What is Menu Engineering?
Menu Engineering is the process of analyzing menu items based on their sales performance and profitability. It aims to design a menu that boosts profits and streamlines menu management. This essential tool helps restaurants and cafes understand customer ordering behavior while aligning menu strategies with business goals.
The core principle involves categorizing menu items based on two factors:
- Popularity: The frequency at which an item is ordered.
- Profitability: The profit generated by the item.
Benefits of Menu Engineering
- Increased Profits: Identify which items to promote, refine, or remove.
- Cost Reduction: Analyze ingredient usage and minimize underperforming costs.
- Customer Insight: Use real sales data to develop innovative menu strategies.
The 4 Key Categories in Menu Engineering
Menu items are divided into four categories, each requiring a distinct strategy:
1. Stars
✅ High Popularity – High Profitability
These are customer favorites that generate significant profits. They should be prominently featured and actively promoted.
Examples:
- Frequently ordered, high-margin items such as steaks and bubble tea.
Strategies:
- Highlight these items with prominent visuals in the menu.
2. Plowhorses
✅ High Popularity – Low Profitability
These items sell well but have lower profit margins, often due to high ingredient costs or low selling prices.
Examples:
- Staple dishes with premium ingredients, such as shrimp fried rice.
Strategies:
- Adjust costs by reducing expensive ingredients or portion sizes.
- Bundle with profitable add-ons, like beverages, to increase the average order value.
3. Puzzles
✅ High Profitability – Low Popularity
These items have high profit margins but lack customer interest.
Examples:
- Niche dishes like fusion cuisine or specialty desserts.
Strategies:
- Enhance presentation with appealing visuals and descriptions.
- Offer introductory discounts or promotions to increase exposure.
4. Dogs
✅ Low Popularity – Low Profitability
These items generate low profits and are seldom ordered by customers.
Examples:
- Specialty dishes catering to a very niche audience.
Strategies:
- Consider removing these items from the menu.
- Revise recipes or pricing to make them more attractive.
Steps to Categorize Menus Using Menu Engineering
To accurately categorize menu items, use sales data over a sufficient period. A 3-month sales history is recommended to capture long-term customer behavior while minimizing seasonal or promotional distortions.
1. Gather Sales Data
- Extract historical sales reports from your POS system.
- Calculate the profit for each menu item using a recipe cost calculator template.
2. Calculate Averages
- Determine the average popularity across all menu items.
- Calculate the average profitability for all menu items.
3. Categorize Menu Items
- Compare each item’s performance against the averages.
- Assign items to one of the four categories: Stars, Plowhorses, Puzzles, or Dogs.
4. Refine and Strategize
- Use the categorization insights to refine the menu.
- Track the outcomes of implemented changes.
Menu categorization should be repeated every 3-6 months to adapt to changing customer behavior and evolving sales trends.
Start Analyzing Your Menu with Ease!
This tool helps you efficiently group and analyze your menu items to boost sales and reduce costs.
- Seamless integration with Pro Recipe Cost Calculator Templates for instant analysis.
- Automatic menu categorization.
- Insight into underperforming ingredients and profitability improvement.
Enhance your business efficiency and profitability with this powerful tool!
