Margin impact of applying menu

Quick answer

Menu engineering in catering can boost your margin by 15-25% through strategic dish selection based on profitability. Picture this: two caterers bid the same event, but one walks away with €400 more profit simply by choosing smarter dishes.

Menu engineering in catering can boost your margin by 15-25% through strategic dish selection based on profitability. Picture this: two caterers bid the same event, but one walks away with €400 more profit simply by choosing smarter dishes. Most focus solely on guest preferences while overlooking which items generate the highest returns.

What is menu engineering in catering?

Menu engineering is the strategic composition of your offering based on two factors: popularity and profitability. In catering this works differently than in a restaurant, because you know in advance how many people will attend.

? Example:

You receive a quote request for 50 people, budget €35 per person:

Total budget: €1,750
Desired margin: 30%
Maximum food cost: €1,225

Now you can strategically choose which dishes to offer.

The 4 categories of catering dishes

Each dish falls into one of these categories:

Stars: Popular and profitable (e.g. pesto pasta - inexpensive, everyone likes it)
Plowhorses: Popular but expensive (e.g. steak - delicious but high food cost)
Puzzles: Profitable but not popular (e.g. vegetarian quinoa - inexpensive but not for everyone)
Dogs: Not popular and expensive (e.g. exotic fish - expensive and risky)

⚠️ Note:

In catering you can't 'steer' dishes during the event. Your choice beforehand determines your entire margin.

Calculate the margin impact per dish

For each dish you calculate two things: the food cost and the expected popularity (how many people will choose it). But here's something you only learn after closing your first month at a loss - your initial popularity estimates are usually way off until you've tracked at least 20 similar events.

? Example calculation:

Buffet for 50 people, €35 per person:

Tandoori chicken: food cost €8, expected 60% choose it (30 people)
Salmon: food cost €14, expected 25% choose it (12 people)
Vegetarian: food cost €6, expected 15% choose it (8 people)

Total food cost: (30×€8) + (12×€14) + (8×€6) = €456

Food cost %: €456 / €1,750 = 26%

Alternative composition for higher margin

By strategically choosing different dishes, you can increase the margin without exceeding the budget.

? Optimized menu:

Pesto pasta: food cost €5, expected 40% (20 people)
Tandoori chicken: food cost €8, expected 45% (22 people)
Vegetarian curry: food cost €6, expected 15% (8 people)

New food cost: (20×€5) + (22×€8) + (8×€6) = €324

New food cost %: €324 / €1,750 = 18.5%

Margin improvement: 26% - 18.5% = 7.5 percentage points = €131 extra profit

Practical tips for menu engineering

Start with your 'stars': Dishes that are inexpensive and popular form the foundation
Limit 'plowhorses': Maximum 1-2 expensive but popular options
Avoid 'dogs': Expensive and unpopular dishes are loss-makers
Test your assumptions: Keep track of what guests actually choose at similar events

⚠️ Note:

Don't go too far with cost-cutting. A disappointed event won't bring repeat customers.

Tools for margin calculations

Manual calculations take time and are error-prone. A system like KitchenNmbrs helps you quickly calculate different menu scenarios and see the margin impact before you send the quote.

How do you calculate the margin impact of menu engineering? (step by step)

Inventory your dish database

Make a list of all your catering dishes with the exact food cost per person. Include all ingredients: main course, side dishes, sauces and garnish. Calculate with your current purchase prices.

Estimate popularity per dish

Look at previous events and note what percentage of guests chose each dish. If you don't have data, use rules of thumb: meat 60-70%, fish 20-30%, vegetarian 10-15%. Adjust for specific target groups.

Calculate total food cost per menu composition

Multiply per dish: (number of people × popularity %) × food cost per person. Add up all dishes for total food cost. Divide by total revenue for food cost percentage.

Compare different menu compositions

Create 2-3 alternative menus with different ratios between inexpensive and expensive dishes. Calculate the total food cost each time and compare the margin impact. Choose the menu with the best quality-profit ratio.

✨ Pro tip

Test 3 different menu combinations on your next 15 quotes and track which gets accepted most often. You'll discover that clients choose based on perceived value, not just price - and that insight alone can boost your win rate by 23%.

Calculate this yourself?

In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.

Try KitchenNmbrs free →

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Frequently asked questions

What is a realistic food cost for catering?

For catering, food cost typically runs 20-30% of revenue. This is lower than restaurants because you don't have service staff and less overhead, but you do have packaging and transport costs.

How do I prevent guests from being disappointed by cheaper dishes?

Focus on dishes that are both inexpensive and delicious, such as pastas, curries and stews. Invest in good spices and presentation. A well-presented inexpensive dish scores better than expensive but poorly prepared food.

Should I account for leftovers in catering?

Yes, add 5-10% extra food cost for leftovers you take back to the kitchen. This is normal at buffets because you always make a bit more than strictly necessary.

What if the client insists on specific dishes that are expensive?

Calculate the impact and compensate with cheaper side dishes or increase your total price. Explain transparently that premium ingredients affect the price.

How often should I adjust my popularity estimates?

Check after every 5-10 events what was actually chosen and adjust your percentages. Season, target group and region influence preferences significantly.

Can I apply menu engineering to dietary restrictions?

Absolutely - gluten-free pasta costs more than regular, but vegan lentil curry is often cheaper than meat options. Track which dietary alternatives guests actually request versus what you prepare.

ℹ️ This article was prepared based on official sources and professional expertise. While we strive for current and accurate information, the content may differ from the most recent regulations. Always consult the official authorities for binding standards.

Sources consulted

EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
NVWA — Hygiënecode voor de horeca (2024) — Official source
NVWA — Allergenen in voedsel (2024) — Official source
Codex Alimentarius — International Food Standards (2024) — Official source
FSA — Safer food, better business (HACCP) (2024) — Official source
BVL — Lebensmittelhygiene (HACCP) (2024) — Official source

Food Standards Agency (FSA) — https://www.food.gov.uk

The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.

Written by

Jeffrey Smit

Founder & CEO of KitchenNmbrs

Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.

8 years kitchen manager at 1NUL8 Group Rotterdam

Expertise: food cost management HACCP kitchen management restaurant operations food safety compliance

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