Restaurant owners, chefs and managers must control food costs, and shrinkage can negatively impact profits. Shrinkage refers to inventory minus all reduction, such as deterioration, waste and theft. Astute food service professionals vigilantly monitor the true cost of the raw products used to produce their menu, knowing their success hinges on maintaining a menu cost between 25 and 35 percent above wholesale, reflecting the industry standard.
The "available portion" (AP) refers to the weight of the amount of food at the time of purchase. The "edible portion" (EP) denotes the portion of the food purchased that is edible. For example, you purchase a 12-ounce steak, but only 10.5 ounces of it is usable, after trimming the fat and gristle. The amount of inventory purchased that is actually usable is termed the "yield factor" and is always under 100 percent.
Calculate the yield, less all trim waste, by first weighing the amount of waste. Subtract the loss from the available portion weight to discover the yield weight. Divide the yield weight by the available portion weight to determine the yield percentage, which is always less than 100 percent. To determine the cost to produce a specific recipe, the edible portion is divided by the yield percentage to determine the amount of available product needed.
Shrinkage percentage includes trim loss and the difference between the precooked and the as-served weight. The cost per pound of cooked meats, such as prime rib, smoked brisket, ribs, roast beef and pulled pork, for example, will be much greater than the original purchase price. For example, a 2.75-pound fryer chicken has a common usable product weight of 97.4 percent, and a shrinkage of 2.6 percent. Prime rib-eye rolls have a usable product weight of 88.2 percent and a commonly shrink of 11.8 percent. Discover the common shrinkage percentage of typical foods by downloading a free food cost yield calculator at RestaurantOwner.com. (Users might need Microsoft Excel to use the tool.)
Produce items typically must be peeled or cored in the process of preparation, which causes shrinkage. Common shrinkage percentages for fruit include: 20 to 25 percent for peeled and cored apples; 30 percent for peeled bananas; 55 percent for peeled grapefruit; 18 percent for cherries; 40 percent for sectioned oranges; and between 10 and 55 percent for lemons and limes, according to Menu For Profit.
Common vegetable shrinkage percentages include: 30 to 35 percent for broccoli; 20 percent for small carrots; 25 percent for lettuce; 2 percent for garlic; and 20 percent for sweet potatoes.