PROTECTING THE BOTTOM LINE

The array of commodities that can significantly impact a restaurant’s bottom line is vast and varies according to the specific focus and offerings of the establishment. Key commodities to track might include oil and natural gas, both essential in broader operational costs, and specific food items such as beef, corn, pork, chicken, shrimp, eggs, butter, cheese, wheat, soybeans, sugar, and coffee. Understanding the correlation between these commodities and your restaurant’s menu offerings is vital. For example, a cafe would closely track coffee and sugar prices, while a steakhouse might focus on beef costs. Constantly monitoring these commodities helps in making timely decisions like menu adjustments, promotional campaigns, or shifts in suppliers, enabling the restaurant to adapt to market changes and preserve profitability. 

Emphasizing the understanding and tracking of these key commodities in your operational strategy ensures that you are poised to respond to market fluctuations, aligning your offerings with cost-effective solutions that resonate with your guests’ preferences and the overall financial health of your establishment.

Commodity management in the restaurant industry goes beyond just monitoring the fluctuating costs of food items; it involves a strategic alignment of your menu with current market trends. Different types of restaurants will rely on various commodities, making it essential to align menu offerings with the relative prices of those commodities. For example, if pork prices drop, a restaurant might promote pork tacos over steak to leverage cost advantages.

Furthermore, it’s essential not to overlook non-food commodities like oil, which plays a pivotal role in determining costs across the supply chain. An increase in oil prices can ripple through the market, affecting everything from plastic packaging to the freight costs of transporting ingredients. Such changes can have a subsequent impact on overall pricing within the restaurant, requiring vigilance to ensure items remain profitable and meet their targeted gross profit goals.

Staying informed about commodities and broader industry trends is vital in this ever-changing landscape. Subscriptions to business journals like the Wall Street Journal or other industry-specific publications can provide valuable insights to help you monitor and adapt to fluctuations in commodity prices.

Ultimately, managing commodities in a restaurant setting is a multifaceted task that requires a keen understanding of both global market trends and specific industry needs. By aligning offerings with current market conditions, monitoring both food and non-food commodities, and staying informed through reputable sources, restaurateurs can optimize profitability while maintaining quality and value for their guests.