Most restaurants lose 15-20% of potential profit by not knowing which dishes actually make money. Menu engineering reveals which of your 60 dishes generate real profit and which drain your margins. The process takes just 2-3 hours but transforms how you think about every plate that leaves your kitchen.
What exactly is menu engineering?
Menu engineering crosses two numbers: popularity and profitability. This creates 4 distinct categories:
- Stars: Popular and profitable (promote!)
- Plowhorses: Popular but not profitable (adjust)
- Puzzles: Not popular but profitable (sell more)
- Dogs: Not popular and not profitable (remove)
Gather the right data for your analysis
You need two datasets from the past 90 days:
💡 Example sales data:
Bistro with 60 dishes, 3 months of data:
- Steak: 240 sold
- Pasta carbonara: 180 sold
- Salmon fillet: 95 sold
- Vegetarian lasagne: 25 sold
Plus exact ingredient costs per dish.
Sales data from your POS system: Number of portions sold per dish over 3 months. Shorter periods give skewed results due to seasonal fluctuations or special events.
Cost data per dish: Exact ingredient costs including garnish, sauces, cooking oil and everything that touches the plate.
Calculate profitability per dish
For each dish, calculate the gross profit per portion:
Gross profit = Selling price (excl. VAT) - Ingredient costs
💡 Example profit calculation:
Steak menu €32.00 incl. VAT:
- Selling price excl. VAT: €29.36
- Ingredient costs: €10.50
- Gross profit: €18.86 per portion
At 240 sold = €4,526 gross profit
⚠️ Note:
Always calculate with the price excl. VAT. Your menu price includes 9% VAT for food. Divide by 1.09 to get the net price.
Determine the popularity of each dish
Rank all 60 dishes by portions sold. The top 30 get labeled "popular," the bottom 30 "not popular."
Also calculate each dish's market share:
Share % = (Sold of this dish / Total portions sold) × 100
💡 Example popularity:
Total sold all dishes: 3,200 portions
- Steak: 240 portions = 7.5% (popular)
- Pasta: 180 portions = 5.6% (popular)
- Vegetarian lasagne: 25 portions = 0.8% (not popular)
Determine the profitability benchmark
Rank all dishes by gross profit per portion. The top 30 get labeled "profitable," the bottom 30 "not profitable."
Calculate the average gross profit across all dishes. This becomes your profitability threshold - dishes above this line are profitable. One of the most common blind spots in kitchen management is assuming high-priced dishes are automatically profitable without checking actual margins.
Place each dish in the right quadrant
Now you combine popularity and profitability:
- Stars: Popular + Profitable (keep and promote)
- Plowhorses: Popular + Not profitable (raise price or lower costs)
- Puzzles: Not popular + Profitable (promote more or reposition)
- Dogs: Not popular + Not profitable (consider removing)
💡 Example classification:
- Star: Steak (240x sold, €18.86 profit)
- Plowhorse: Fish & chips (200x sold, €8.20 profit)
- Puzzle: Duck breast (45x sold, €22.50 profit)
- Dog: Vegetarian quiche (25x sold, €6.80 profit)
Calculate total impact per quadrant
Add up the total gross profit each quadrant generates:
Total impact = Quantity sold × Gross profit per portion
This reveals where your biggest opportunities hide. Typically, Stars generate 60-70% of total profit while representing just 20-30% of menu items.
⚠️ Note:
Don't immediately remove all Dogs. Some serve specific customer groups - vegetarians, children, dietary restrictions. Focus first on the biggest loss-makers.
Create an action plan per quadrant
Stars: Give these dishes premium placement on your menu, train staff to recommend them actively, feature them as daily specials.
Plowhorses: Raise prices by €1-2 or reduce ingredient costs through smaller portions or alternative ingredients.
Puzzles: Boost sales through better menu descriptions, strategic repositioning or focused staff training.
Dogs: Consider removal or major adjustments. They consume kitchen resources and staff attention without contributing to profit.
How do you calculate menu engineering? (step by step)
Gather sales data from 3 months
Pull from your POS system the number of portions sold per dish over the last 3 months. Shorter periods give skewed results due to seasons. Also note the selling prices per dish.
Calculate cost price and gross profit per dish
Add up all ingredient costs for each dish (including garnish and sauces). Calculate gross profit: selling price excl. VAT minus ingredient costs. This is your profit per portion.
Rank by popularity and profitability
Sort all dishes by number sold (popularity) and by gross profit per portion (profitability). The top half of each list gets the label 'high', the bottom half 'low'.
Place dishes in the 4 quadrants
Combine popularity and profitability: Stars (both high), Plowhorses (popular but not profitable), Puzzles (profitable but not popular), Dogs (both low).
Calculate total impact per quadrant
Multiply for each dish: quantity sold × gross profit per portion. Add up per quadrant. This shows where your biggest profit opportunities lie and which adjustments have the most impact.
✨ Pro tip
Focus your first analysis on dishes that sold more than 50 portions in 90 days. These 15-20 items likely represent 75% of your total volume and profit impact.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Do I need to analyze all 60 dishes at once?
Start with your 20 best-selling dishes - they typically generate 80% of your revenue. Once you've optimized those, tackle the remaining items. This prevents analysis paralysis and delivers quick wins.
What if a dish is seasonal?
Use only the months it was actually available. A summer salad sold May-September shouldn't compete against year-round dishes. Consider running separate analyses for each season.
How often should I repeat menu engineering?
Every 3 months works well for most restaurants. Popularity shifts with seasons, supplier costs change, and new dishes alter the competitive landscape within your menu.
Can I always remove Dogs?
Not always. Some Dogs serve essential customer segments - vegetarians, children, allergy sufferers. Focus on removing Dogs that have both low sales AND no strategic purpose.
What if my POS system lacks detailed sales data?
Track manually for 2-3 weeks using daily tally sheets. It's labor-intensive but provides enough data to identify your biggest winners and losers.
Should I factor in prep time differences between dishes?
For your first analysis, stick to ingredient costs only. Once you master basic menu engineering, you can add labor complexity as a secondary factor.
How do I handle dishes with multiple portion sizes?
Treat each size as a separate menu item. A small pasta and large pasta have different costs, prices, and popularity patterns - analyze them independently.
📚 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
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (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.
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