Rising ingredient costs are like a silent leak in your restaurant's profits. Your menu prices stay the same while your food costs quietly drain away margins. Menu engineering after price increases reveals which dishes still make money and which ones need immediate attention.
Why menu engineering after price increases is crucial
Your supplier bumps prices by 15%, but you keep serving the same menu at the same prices. Every dish sold chips away at your bottom line. Menu engineering separates your profit-makers from your money-drains.
⚠️ Heads up:
Most operators assume their crowd-pleasers are cash cows. But after ingredient spikes, your top seller might become your biggest loss leader.
First, calculate your new food cost per dish
Menu engineering needs two data points: how popular each dish is and how profitable it remains. Start by recrunching your food costs with the new ingredient prices.
💡 Example:
Your pasta carbonara previously cost:
- Ingredients: €5.10
- Selling price: €18.50 incl. VAT (€16.97 excl.)
- Food cost: 30.1%
After 15% ingredient price spike:
- Ingredients: €5.87
- Selling price: still €16.97 excl. VAT
- Food cost: 34.6%
From money-maker to margin-killer!
The 4 quadrants of menu engineering
Sort your dishes by popularity (sales volume) and profitability (food cost above or below 33%):
- Stars: High sales + profitable → Push these harder!
- Plowhorses: High sales + unprofitable → Fix pricing or portions
- Puzzles: Low sales + profitable → Boost marketing
- Dogs: Low sales + unprofitable → Cut them loose
💡 Example analysis:
Restaurant with 12 mains after ingredient price jump:
- Stars: 3 dishes (25% of menu, 45% of revenue)
- Plowhorses: 4 dishes (33% of menu, 40% of revenue)
- Puzzles: 2 dishes (17% of menu, 8% of revenue)
- Dogs: 3 dishes (25% of menu, 7% of revenue)
Action plan: fix 4 Plowhorses, axe 3 Dogs
Calculate the impact per adjustment
For each dish you're planning to tweak, crunch the numbers on what that change delivers. This shows you which moves pack the biggest punch. From tracking this across dozens of restaurants, the Plowhorses with highest sales volume should get priority attention.
💡 Impact calculation:
Pasta carbonara (Plowhorse):
- Current food cost: 34.6%
- Target food cost: 30%
- Weekly sales: 80 portions
Option 1 - Bump price to €20.50:
- New food cost: €5.87 / €18.81 = 31.2%
- Extra margin: €1.84 per portion
- Annual gain: €1.84 × 80 × 52 = €7,654
Practical implementation of adjustments
You've got your action plan - now roll it out step by step. Gradual changes prevent sticker shock and customer backlash.
- Week 1: Drop Dogs from the menu
- Week 2: Raise prices on your 2 biggest Plowhorses
- Week 3: Spotlight Stars and Puzzles with extra promotion
- Week 4: Adjust remaining Plowhorses
⚠️ Heads up:
Watch your sales data after each price bump. If a dish tanks in popularity post-increase, it might slide from Plowhorse straight into Dog territory.
How food cost calculators streamline menu engineering
Manually recalculating margins across your entire menu after price increases eats up hours. Tools like KitchenNmbrs automatically update your margins when you input new purchase prices, instantly flagging which dishes need attention.
How do you perform menu engineering after price increases?
Update all purchase prices
Go through your supplier invoices and update all increased prices in your system. Don't forget spices, oils and small ingredients - those often rise the most.
Calculate new food cost per dish
Use the formula: (new ingredient costs / selling price excl. VAT) × 100. Mark all dishes above 33% food cost as 'unprofitable'.
Analyze popularity from sales data
Check your POS system for the last 3 months. Divide your dishes into: popular (above-average sales) and unpopular (below-average sales).
Divide into 4 quadrants
Create a list per category: Stars (popular + profitable), Plowhorses (popular + unprofitable), Puzzles (unpopular + profitable), Dogs (unpopular + unprofitable).
Calculate impact per adjustment
For each Plowhorse: calculate how much extra margin a price increase or recipe adjustment generates per year. Prioritize based on biggest impact.
✨ Pro tip
Track sales data for 3 weeks after implementing price increases on your highest-volume Plowhorses. If sales drop more than 15%, you've likely overshot the market's price tolerance and need to dial back.
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
How often should I do menu engineering after price increases?
Review your food costs quarterly minimum, but jump on it immediately with major increases over 10%. Don't let profit erosion compound over months.
Is it better to raise prices or adjust recipes?
Depends on your clientele and positioning. Price-sensitive crowds respond better to portion tweaks, while upscale diners typically accept reasonable price adjustments.
What if my bestseller becomes a Plowhorse?
Handle with care - raise the price gradually or trim portions slightly. A high-volume dish that bleeds money will devastate your margins fast.
How many dishes should I remove at once maximum?
Cap it at 20-25% of your menu in one go. Customers need variety, and too many changes at once creates confusion.
Should I account for seasons in menu engineering?
Absolutely - some ingredients spike seasonally while others drop. Time your menu engineering around predictable seasonal price swings for maximum impact.
What's the minimum sales volume to keep an unprofitable dish?
If a dish represents less than 3% of total sales and runs above 35% food cost, it's usually dead weight. Focus your energy on items that move volume.
📚 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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