Building a Better Menu

Whether you call it rationalizing, optimizing or reengineering, bringing an analytical perspective to foodservice is key to success.

Building a Better Menu

October 2023   minute read

By: Renee Pas

The mostly interchangeable terms “menu optimization” and “menu rationalization” have entered the nomenclature of convenience store operators looking to elevate their foodservice offerings. The basic concept: Use data and an analytical perspective to craft a menu that attracts customers, simplifies operations and preserves margins.

“We actually use the term ‘menu reengineer,’ said Howland Blackiston, principal at King-Casey, a company focused on menu operations that spans multiple operating segments.

“There are a lot of subtle variables, so we always start with clarifying what someone is talking about in regard to the menu,” Blackiston said. Examples of customers’ priorities include determining the right recipes for a menu item, considering if they have the right mix of menu items for their customer base and optimizing the menu board to draw in the greatest sales, as well as any kiosk or digital considerations.

Menu Maneuvers

Nina Berman, project lead at The Culinary Edge, says the work of building a better menu often means taking an existing menu and amending it to be both more operationally feasible and desirable from a consumer lens. “It comes down to how to create the ideal menu for your business and your customers,” she said. Sometimes that involves paring down a menu, but it could mean taking the opposite direction and elevating items. In the post-pandemic period, most operators continue to look for ways to trim labor, putting a priority on determining which menu items are the least labor intensive.

Another consideration: how an operator can add a menu item that signals more of a chef-driven offering, Berman said, like a California turkey club sandwich instead of a standard turkey sandwich. “Savvy c-store operators are looking at how to take basic items like that and evolve them,” she said. It is part of the continued push for many operators to move towards becoming a food establishment that also sells gasoline. In this approach, she added, “The food offering shines first, and menu becomes a more curated offering.” But it’s a balancing act: “From a c-store standpoint, there is also a transition to more executable food program,” she said.

Part of the push to get to the next level operationally is moving from a seat-of-the-pants approach to the menu to a more formal, analytical one. It’s the difference between thinking, “We should have a taco salad,” to researching if customers want a taco salad, analyzing if it makes sense financially and then carefully thinking through the execution. “A lot of people guestimate,” Blackiston said. “But a thoughtful brand conducts the research to find out.”

Berman looks at what to keep, what to optimize and what to retire when working through menu engineering tactics. She evaluates every item in detail. For example, can an operation cross-utilize an ingredient? Is it possible to use cilantro in three different dishes instead of using cilantro in one dish, and then different herbs for two other dishes? “We often scale things back both ingredient-wise and menu-wise. Huge, complex menus are not essential; people can even get decision fatigue,” she said. She stopped short of saying what the correct number of items is for a c-store menu lineup, saying it depends on the unique business, its investment and dedication to foodservice, and its customer base.

One starting point to menu simplification that Blackiston employs is to ask this key question: What is the least amount of items you can list to satisfy the majority of customers? “Say you have 30 things on menu,” Blackiston said, “What are the 18 that have to be there because they will satisfy 90% of customers?” The process progresses from an individual’s best guess to a research-based answer. The objective is to determine low-complexity items with high margins. These items are candidates to be promoted heavily or can serve as inspiration for other similar items.

Menu Reengineering in 4 Steps

King-Casey, a menu optimization firm, starts with the “as is” menu and concludes with an optimal “to be” menu. The company shared an abbreviated outline of the steps.

Step 1:

Menu Assessment

• Determine current menu strengths and weaknesses, item by item. Then, list key criteria and rate each menu item on these. Examples include sales, total food costs, price and margin contribution.

• Identify key opportunities relative to individual menu items. This could include determining what makes star products popular, how to cut costs on select items without sacrificing quality and how to rebrand high-profit, medium-selling items to increase revenue.

Step 2:

Menu and Operations Simplification

• Use consumer research and a mathematical process to statistically determine if the elimination of a menu item would have any negative impact in satisfying your customers (reach) and how often customers might use your brand if that item were eliminated (frequency). Streamlining your menu will speed up back-of-house menu item preparation time, reduce inventory levels and improve customer ease and speed of ordering.

• Research will enable the operator to use applicable scores to identify high-selling, low-complexity menu items, which should then become a priority focal point versus low-selling, high-complexity menu items (which should either be downplayed on the menu or eliminated). Reduce cost of goods by better understanding ingredient usage and reducing waste.

Step 3:

Create or Optimize Menu Strategy

• Review current menu strategy (assuming one exists). A proper menu strategy establishes clear and measurable business objectives for the reengineered menu (for example, growing the average check size), outlines tactics and identifies new menu items to develop and which to eliminate.

Step 4:

Menu Architecture

• Use the new menu strategy as a guide to reorganize key menu communication tools (mobile app, website, kiosk, menu board, etc.), keying in on the items you want to sell the most.

Competing Head-to-Head

Berman does believe c-store operators are ready to compete with traditional food businesses for their share of the foodservice segment. “There are definitely c-store operators taking a greater leap toward food,” she said, “and hiring the right culinary leaders to lead that program. People are willing to make the investment, but it’s important to realize the detail and challenge involved in running a food business. Food is a lot more complex than a traditional retail shop.”

Restaurant chains have been doing the work of menu optimization for years, Blackiston noted, along with the more dominant c-store foodservice leaders. In the last few years, however, he finds a larger swath of c-store operators integrating this kind of methodology into their operations.

“QSRs have got the lead; c-stores have a way to go,” Blackiston said. “But c-stores have made great progress in the last few years. The ones we are working with now, this is all new for them, but they are starting to grasp it and leverage it.” He advises c-stores with a foodservice brand to consider hiring from the restaurant sector as one way to sharpen their program.

Blackiston is so confident in the c-store sector’s ability that he believes the segment can not only equal but “surpass what restaurants are doing.” He guides c-stores to go after the foodservice business strategically, thoughtfully and scientifically. “C-stores still need to push themselves to think more like a restaurant if they really want to compete head-to-head with them.”

In all the analysis, don’t forget that success starts with a good product. “It has to be delicious,” Berman said. “The challenge is having the right chef team, and building the brand, and having it all be easy to execute,” she said. Historically, she explained, convenience food branding has been simple—most often the branding hinged on a plug-and-play food program.

What are the 18 [items] that have to be there because they will satisfy 90% of customers?”

Berman points to Kum & Go’s food program as one that is now on par with QSRs. The Culinary Edge worked with the brand to evaluate which parts of the country would support healthier food options in the c-store space and to create an innovative menu that is also simple for staff to execute.

Adding a bowls line was one way Kum & Go advanced its menu, with options such as Caribbean Pulled Pork made with pulled pork, chipotle mayo, lemon garlic vinaigrette, mango salsa, green onion, queso fresco and Takis; and the Brisket Taco made with pulled brisket, Lola’s hot sauce, jalapeno sauce, corn salsa, pickled red onion, green onion and corn chips.

The pulled brisket is also used in a sandwich and is part of a breakfast item as well, an example of how to cross-utilize an ingredient.

An increased commitment to optimizing foodservice can extend beyond the menu. There are other aspects of foodservice in which QSRs and fast-casual segments have greater expertise than most c-store operators today. Alex Sodek, chief research officer at TELUS Consumer Goods (formerly Decision Insight), which focuses on shopper insight data, suggests that operators should understand all the tools foodservice experts apply.

“There is a big difference in levels of foodservice c-store chains offer,” Sodek said. “At the end of the day, you have to decide how to create the environment you want and how to present it.”

Building Profits

In terms of menu assortment, Sodek routinely works with clients to increase their average ticket price. With one full-service dining client, that meant testing how the addition of a steak salad would impact sales. The answer? It drove up overall sales dollars in the lunch segment because it was a higher-priced salad. However, that same item on the dinner menu meant customers traded down. “Instead of ordering the more expensive steak dinner, they traded down to the less expensive steak salad,” he said. As convenience store operators evolve foodservice operations, they will also advance in using this kind of detailed user data set to become more astute operators. “Building an understanding of how to increase average ticket prices is important,” he said.

Sodek suggests that if c-store operators are not already looking at bundling opportunities, doing so is a great way to increase revenue. “Sell them more and trade them up. … C-stores already do that, but not always,” he said. Adding sweet potato fries to menus, which can include an extra $1 charge or more compared to regular fries, is one example.

Fountain drinks and bottled beverages are two specific c-store items Sodek pointed to as opportunities. Fountain drinks bring better margins, but bottled beverage bundling can be a “real win,” he said. “Look at the full lineup in the cold vault and consider how to allow the consumer to choose from any item they want there, then add a foodservice component.” That way, he explained, the c-store operator is starting with what likely led the consumer into the store and adding another item on top of that. For other foodservice operators, the beverage may be the add-on piece. At c-stores, it may be reversed.

“I would want to know why the person was in the store,” Sodek said. “Do they come in for a drink, then decide to get food? Or is it a true destination as a replacement for a QSR? The answer has a huge impact on how you market.”

Cracking the Code

When looking at menu reengineering, factor made-to-order into the equation. It’s not simply an important element, but instead is one that Nina Berman, project lead at The Culinary Edge, dubbed “table stakes for food at this point.” So many foodservice entities have cracked the code of making made-to-order items fast, she believes more consumers expect that as a standard option in any foodservice setting.

Another important approach is assessing where to subtract. This is an area Sodek worked on with a fast-food client. The project involved looking at the chain’s salad offering. There were three salads that dominated purchases, so the obvious conclusion was to eliminate the other salads on the menu and thus save ingredient costs and prep in the back of the house.

What happened, however, was not quite expected. Even though consumers mostly only purchased the three popular salads, trimming down the menu lineup gave the impression that the chain was not dedicated to offering salads. “Consumers wanted to see a fully developed salad line on the menu, even though they only ordered a few select items,” Sodek explained. To optimize the offering but retain a full, complete salad menu, the TELUS Consumer Goods team worked with the chain to create six salads that pulled from the same ingredient baseline. “We still reduced the back-of-house costs … but met the consumer wish for a larger selection of options,” he said.

That kind of thinking could help convenience stores at a time when many c-store operators struggle with how to promote healthier menus despite the fact that better-for-you items are not the biggest sellers, Sodek said. “Find a way to expand that while limiting back-of-the-house costs,” he advised. “You can grow the menu over time without losing money.”

Is it a true destination as a replacement for a QSR? The answer has a huge impact on how you market.”

Sometimes restaurant operators cut popular entrees because profit margins don’t work out, Sodek said. Understanding which items make the most financial sense means looking at units sold, how profitable each unit is and calculating in-house costs—steps that are some of the building blocks of menu management.

One option that may not make financial sense: value menus. “Be careful with that,” he said, “That’s a race to the bottom.” However, TELUS Consumer Goods research does show consumers are a little more price sensitive now than they were a year ago. “Think about how that fits within the c-store platform,” Sodek advised. “Is your offering a faster/cheaper alternative to a QSR?” Push to go one step further, he said, in order to outmatch other segments in the food game.

Renee Pas

Renee Pas

Renee Pas’ writing draws from both her c-store background and her more than 20 years writing about various retail channels. She can be reached at [email protected].

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