Three operators share their strategies for maximizing margins as costs continue to rise and consumers grow wary of menu price hikes.

Consumers seek affordability and operators want profitability. Can the two co-exist in today’s restaurant economy?

Three chain restaurant CMOs showed how they’re finding the right balance during a panel on Monday at Informa’s Restaurant Leadership Conference in Phoenix. Joel Bulger of WOWorks, Cathy Chavenet of Paris Baguette and Katie Love of Sonny’s BBQ shared menu strategies that are working for them. Here are some of their takeaways.

Focus on items that are simple to execute. When a menu item is operationally complex, it will turn out to be more expensive than it seems if you’re basing price on cost of goods, said Love. If you’re using a lot of labor and bringing in more SKUs, it erodes profits. And if the complex item is not executed well, it can turn off guests and they won’t return. Make simplicity a priority to improve margins.

Cross-utilize to the max. The operators all agreed that they never bring in a SKU for just one menu item — it has to work across multiple platforms. Chavenet, who oversees R&D along with marketing at Paris Baguette, shared a clever cross-utilization idea that doubled as a zero-waste solution. Before large cakes are frosted, the tops and sides may be shaved to even them out and make them smoother, resulting in a pile of cake scraps. The team recycles those scraps to create “cake cups” that are layered with fruit and cream and sold for $3 as a small treat.

Value = food + experience. Fast-casual and full-service restaurants are working to deliver value without discounts, deals and low prices. For WOWorks’ concepts like Frutta Bowls and Saladworks, it’s about making it easier on the consumer. “For a lot of my brands, customers walk down the line picking ingredients to build a bowl or plate,” said Bulger. “If you’re new and there are 10 people behind you, it’s terrifying, so we created chef favorites that are curated. They sped up the line and accounted for about 12% of orders.” There’s a lot of talk about how a restaurant’s ambience and service can add value, but ease of ordering may not be as obvious.

Value means different things on- or off-premise. For guests dining in at Sonny’s BBQ, the Southern-style hospitality and tempting aroma of smoke wafting through the restaurant creates value, said Love. But for takeout and delivery customers, it’s about speed, convenience, accuracy and food quality. The same goes for Paris Baguette — without the smoke. “You walk into our cafés and our cases are filled with fresh, house-baked pastries and beautiful cakes,” said Chavenet. “Combined with our photography and messaging, it creates an immersive experience.”

High demand can translate to higher menu prices. The demand for protein is at an all-time high, and Sonny’s leaned into that demand with limited-time $10.99 protein plates featuring cost-effective chicken and pork. “They performed really well, but when the promotion ended, our customers practically stormed the gates,” said Love. Realizing they could lose loyal guests, Sonny’s brought back the protein plates at a higher price: $12. “We haven’t had a single comment from somebody calling out that we raised the price by $1, and the plates have been performing better than before,” she added.

Beverages are profit centers. Operators have known for a long time that high-margin, low-cost drinks are a sure way to increase the check, but these days, those drinks have to be on-trend. WOWorks has added a virtual dirty soda brand to its portfolio, which is being tested at several locations. “They couldn’t be easier to make — soda, plus some sort of sweet cream, plus pumps,” said Bulger, “and it’s very high profit and purely incremental, especially with delivery orders.”

Paris Baguette does seasonal LTOs, with a theme that weaves throughout the food and beverage menu. This summer, it’s blueberries. The fruit is showing up in pastries and cakes as well as drinks, such as blueberry latte, blueberry lemonade and blueberry matcha. And Sonny’s has developed a line of non-alcoholic cocktails geared to Gen Zers, since the chain’s customer demographic skews a bit older, said Love. The young team members are loving the flavors and selling the mocktails, she said, an indication that Sonny’s hit the target.

Tell your story. The three marketing pros agreed that it’s good to brag a little. Market the quality of your ingredients, the hand-crafted techniques you’re using, the baker, chef or pitmaster in the back of the house, the origins of a menu item … all those stories enhance a brand’s value in the eyes of the consumer and can justify the price you charge. “Make people feel good about the money they’re spending in your restaurant,” said Love.

Informa’s media brands, Restaurant Business and Nation’s Restaurant News, moderated several of the panels and sessions at the Restaurant Leadership Conference, which concluded on Wednesday.

Source https://www.restaurantbusinessonline.com/marketing/making-menu-works-hard-boost-profitability