Many organizations price bottled wine to meet specific cost percentage objectives. While it might be the easiest way to meet budget objectives, there are a number of problems with this approach. It used to be normal to double or triple the retail price of wine for restaurant menus.
In Part 1 (September/October 2011), we looked at reducing F&B costs through competitive bidding with GPOs. Now we turn our attention to the bidding features of an F&B procurement system. The most important thing to look for in a procurement system when it comes to bidding is its ability to collect bids electronically from all vendors. If vendor bids must be collected and entered manually by hotel staff, the bidding benefit is outweighed by the labor cost. The more sophisticated F&B procurement systems interface directly with the larger distributors and import the bids electronically while providing importable Excel spreadsheets or
Hotel operators have long understood the value of negotiating with foodservice vendors for better pricing. So the question isn’t really whether it’s a good idea to get bids on prices. The key question is how well they do it. Food and beverage costs will never be lower than the total amount spent, so the obvious goal is to get the best pricing possible for the quality and service level required. Unfortunately, many hotels are very casual about how they do this. In many cases, chefs simply talk to distributors about items they plan to order. Some chefs have favorite suppliers
What’s like doubling sales, only better? What if, instead of trying to increase sales, the focus instead shifted to significantly increasing profits? Consider that the hotel with a 5% F&B profit margin keeps only a nickel in profit for every dollar in sales. To make $100,000 in profit, it takes $2 million in sales. Reducing unnecessary costs by one percentage point (for example, reducing food cost from 35 to 34 percent), would cause profits to go up by one percentage point (in this case from 5 to 6 percent). Profit would go from $100,000 to $120,000. Without reducing costs by
Buffets are an integral part of the casino business, and casino operators focus a great deal of attention on them, always working to reduce costs. While buffets may not be as big a part of the overall hotel business, they are widely used for breakfast. I talked with a few casino operators to get their buffet insights. Our experts are Marty Miles (MM), president of Casino Food & Beverage Solutions, LLC, and formerly the corporate VP of F&B for Harrah’s Entertainment, Inc.; Victor Gonzalez (VG), executive director of F&B for the Pascua Yaqui Tribe’s Casino of the Sun and Casino