Take Control of Budgets

6/19/20

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Take Control of Your Foodservice and Nutrition Budgets

Suzan Jackovatz, RDN, LD, President, Grace Nutrit ion Consult ing, LLC Reference information provided by Gordon Food Service

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© 2020 Association of Nutrition & Foodservice Professionals

¡ MENU:§Menu planning to meet budget guidelines

¡ MONITORING:§Managing department spend downs and evaluate costs PPDs (Per

Patient Day)¡ EVALUATING:

§Pros and Cons of scratch cooking vs. convenience products§Real costs and outcomes

¡ STRATEGIES/TIPS:§Adjust your menu to meet needs

Outline & Learning Objectives

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The Menu

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¡Main cost centers include Menus, Chemicals/Supplies and Staffing, Snacks/Supplements, Enteral Products

¡Staff levels must be set to meet needs.¡Menus must meet customer needs:

§What is the menu style? (select, non-select, cycle seasonal, weekly)§What type of service (buffet, fine dining, room service, central kitchen,

etc)§Who are your customers (seniors, school age, adults, special needs)§When is service needed (how many meals per day, times)§Location (how many dining rooms, in room trays served)§Equipment available§Enough staff and skilled labor (professional chefs, longevity, etc.)

The Menu- Factors to Consider

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¡ If you have an established customer base, you may already know what food is preferred. If not consider:§Menu questionnaires§Menu committees§Customer feedback

¡Healthcare facilities should work with their Registered Dietitian to ensure nutritional needs are met for the customers being served

¡ If between meal snacks and food related activities are included in your budget, this must also be included when assessing food cost

The Menu- Factors to Consider

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¡Most companies have an established food cost per Patient Day (PPD) already planned

¡Consider food cost while planning menus¡Most software packages can do this for you

§Need to ensure the recipes are the ones you are using§Make sure products used in the software are the ones you are using§Look at portion sizes!

¡ It can also be done by hand!§Calculating by hand takes longer, but can be very accurate§ Is a good idea if the products used in the software are different§Sometimes use a sample to estimated cost (ie cost out 2 of 4 weeks,

choose the higher cost weeks- estimated)

Menus: Calculate Cost

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¡Add on snack costs (and supplements if applicable)¡Add on cost of food related activities

§Estimate how much is purchased per month and divide by 30 days (add to total)

¡Don’t forget to add the cost of beverages¡For healthcare, include items provided to Nursing on a daily

basis

Menus: Calculate Cost

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¡Example:§Average meal cost per day: $ 5.00§Activities cost per day: $ .10§Nursing food supplies per day: $ .10§Snacks/Pantry stock: $ .20

§TOTAL= $5.40 PER PATIENT PER DAY

DETERMINE MONTHLY BUDGET: $5.40 X CENSUS X # DAYS IN THE MONTH= $ FOR THE MONTH$5.40 X 100 X 30= $16,200 budgeted for FOOD (for a 30 day month)

FOOD COST Calculations:

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¡Cost of paper supplies along with gloves and other PPE can be substantial (especially now!)

¡Chemicals are needed for cleaning, sanitizing¡Other items include reusable dishes, glassware, utensils,

aprons, pots and pans, etc.¡Using historical data to set budget is a good guide (may not

be applicable at this time due to COVID-19)¡Most operations will already have an established PPD based

on historical data.

Non- Food and Supplies to Consider

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¡Example:§Chemicals- monthly invoice total: $500.00§Paper goods- monthly invoice total: $300.00§Kitchen replacements each month: $300.00§TOTAL= $1100 per month§Divide $1100 by census and # days per month to determine PPD

§ Example: $1100/100=11, 11/30= $0.36 PPD

NON-FOOD COST Calculations:

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Monitoring

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¡Use a spend down spreadsheet or software§Log invoices as they arrive§Review expenses and $ that remain for the month§Estimate how much you have to spend each week or on each order§Estimate standard bread and milk delivery costs (if using separate

vendors for this)§Example: $16,200 divided by 8 deliveries per month= $2025, try to

limit spending to this amount at each order §Note any discrepancies with charges, review invoice§Be diligent in making sure credits are received§Don’t forget to include small vendors and trips to the grocery store

Inspect What You Expect!

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Spend Down ExampleHappy Home January Days in Month: 31 Anticipated Census = 155

Date Vendor Invoice # Invoice Total Food Supplement Supplies Kitchen Replacements

Other Date Census Date Meal Sales

1/3 Bimbo 5.13652E+13 113.87 113.87 1/1 155 1/1 $92.00 1/3 Gordon Foods 199633821 881.81 881.81 1/2 156 1/2 $204.00 1/3 Gordon Foods 199633822 158.40 158.40 1/3 156 1/3 $74.00 1/3 Gordon Foods 199633818 4,097.24 4,097.24 1/4 155 1/4 $25.00 1/3 Gordon Foods 13840611 32.96 32.96 1/5 155 1/5 $44.00 1/6 Gordon Foods 199687415 2,667.30 2,667.30 1/6 153 1/6 $84.00 1/6 Gordon Foods 199687412 61.60 61.60 1/7 153 1/7 $76.00 1/6 Gordon Foods 199687404 369.26 369.26 1/8 153 1/8 $112.00 1/3 Walmart 42.03 42.03 1/9 151 1/9 $194.00 1/7 Gordon Foods 199719151 1,572.66 1,572.66 1/10 151 1/10 $155.00 1/7 Gordon Foods 199717160 44.66 44.66 1/11 149 1/11 $40.00

1/10 Bimbo 51365622625 110.62 110.62 1/12 149 1/12 $32.00 1/10 Gordon Foods 199811692 45.46 45.46 1/13 148 1/13 $74.00

0.00 Non - Resident Food Re-Allocation:41,479.34 Total Food 33,884.34

Total Expenses 33,884.34 4,245.95 3,349.05 0.00 0.00

Beginning Balance Based On Anticipated Census 35,557.00 2,642.75 2,883.00 0.00 EMPLOYEE EVENTS

Remaining Balance Based On Anticipated Census 1,672.66 -1,603.20 -466.05 0.00

Actual PPD Costs 7.31 0.92 0.72 0.00 ACTIVITIES

PPD Budget 7.40 0.55 0.60 0.00

MEAL SALES 2,874.00

TOTAL FOOD RE-ALLOCATION 2,874.00

DIETARY SUPPLIES 3,349.05 RESIDENT NET FOOD COST 31,010.34KITCHEN REPLACEMENTS 0.00 SUPPLEMENT COST 4,245.95

COMBINED SUPPLIES & REPLACEMENTS $ 3,349.05 COMBINED FOOD & SUPPLEMENT COST 35,256.29

COMBINED PPD 0.72 COMBINED FOOD & SUPPLEMENT PPD 7.60

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Monthly Raw Food Plan (example)

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¡Many facilities sell meals to staff and guests¡Cost for purchasing food for these meals can be substantial¡Some can yield a profit, some barely cover food cost ¡Revenue generated should be accounted for and credited

back to food (and supply) cost¡May not be credited back to food cost directly, but should be

noted on the spend down ¡For some departments, this is an essential business (most

hospitals)¡For other it’s more of a “perk” for employees and guests

(mostly long term care)

Revenue (Perk or Profit?)

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¡Have you met budget? WHY NOT?¡Considerations:

§Take inventory with each order§Portions sizes (using the correct scoop?)§Recipes (followed?)§Substitutions (items were not available)§Food preferences (disliked item causing additional meals to be

prepared)§Leftovers- too much prepared (cooking full case when not needed)§Steamtable waste and plate waste§Perhaps menu changes are necessary (change high cost to low cost

items)§Theft- Do you know what’s going in and out?

Evaluation

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¡Example 1§A 4oz portion of product X costs $.55 per portion§ If a 6oz portion (heaping scoop size) is served, the cost would = $.825§ If your census is 100:

§ 100 x .55= $55.00§ 100 x .825= $82.50§ This equates to $27.00 more spent each day§ If done for 30 days= $810.00/ month over budget

Portion Control

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Portion Sizes

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¡Following recipes is very important§Allows for a consistent product§Consistent food cost if followed§Scratch cooking can decrease food cost, however, may increase labor§Scratch cooking often improves taste and acceptance, especially in

healthcare settings§Restaurants set themselves apart with their “secret recipes”,

“homemade” products§Management should determine if labor costs justify scratch cooking§Modified scratch cooking is often done

Recipes

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PRO CON

Decreased food cost (most of the time!) Increased labor needs

Homemade taste Inconsistent taste if recipes are not followed

Improved customer satisfaction Decreased customer satisfaction if inconsistent

Ability to limit salt and fats – add herbs and other ingredients to improve flavor and nutritional value

Prepared items often high in sodium and fat

Standardized recipes may be modified to meet preferences of the customer base

Product does not change

Utilize chef skills- employee satisfaction Skilled labor is needed and training

Pros and Cons of Scratch Cooking

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Three Bean SaladScratch, Speed Scratch, RTS

$0.15 $0.21 $0.24

These prices reflect the food cost only of 3 bean salad. Scratch is making the salad from dried garbanzo and kidney beans, canned green beans, and making the dressing. Speed scratch is using all canned beans and making the dressing. RTS is a canned, ready to serve salad. If making 100 servings, that would be 15.00 for scratch and 24.00 for RTS, a difference of $9.00. If it takes one hour of one person’s time to make the Three Bean Salad from scratch, then we have hit the break even point. It’s costing the same as the RTS salad.

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Scratch vs. Prepared: 3 BEAN SALAD

Consider Cost of Product and Cost of LaborThree Bean Salad

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Scratch vs. Prepared: BISCUITS

Consider Cost of Product and Cost of LaborBiscuit

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Scratch vs. Prepared: PANCAKES

Consider Cost of Product and Cost of LaborPancake

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© 2020 Association of Nutrition & Foodservice ProfessionalsGORDON FOOD SERVICE Training 25

High Cost / Low Cost

•Pie / Gelatin•Cream Pie / Pudding Pie

•Salmon / Cod•Beef Mexican Skillet / Meatloaf•Shrimp Basket / Tuna Noodle •Spinach Salad / Side Salad•Asparagus / Green Beans

Are You Getting the “BANG for YOUR BUCK?”

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¡Join a GPO (Group Purchasing Organization)§Make sure you know your contracted items§Provides assistance with choosing the best products §Provides rebates§Group pricing (like a Sam’s Club or Costco)§Savings on other items: medical supplies, supplements, chemicals

Strategies and Tips:

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¡Work with your RD to Liberalize Diets§Very important in Long Term Care and Senior Living§Will improve customer satisfaction§Allow for seasoning foods to improve taste (doesn’t have to be salt!)§Decrease waste and call backs for alternative meals§ Increase customer choice:

§ Look at select menus§ Restaurant style dining


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¡Audit Supplements and Snacks§Work with your Registered Dietitian to determine if supplements are

still needed§Make rounds during snack times, observe what is thrown out or

uneaten§Talk to customers, determine preferences§Review intake logs and weights§ Ideally, review monthly or even quarterly at a minimum§Determine if too many snacks/supplements are cause of poor meal

intake.§Do not give supplements with meals


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¡Work with your Food Vendor to learn about new products and ideas§Attend Food Shows to learn about new/different products§Meet with your Rep to discuss menu concerns and provide feedback§Schedule menu planning days with your Representative§Attend educational sessions provided by vendors for free§Ask about their software that may be available to assist with your

managing food cost


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¡Develop a good relationship with your customers§Have menu meetings to determine preferences§ Include your chefs, supervisors, cooks to attend meetings§ Include the customer in taste tests if possible§Make rounds, visit the customer, ask questions§Have staff make rounds too!§Encourage the Chef or Cook to visit customers in the dining room

when they are enjoying the meal§Send out surveys or questionnaires


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¡Production Counts Matter!!§Provide staff with a good count§Train staff to follow production counts§Cook only the amount required§Avoid leftovers unless this is your intent§Purchase only what you need§Avoid over purchasing (ie purchasing a case of soy sauce when only 1

cup is needed for a recipe)§Avoid cooking the whole case when only half may be needed§Look at other options if you don’t need a 10# roast, are there smaller

sizes or other options? (ie cooking 5 pork chops instead of a 10# roast)


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¡AGAIN, Menus Matter!!§Plan meals wisely§Offer choices customers will like§Offer popular items as the main meal (not the alternative)§Decide if convenience items are appropriate§Offer a variety, unpopular items may need to be an alternative (ie

brussel sprouts, liver)§Calculate menu costs for standard portion sizes§Provide correct portions when serving§Use a waste logbook to to track waste (see examples)


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Waste Logbook (example)

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Waste Logbook- directions

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Plate Waste Log (example)

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Lasting Thoughts…

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Lasting Thoughts…

¡“Sharing food with another human being is an intimate act that should not be indulged in lightly.” ― M.F.K. Fisher

¡“Good food is very often, even most often, simple food.” ― Anthony Bourdain, Kitchen Confidential: Adventures in the Culinary Underbelly

¡“A good cook is like a sorceress who dispenses happiness.” ― Elsa Schiaparelli

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Questions??????

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https://www.goodreads.com/work/quotes/4219

Take Control of Budgets

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