Food cost % tells you whether each dish is priced well. It doesn't tell you which dishes actually carry your restaurant. A dish with a perfect food cost that nobody orders earns you nothing. Menu engineering looks at two things together, how popular a dish is and how much money it makes per plate, and sorts every item into one of four groups, each with a clear next step.
The method was developed in the early 1980s by hospitality professors Michael Kasavana and Donald Smith, and it's still one of the most useful hours a restaurant owner can spend each month.
What you need
- Units sold for each dish over a period, ideally a full month. Your till report has this.
- Profit per plate (contribution margin) for each dish: selling price before tax minus plate cost.
Step 1: Measure popularity
Work out each dish's share of total sales in its menu section: units sold ÷ total units sold. A dish counts as popular if its share is at least 70% of an equal share. With 5 dishes, an equal share is 20%, so the popularity line is 70% × 20% = 14%.
Step 2: Measure profitability
Work out the average profit per plate across the section, weighted by how many of each dish you sold: total profit from all dishes ÷ total units sold. A dish counts as profitable if its own profit per plate is at or above that average.
Step 3: Sort every dish into four groups
| Group | Popular? | Profitable? | What to do |
|---|---|---|---|
| Star | Yes | Yes | Keep it, feature it, and protect its quality and portion. |
| Plowhorse | Yes | No | Guests love it but it earns little. Raise the price a little or trim the plate cost. |
| Puzzle | No | Yes | It earns well but few order it. Move it to a better spot on the menu, rename it, or have staff recommend it. |
| Dog | No | No | Rework it or take it off the menu. |
A worked example
The five mains on a sample bistro menu, one month of sales, analysed as their own section.
| Dish | Sold | Share | Profit per plate | Group |
|---|---|---|---|---|
| Braised beef with mashed potato | 260 | 36.1% | €10.72 | Plowhorse |
| Roasted duck with red cabbage | 70 | 9.7% | €10.77 | Dog |
| Mushroom risotto with parmesan | 180 | 25.0% | €11.85 | Star |
| Fish of the day, lemon butter | 150 | 20.8% | €14.16 | Star |
| Penne pomodoro | 60 | 8.3% | €9.67 | Dog |
Popularity line: 14%. Average profit per plate: €8,377.43 total profit ÷ 720 plates = €11.64.
What this owner should do next: keep the risotto and the fish exactly as they are. The braised beef is the best seller but earns below the mains average, so nudge its price up by 50 cents or trim its plate cost; it sells so well that guests are unlikely to notice. The duck falls below both lines, but it still earns more per plate than the beef: move it to a better spot and ask staff to mention it before deciding anything. Rework the penne or replace it.
Getting it right
- Compare like with like. Analyse starters with starters and mains with mains. A coffee and a main course shouldn't be in the same table.
- Use a full period. One quiet week can make a good dish look like a Dog.
- Change one thing at a time. If you move a dish and raise its price in the same month, you won't know which change worked.
- Repeat monthly. Dishes move between groups as seasons, prices and guests change.
Let the sheet sort it for you
The Menu Profit Planner includes a Menu Engineering tab: type in units sold and it calculates the popularity line, the average profit, and each dish's group with a suggested next step. It's also part of the Restaurant Starter Kit.
Related
- Read: How to Price a Menu: The Food Cost % Method
- Read: How to Calculate Food Cost per Plate
- Also useful: Printable Menu Templates, print the new menu once the Stars are in the right places
Every template in Restaurant Notes is in the Complete Restaurant Collection: 25 tools in one download.