think.
After years in the food service industry, I have met only one operator who has such an amazing handle on this concept. You can’t help but be impressed with the daily execution of everything he does. He has knowledge of every detail from what part of the country his potatoes are harvested, to how many roast beef sandwiches he sold three years ago in the month of June. Unrealistic? Who has time? Ask yourself this too; do I want to do the best job I can? If you answer yes, then make the time and make category management a reality. With a greater understanding of category management, you choose different applications that require little time and effort yet can yield significant results. You too, with practice and application, can experience the great epiphany of category management and its positive impact in your food service career.
The results of category management, provide you the knowledge needed to effectively run your business, versus allowing the business to run you.