Managing Kitchen Food Costs

Chef and business consultant Andrew Briese talks with Ken Burgin about cost reduction strategies in restaurants, how to calculate food waste in restaurants, and how to improve productivity. Andrew is the founder of Cooking the Books, a popular kitchen management and restaurant food cost software system. Listen to the full conversation in the video below – here are some highlights from our discussion about controlling costs in a restaurant.

 

 

How to manage food ordering, stock levels and stocktake.

"It's all about consistency. I think consistency and compliance play a huge role in food production. And I think a lot of the time consistency and kitchens don't hang out together enough."

"Let's start with the purchasing system. You should be ordering to minimise your waste and obviously to maintain your profitability. In my last head chef job, when I started, they had a food cost of around 70% and a labour bill of about 70%. So they were losing money, not making money. Overnight you can lower that by buying the right products. And this was a really big one in that job I was just talking about. They were buying the wrong product at the wrong price for the wrong job."

"Let's take mushroom sauce as an example. They were making about 100 litres of mushroom sauce a week. And they were buying the best mushrooms you've ever seen - I've never seen better. Perfectly white, perfectly round, all the same size, and someone was slicing them every day and making a mushroom sauce. My approach to this is 'product for purpose'. When you're buying the product, what's the purpose and are the customers going to see it in their original state? Start by talking to your suppliers; they know what's available. When you build a good and respectful relationship with them, all sorts of good deals will become available. We changed to buying second-grade mushrooms, they're a bit older, have more flavour and make a better sauce. Plus they were much cheaper."

 

How often should you do a stocktake?

"We recommend doing a stocktake not monthly, but every four weeks – 13 per year. That way you're comparing periods against each other with the same number of days. Do the first stocktake on a Monday at 6:00 am. The first week I can buy up big; the second week, I can buy, don't really care; the third week I start tightening my belt; but then the fourth week it's almost like a famine, with very minimal purchasing allowed.

What I'm trying to do is instead of the staff going into the dry store and getting another bottle of sweet chilli sauce, they can use the 17 they've already opened. I'm trying to rotate the stock and use it up so when I count the stock on that next Monday morning; I'm calculating a small amount. Now, my last job was at a big hotel group. We would count no more than $5,000 worth of stock on that particular day. This system works but needs discipline. I might run out of a couple of things on the last Sunday night. But instead of just crossing it off the menu, write "sold out". So next time the customer comes in, they'll think, "Gosh, I'd better have that this time because they sold out of it last time."

 

Food storage improvements

"The biggest storage mistake is not rotating stock and not having a system. I highly recommend having tags on the cool room, on the shelves. So the calamari lives in the top right-hand corner, the eggplant in the far left-hand corner of shelf one. I did that was because it gets ingrained and it's about that consistent part where you know where to walk and get it from in the cool room. It's the same every single day. I know this can be boring for some chefs. We like to throw things around and play Tetris in the fridge now and again, especially at Christmas. But you want to make sure it's put in the right place. And if it's not there, that means we've got none left, so we've got to make more. A restaurant food storage chart, listing what you have and where, is also an excellent idea."

 

How to deal with food waste in restaurants

"There are two types of waste – the first one is skill waste. You've made a mistake, and you've had to throw it out. Johnny, the apprentice, burnt something or portioned it so it can't be used. The second type is unavoidable waste, eg you've got a pineapple; you take the head, the bottom, the skin, the core out. 55% of a pineapple ends up in the bin. That's unavoidable, but you've got to account for it when you're doing your yield calculations. Trimming steak into portions is another example – up to 40% might come off in fat and sinew. Think about why waste is occurring? . Is a lack of skill? Have you ordered too much? Do you have recipe cards? Is it the wrong production? Poor rotation of stock? They could all be factors, and show you ways to reduce food waste in restaurants."

 

What is a good food cost for a restaurant?

"Operators often ask for ideal food cost percentages, and what is the food cost in a restaurant? This is probably the number one question whenever I walk into a business, or someone rings me. People want to know the restaurant food cost percentage formula. I always say 30% because that's usually what everyone's trying to get. If you're under 30%, anywhere from 30% to 25%, you're doing extremely well. We're lucky enough to have a lot of clients around that figure. Under 25%, I start to worry about what you're giving the customer. I'd get nervous around those numbers under 25%. Between 30% and 35%, I could probably pick you're doing a couple of things wrong. One of them would over-portioning or making some bad decision on what you're buying. Over 35% I'm getting concerned. If it's between 35% to 39%, you're doing a lot of things wrong."

 

How do you decide whether to make or buy?

"You've got to look at the best financial decision for your business. as an example, many years ago, I talked with a caterer that made a lot of pesto. I talked to the chef and suggested getting this made by an external company. Give them the recipe, and let them quote for making it. They did that, and they came back with $20 a litre. The chef costed his at $18 a litre, which he felt proved that they should make it. The next week, an apprentice burnt 20 kilos of pine nuts at $50 a kilo. Now, what did I then say to the chef? "I told you so."

I'm not saying, chefs, buy it all in. I'm saying buy the items that you can't change. If someone else can do it, like a cake, if you're not set up to make the cake, buy it in. There are professionals out there; that's all they do. They'll make it every single time exactly the same."

 

What are the new skills that chefs need for 2021?

"What are the new skills that chefs need beyond chopping and cooking, managing the pass, workflow, ordering and rosters?

They've got to be able to use an iPad. I think an iPad's now more important than a knife. And I know I'm going to get hounded for that! The reason is, I can do nearly everything possible in a kitchen, I can run a kitchen with an iPad. So I think an iPad in a kitchen's an essential tool now, especially for your ordering, and recipe card management. The skill of just being able to cook is out of date; you also need to understand management. And a lot of owners need to put a little bit of time into this, give the chef time to manage their kitchen well."

 

TRANSCRIPT of Kitchen Food Cost Webinar

Ken Burgin:
Let me introduce Andrew Briese. He's our speaker today. He's a chef and he's a business consultant. I've known Andrew for a while. He's got a great sense of humour. He loves this industry and he really wants to make it more profitable and more successful and easier to run. And, I guess, kind of bring the joy back into it in a way too because people who are not making money or struggling with kitchens usually don't smile too much. Hey, Andrew. Great to have you.

Andrew Briese:
Hey, Ken. Thanks for having us.

Ken Burgin:
So what's the three minute Andrew story since you started cooking?

Andrew Briese:
I obviously did an apprenticeship many years ago. I'm a bit older now. Halfway through my apprenticeship I did a Bachelor of Business in hotel and catering. Back then computers were just sort of coming out and I liked the idea of numbers. I really like numbers is probably the main thing. I knew that I couldn't cook when I was getting older. So there was a way out of the kitchen but also having the skill behind me, I could use that. I developed Cooking the Books and it's developed over a number of years. But ten years ago I started Cooking the Books with one programmer. He now heads up our office over in Vietnam. We've got ten over there and we've got six here, sometimes in Melbourne when we're allowed to have people in our office. Got a big, giant office and no one in here at the moment.

Andrew Briese:
And then Cooking the Books, we've come from a recipe management tool to a kitchen management tool. We've got a whole lot of other little things. Hence the reason you've probably seen we've had a little bit of a name change. We used to be called Cooking The Books Enterprises, we're now CTB AND CO.

 

Ken Burgin:

So we're going from first deciding to order through to manufacturing, production and storage and usage and tracking numbers and all those sorts of things. So why don't we start at the beginning? Tell us a bit about some stuff about ordering, stock levels and stocktake. And what I'm going to do is I'm just going to have our faces... Mia, if you want to kind of hide everyone else? It'll just be Andrew and I at the minute. Well, let's have a look at this issue.

Andrew Briese:
I think the first thing that came across... when I got this slide with all the question, it comes down to one really important thing. It's all about consistency. And I think consistency plays a really big role in food. Food costing, food preparation, all those sorts of things. And I think a lot of the time consistency and kitchens don't hang out that much. I think you should do it a bit more than once in a while. Consistency's a major thing. And you've got compliance on top of that. So I think they're really important things for all the questions we're going to talk about today. So we can bring nearly every one of them back to consistency.

Ken Burgin:
Well, I know the customer's pretty annoying if there's something you really like and you go back to have it again and obviously, "Oh, a different chef tonight."


Andrew Briese: I want to talk about a purchasing system. What is the main goal you've got there? You're ordering to minimise your waste and obviously to maintain your profitability. Some of the jobs I've had over the years as a chef, my last head chef job I went and they had a food cost of around about 70% and a labour bill about 70 as well. So basically they weren't making any money. Overnight you can lower that by buying the right products. And this was a really big one in that job I was just talking about. They were buying the wrong product at a wrong price for the wrong job. So what are actually using it for?

Ken Burgin:
What's an example of what you're talking-

Andrew Briese:
What they did was they used mushroom sauce. They were making about 100 litres of mushroom sauce a week. And they were buying the best mushrooms you've ever seen. I've never seen better mushrooms than those. Perfectly white, perfectly round, all the same size. And I had someone slicing them all up every day and then making mushroom sauce out of them. Overnight I said, "No more." I think they were about $60, $70 a box. I said, "We're going to buy second mushrooms." We know what a second mushroom is, Ken. It's a bit like us. It's not quite right, a bit older.

Ken Burgin:
A little bit bruised.

Andrew Briese:
Bruises on it. So what we doing with that? We slice it all up and making mushroom sauce. Now, at the end of day, no one's seeing the mushrooms. They're all sliced up. So, to be honest, they're a better flavour, the second ones, as well. So you're actually making a better sauce for... I think it was about 900% cheaper than what they were. And you can all go into your kitchens and have a look at what you're buying. My new wording for all this is product for purpose. When you're buying the product, what's the purpose and are the customers going to see it in their original state? And that brings us back to talk to your suppliers about it. They're the ones that that go in and see it. Like here in Melbourne we've got a great, big veggie supplier over the road.

Andrew Briese:
And I went over there a few weeks ago just to have a look at avocados because they're very expensive at the moment. We had a number of customers ringing up about avocados. There are 4 different types of avocados you can buy. There's the really, really nice ones that have a price to match. And then there's the ones that don't look great but you can still use them for your guacamole and your smash and whatever else you're doing. It doesn't have to be the best product all the time. You can buy a cheaper alternative and still turn it into something really nice.

Ken Burgin:
So what's the skill needed to choose between the grade one and grade two mushroom? Or the grade two and the grade three avocado? Or something like that too, because-

Andrew Briese:
I really put it back on the... Look, the suppliers are really doing it tough at the moment. I'm lucky enough to have really good relationships. And they build over many years. When I first became a head chef, I still deal with a lot of those suppliers. And even when I was an apprentice. Suppliers I know... back when I started we used to yell and scream at them and treat them not great because there was always another one. But, if you build a relationship with a supplier, they're going to help you. They're there to make your business better as well because they want to be paid, all those sorts of things. So I talk to the supplier, sit down with them. They go the markets, they see all these things that are happening. They'll give you better deals.

Andrew Briese:
I can remember when I was a chef, my old executive chef used to yell and carry on to the supplier. We'd run out of seafood. He rings him up, no answer on a Sunday. So you've got to think about if you're good to them, because they're going to look after you. So I would regularly talk to the suppliers about this sort of stuff if I was you guys.

Ken Burgin:
Well, look, I might bring in Paul Tory from Foodbomb because we're talking avocados and he actually has some avocados on his slide. I'm just going to activate his video. Where is he? Yeah, there we are. Okay. And I might... Hey, Paul. Howdy. I'm just going to share our screen again and look at information. So you're from Foodbomb.

Paul Tory:
Foodbomb is an order management or procurement platform for the hospitality industry. We use primarily a marketplace to connect venues with suppliers. So currently we have about 150 suppliers on the platform and we have a service of 800 venues. So we give them a platform where they're able to come on. And with the example here of avocados, they can type in "avocados" and get a result from 10, 12 different fruit and veg suppliers also in their range. You can then type in "box" and fills with a search, type "premium", fills with a search further until you find the product you want. And what we've created is a competitive marketplace so that you can be assured you're always getting industry best price across the board.


Andrew Briese:
Being where we are in the world at the moment, stock levels are really important. You only want to buy what you need. I used to have a thing where we'd order only three times a week. I would probably change that now. And if you do need to order every day just to maintain a minimum stock level. And I don't really have a problem if you do run out of one or two things on a day. But because of the fact that you don't want to hold stock because if you do hold a lot of it, it's going off. My philosophy on food. You buy it in, it's starting to go off, you've got to rid of it as soon as you can. Stock levels I really keep to a bare minimum if you can.

Ken Burgin:
So what are saying a bare minimum? Is that one day or three days? Seven days?

Andrew Briese:
It depends on how often you get a delivery. And you want enough to make sure you can service the clientele. Remembering though, the numbers are down. It's not as busy as it used to be in most of the other states. In Victoria it's very, very hard. It's a bit up and down from what clients are saying. So they're really at a loss of what to hold. Look, try and keep it one all day or till you can order next from that particular supplier.

Ken Burgin:
Right. So there's a question there from Angela about recipe costing programme. Mia, if you'd like to drop the link in there? That's the offer that Andrew's got for his recipe costing system. But, Andrew, tell us about this whole stocktake thing. Because you talk to people in, say, large clubs where they've got a little more time on their hands. They'll say, "Yeah. We do monthly stocktake, the first of the month." And everyone else wants to change the subject, "We don't do stocktake." I mean, what's your thoughts? What's-

Andrew Briese:
There's people stuck in the olden days. Look, I can remember my bosses saying to me, "We don't deal with stocktake. It takes too long." Nowadays with the digital stuff out there, we can do an order... Sorry, a stocktake on an iPad in about an hour for most big venues.

Ken Burgin:
So are we stocktaking everything, including the salt and the spices? Or just the key things, or?

Andrew Briese:
I think everything's... Look, what you're trying to do with a stocktake is you're trying to get a food cost, establish an overall food cost. You're trying to control your stock, control your sales and see if there's wastage and pilfering and theft and those sorts of things. But it also gives you a point of on that day what you've got on hand, what's sitting on the shelf. Now, if you've got $25,000 worth of food sitting on the shelves on a Monday morning. That's a lot of money that could be redirected somewhere else. You could be invested in something, you could buy equipment instead of holding all that stock. And going back to my point before, you buy it, it's going off. So that's $25,000 worth of stock that will be going off. So I think it's really important.

Andrew Briese:
What we do recommend here at Cooking The Books is to do a stocktake not monthly, it's every four weeks. Now, it's 13 a year that means. But what I'm going to do is my stocktake on a Monday morning at 6:00. So then the first week I can buy up big; second week, I can buy, don't really care; third week I start tightening my belt; but then the fourth week it's like a famine. What I'm trying to do is instead of the staff going into the dry store and getting another bottle of sweet chilli sauce, they can use the 17 they've already opened and stored. All I'm trying to do is rotate that stock and use it up so when I count the stock on that Monday morning, I'm counting a small amount. Now, my last job was at a big hotel group. We would count no more than $5,000 worth of stock on that particular day.

Ken Burgin:
Okay. So the week four of famine and starvation is part of the strategy. I like that.

Andrew Briese:
Yeah. And, look, I might've run out of a couple of things on that Sunday night. But instead of just crossing it off the menu and saying, or just wiping off your board and saying, "No one can see it," write "sold out". So next time the customer comes in they'll think, "Geez, I better have that this time because they sold out of it last time." Put it back onto the customers to say, "Yeah, we've sold out. These were so busy or so popular

Ken Burgin:. So food storage, that's the next part. Everyone needs to get their refrigeration serviced and the maintenance people in now urgently before it gets hot and busy. But any other thoughts on storage? What are the mistakes you see that people make commonly?

Andrew Briese:
Look, probably the biggest mistakes is not rotating it and not having a system. One of the things that I always run out for when I was cooking is having tags on the cool room, on the shelves. So the calamari lived in the top right hand corner, the eggplant was in the far left hand corner of shelf one. The reason I did that was because it gets ingrained and it's about that consistent part where you know where to walk and get it from in the cool room. It's there every single day.

Andrew Briese:
I know it's boring for some chefs. We like to throw things up and play Tetris in a fridge every now and again, especially at Christmas. But you want to make sure it's put there. And if it's not there, we've got none so we've got to make it. The only time I used to yell and carry on was when I looked at the calamari, it's not there. I get them to get out two boxes of calamari, cut it up and crumb it. And then I find it somewhere else. We've now got four boxes. No one's going to use that. It's going to be wasted. So that's probably the biggest thing I see.

Ken Burgin:
I like the label thing. I'm remembering a chef I used to have in my café days and he said, "My cool room has to be like a boutique. Everything exactly..." And he had labels everywhere. And actually one person sort of decided it was all too much for them and they left. Thank God because they were the messy one.

Andrew Briese:
Yeah. Although there's a couple things out there. The Chinese takeaway containers for your portioning. Portion control's a really big one for this sort of stuff too. But the takeaway containers, there's a few issues with them nowadays that they are getting a bit expensive. There's some other products. We've got a few other products. If you go to our website there's a few products that we've got, Portion Pockets. We've also... before you probably mention it, Ken. We got a new product called Sticky Dates, which is our labelling system. It's a little thermo printer that prints the label from your iPhone and you print as many of that as you like. I think we've got a bit of a prize for that later on.

Ken Burgin:
Okay. So portion control. I mean, the thing with the Chinese plastic containers too is the little bits that break off. And people want to wash them and reuse them and gradually they're kind of... Yeah.

Andrew Briese:
If you're washing them it's against your food safety plan, which becomes an issue when the health and safety guys come in. They're about 18 cents now and plus the lids. So they're getting up there. The other thing too is they're on the planet for 250 years. I've become an environmentalist now that I'm not cooking too much. So I don't cook in anger anymore. So there's some other things. We've got some plastic bags we provide on our website as well. So there's lots of things to that. Décor containers, I know they're a bit expensive. But you can get them on special at-

Ken Burgin:
They're on special every now and again.

Andrew Briese:
Yeah. Really good, some good specials at Coles and Woollies as well. So have a look around for those as well.

Ken Burgin:
And Joshua's made a good point here about overcrowding of fridges was a big issue where he worked at one stage as well. And, I mean... Yeah, if you haven't got enough refrigeration that's what happens.

Andrew Briese:
Yeah. Look, that seems to be a big problem with all the great architects out there. The last thing they think about is the kitchen. They're all about the space outside for the people. But we do need fridges and stuff. Look, you can portion it up as much as you can, that way the containers are easier to move around in your fridge. But I know those get tough.

Ken Burgin:
Mark's got a question about what's your opinion about the underutilisation of vacuum packers. Vacuum packing, is that a solution?

Andrew Briese:
Yeah, I think so. We used to vacuum pack a number of things. I used to get it done by the butcher. We sold rib eye. And every now and again we'd sell 50 or so a night but then we couldn't sell any for a few days. So we got them individually cryo-vacced. And that way, when we got an order, we'd just open the pack. We didn't have to pre-open a whole lot. So I think that's another way to look at it as well. Especially nowadays with some of the cheaper options out there that will only last a couple days, which is-

Ken Burgin:
But I think picking up on Mark's point too. There's still people scared of them, or they just haven't got the bench space for them? Or what?

Andrew Briese:
They're big, cumbersome things. So that might be one of the issues. But there's a lot of little ones that are coming on the market. They're more domestic but they still do the job.

Ken Burgin:
Interesting. Yeah. Well, a little domestic one's a good way to experiment. And if you find it's a cracker, then you can invest in something more. Okay. I always say you've got three valuables things in the kitchen. In a restaurant you got cash, food, and alcohol. All of which have poor controls and all of value. So theft and waste. I mean, they are different issues. But what are your thoughts on controlling that sort of thing?

Andrew Briese:
Waste is an important one. Back when I first started I thought, "If I throw it out. Okay, it's going to increase my food cost. I've got to wear it. It's my lack of skill. I should've used it up." But there's two types of waste that I see. There's skill waste. You've made a mistake and you've had to throw it out. Little Johnny's burnt something or the apprentice or something like that. Or there's the inevitable waste where you've got a pineapple, you take the head, the bottom, the skin, the core out. 55% of a pineapple ends up in the bin. So that's unavoidable but you've got to account for it when you're doing your yield sort of stuff. But sort of things you've got to think about with the waste is why is it occurring? Is a lack of skill? Have you ordered too much? Do you have recipe cards? Is it the wrong production? Poor rotation of stock? Those sorts of things. So you've got to look at those.

Andrew Briese:
What I would do to stop, or to help you stop waste, you've got to look at... put a chart together. And we can when we send some stuff out tomorrow, or we can send some stuff out. Get a chart, you want to know who's involved, what's actually being lost. Is it a valuable item? If it's something that's not a great deal of cost, it might be as important as the pine nuts that you've burnt or something like that. Where's the loss occurring? When is it occurring? How is it occurring? And why? It could be a training issue. One of the jobs that we did a little while ago for a client. Every Tuesday night they'd throw a whole lot out. And what was it? The chef on the Tuesday had Monday, Sunday, Monday off, came in and thought everything was off so he threw it all out. So it might be just a lack of knowledge or lack of skill.

Andrew Briese:
By using a chart you can see exactly what the problem is. You can then make the problem go away or fix the problem. One of the biggest mistakes chefs make is to yell at your staff if they burn or do something wrong. What happens then is they'll hide that. They'll put it in the bin. So you'll have a high food cost with no real reason. So what I do with that chart. You've got all your losses on there, all your wastage. I'd add it all up, put a figure next to it, put it underneath their rosters and show them the amount of money that we are actually throwing away. Don't yell, don't carry on about it but just show them. And when it goes down, make a big song and dance.

Ken Burgin:
Yeah. It's interesting you say that about waste sheets. I've seen them attempted to be used so many times but it's almost like a punishment thing. And people... they just ignore it most times or made up.

Andrew Briese:
Yeah, I wouldn't use it as a punishment tool. I know chefs might want to but... Yeah, I think you want to know what's going on. And that's the best way to find out what is being thrown out. And it might be you might have just an establishment that does waste a little bit of stuff because of the fact, especially-

Ken Burgin:
I'm just thinking there's a tool, an app, called iAuditor which I really like for systems. And for close up systems where you've got to photograph certain things and tick off items. And it's the sort of thing where exceptions like that could be photographed as well, couldn't they? That'd be another way around. Angela's just said, "Do you use these charts daily or weekly? Or what's the best way?"

Andrew Briese:
I'd be entering it daily because they'll forget.

Ken Burgin:
No one remembers what happened before. Yeah.

Andrew Briese:
One thing, we've got this employee books, we've got a waste section where they can grab their phone and type it in straightaway. It then pulls the data from the stock and you can get a value of it straightaway. So... Yeah, I would definitely do it daily. And even if I had to stop what I was doing and write it down, I'd do it as soon as you can. If you've got a calendar or your diary, if you've got a diary in the kitchen.

Ken Burgin:
Yeah, nice. Let's move on to talking about food cost percentages. One of those questions people say, "What should my food cost percentages be like?" They say, "What should my wage percentage be?" It's like, "Well, first of all, could we find out about what's the menu and what's the service style of these?" But it is a question you get thrown a lot. What should my food cost percentage be?

Andrew Briese:
Look, I do get this. This is probably the number one question whenever I walk in or someone rings me up. I always say 30 because that's traditionally what everyone's trying to get. If you're under 30, anywhere from 30 to 25, you're doing extremely well now. We're lucky enough to have a lot of clients around that figure. Under 25 I start to worry what you're actually giving the customer and is it-

Ken Burgin:
Flour and water.

Andrew Briese:
I'd get nervous around those numbers under 25. Unless there's a few that do get that because of the fact of what sort of restaurants they are. Between 30 and 35 I could probably pick you're doing a couple of things wrong. One of them would over portioning or making some bad decision on what you're buying there. Over 35 I'm getting a bit concerned. Under 35 to 39 you're doing a lot more things wrong. You're probably having some things go really wrong each time you're doing your stocktake or you're not counting it right. You could also have some really big problems with your stocktaking system. The numbers aren't updated properly, your costs aren't updated. So on your stock sheets it might be $3 but you're actually buying it for $7. So you're losing money straightaway.

Ken Burgin:
So you're identifying two things here. One is the counting system's faulty. So actually we still don't know what it actually is. What about if you got a high protein menu, seafood or steak or things like that?

Andrew Briese:
You've got also the sides and stuff that should balance it all out. And that's something you've got to look at. Are you a steak restaurant? Or are you selling just high priced items? And therefore it should reflect the selling price in that as well. So over 39, I'm yet to see this or be wrong on this, but I would put down that someone's stealing something.

Ken Burgin:
Okay. Interesting.

Andrew Briese:
Over 39. Realistically there's something going majorly wrong if it's over 39.

Ken Burgin:
So you're Cooking The Books system, that'll kind of flag this on an ongoing basis? Or is it once a week when we do the stocktake? Or how does it work?

Andrew Briese:
Cooking the Books is all about data. Look, it does some great things. It gives recipe costings and all those sorts of things, which we'll talk about later. But at the end of the day, I'm really about numbers now. And we look at the cold, hard facts of the data. What you're buying, what you're making, what you're selling it for, all those sorts of things. And you can't really trick it. If you're entering your invoices each day, you're recording... Sorry, receiving it properly. And that's another thing. If you're not receiving, if you're not watching the invoices when they're coming in, that can be a major issue in your cost percentages. So the data doesn't lie. So you can see all that.

Ken Burgin:
Yeah. Good point. One thing that's one of unintended consequences, a good consequence of this terrible situation the last few months, people are actually watching their numbers and being much more accurate because, if you want JobKeeper or if you want those BAS refunds, you actually have to prove your case and be ready to be audited. And people are... Yeah, the bookkeeping that's being done is fantastic.

Andrew Briese:
I must admit... Look, we've got some fantastic customers out there. But the last, probably eight weeks, has been mayhem here at Cooking The Books. Now people have got time to look at their stuff. We're the first one they're ringing, which is fantastic. We've picked up some really great customers lately. So it's been good.

Ken Burgin:
Interesting. Let's talk about the old question, make or buy? And from my days when we used to have a pastry chef in my café and the more we made, the more we sold. And it was pretty amazing stuff we made too. But then somebody'd come along and-

Andrew Briese:
Look, the thing with make or buy... Look, we've got 63 participants. I'm probably going to upset a few people now, especially the chefs out there. Remembering I am a chef at heart, there's always an argument with make or buy. You've got to take the emotion out of it because chefs are emotional beasts. We all want to make it and we all think we make it the best. We've got to teach our apprentices, the customer expects us to do it and it's going to ruin my integrity if I buy it in. I look at it a little bit different. Look, we've got an example that we'll send out later on of if you should make a cake or buy a cake.

Ken Burgin:
Yeah, we're going to include that in the email that you'll all be getting tomorrow. Yeah.

Andrew Briese:
But what you've got to really look at is what is the best financial decision for my business? I'll give you a quick example. I did many years ago, I went with an outside caterer and they did a lot of pesto. I went to the chef and said, "Look, I think we should get this made from a buyer in our company. Give me the recipe, I'll get a confidentiality agreement and let them make it." Anyhow, went there, did that and they came back with about, let's just say, $20 a litre. I then asked the chef to cost it out and he was $18. And he said, "Look, I told you so. It's better us making it." And that included... you've got to include the labour component there, which he did. Sure enough that week little Johnny burnt 200 kilos of pine nuts at $50 a kilo. Now, what did I then say to the chef? "I told you so."

Andrew Briese:
First, the cost of those pine nuts is directly related to his food cost. If the company that he got it made from burnt them, they wear it. So you've got to really look at what do you do really well in-house? Can it be consistent? Now I mean consistent, not today and tomorrow when you're there. Thursday, Friday, Saturday-

Ken Burgin:
Coming back to that thing that you started talking about right at the beginning. Yeah.

Andrew Briese:
Can you consistently do it? Another one that we used to do at the last place I worked at, we made chicken parmas. Now, chicken parma, you can buy the hearts in there, really easy to get, couple bucks. I made it for $2,10. Sorry, $2,20. It's about 20 cents dearer for us to make it in the building. But I did that because everyone around... it was Brighton, a very posh suburb in Melbourne. Everyone around us bought the hearts in, the pre-made stuff. When I made them, they sold out. Because, one, I knew what crumb I was putting on, I knew what chicken it was, I knew that it looked a little bit funny shaped but I could get the size I wanted as well. And I could reflect that in the selling price as well.

Andrew Briese:
So I'm not saying, chefs, buy it all in. I'm saying buy the ones that you can't change. If someone else can do it, like a cake, if you're not set up to make the cake, buy it in. There's professionals out there, that's all they do. They'll make it every single time exactly.

Ken Burgin:
So I might go to them with my recipe also you're saying?

Andrew Briese:
Yeah. Especially in Sydney and Melbourne, and Brisbane for that matter, lots of companies out there that'll help take your recipe and do it for you.

Ken Burgin:
You got a question here from Angela. When costing, being a new startup, what advice do you give in relation to working out the cost per recipe? Specifics like using vegetable, do you dummy test every recipe, cut and wave ingredient to fine tuning costs?

Andrew Briese:
Yes, Angela.

Ken Burgin:
Okay. So, Angela, my tip. Please, I beg you. One piece of equipment that you're going to use forever is costing scales. And they're pretty cheap, like lots of electronic equipment, the price keeps falling these days. You know how you go into the deli and they put the three rashers of bacon on and it's always more than you think? And they put the price per kilo in and it tells you. That's exactly what you need. So this way... I mean, chefs obviously got to use them a lot. But you as the owner, you can see the actual cost of the seafood in that seafood pasta, that those burgers are being made to exactly 200 grammes, that sort of thing. I think that's a pretty useful tool, especially for a startup. Anyway, that's my beef, Andrew. But you're the expert.

Andrew Briese:
Digital set of scales is a must. You've got to have a digital set of scales. And then that comes down to your portion control too. Angela, one of the things when you startup, I would be going into the kitchen regularly, grabbing a digital set of scales and weighing some things that they've cut or portioned just to make sure they're all... that consistent part again.

Ken Burgin:
Yeah. Just interesting for business owners. I mean, you're not wanting to be a pain in the butt and hanging around the kitchen, getting in the way. But I think sometimes people are a little bit scared about going into that stainless steel and tile place with slippery floors and all the rest. But we need to watch and learn a bit more.

Andrew Briese:
And those knives too, Ken.

Ken Burgin:
Yeah. Okay. Recipes and menu costing. What I might do, Andrew, is just... you've given us some examples of some recipe cards. So I'm going to pull those up. And so we can have a look at what you got here. So what you've given me, you've given me recipe card for calamari and chips, you've given me one for the lemon aioli and then you've brought it all together. So why don't you just talk us through what-

Andrew Briese:
So this is a recipe cost sheet. At Cooking The Books we don't do it together. One, because there's different information on both of them. So this is what I could call a recipe cost sheet. It talks about the numbers behind the dish. So in here you can see the number of portions, the portion size at the end of it, every ingredient costed out per gram, litre, whatever it is. And then you go to your total cost, divide that by your number of portions to get a portion cost. You then have your food cost percentage, or GP. Obviously your food cost percentage and your GP, so the money you've got left. You've got a little bit of labour in here. One of the things that we love talking about is the labour component. To look at-

Ken Burgin:
So that's the bottom left hand corner down there? Yeah.

Andrew Briese:
And the one I look at more than anything now is that food cost with labour percentage. If that's under-

Ken Burgin:
Right. So that's the one in the bottom, in the middle. Okay. Yeah.

Andrew Briese:
That's probably the most important one on this first page. And not a lot of systems will do that, a lot of the tapes don't look at this either.

Ken Burgin:
Well, that gives you the accurate to do that make or buy decision, doesn't it as well?

Andrew Briese:
Yeah. And that's what this is all about. Costing it out and making sure you're making some money out of it. This should be done for every single recipe on your menu. What does that really mean? The next one's the aioli, which is going into the calamari and chips. So it's a side of that. Your side salad, if you're making that, I do that as a recipe. Your salt and pepper mix that you're putting onto it, I do that as a recipe. So everything becomes a recipe. That way when you do another recipe with salt and pepper or the aioli, you've got the recipe to put into it as well. Look, there's a lot of work for this. And that's why chefs don't like doing them. Nowadays I can do a recipe card in about five minutes now with the system we've created. But getting that information's probably the hardest part.

Ken Burgin:
Well, I think you raise an important point though. I mean, poor, old chef is kind of already working long hours. And then you say, "Sit down at the laptop, dry your hands." And, I mean, like most people, not that chefs... Well, a lot more chefs probably if they're youngies now, they know how to type a lot faster than probably a lot of others. But if you're a two finger typist, it's not fair. And that's where I think there's some admin help. The person in the office or whoever does the bookwork, give them that. A chef, just give us your handwritten recipes and let someone else turn this. Your chef will come back and check it. But to expect that kind of fiddly, manual labour. I don't think that's a good use of someone's time.

Andrew Briese:
So this is the actual one I call a recipe card. This highlights what's in it, how it's made, any sub ingredients in there. We've also got nutrition on this one as well. I know you're going to hate me but it's coming. We'll all have to have nutritional panels on every single menu soon.

Ken Burgin:
When is it coming? When do you think it'll come?

Andrew Briese:
Well, the U.K. announced that they're going to make it mandatory in a couple of years. I think that might be pushed back because of that little thing called COVID. But I could see it, realistically it's starting to happen or it's happened in QSRs, fast food stuff. are doing it as well. So it's just going to flow onto cafes, restaurants, pubs and clubs. It's inevitable.

Andrew Briese:
And I think to do that now would be virtually impossible. And the amount of hours you'd have to do, would take a lot. But what I'm doing with this is I'm trying to get a consistent product by someone making it. Don't care who it is. The other thing that you need to look at is the description in there. If I've got two kilos of onions, what does that actually mean? Does it mean two kilos of raw onions? Or two kilos of whole onions? I'd spell it out as much as you can. You remember, you're trying to create the same flavours, taste, consistency, fill it out as much as you can.

Ken Burgin:
Now, Angela's brought up a really good question which comes up a lot. What about wastage? Why haven't you included wastage in this?

Andrew Briese:
If you go back to the previous screen, we do have a wastage percentage in there.

Ken Burgin:
Where's that? Oh, that's the yellow column in the middle. Okay.

Andrew Briese:
So the wastage depends on what you're doing. Look, we've got some percentages in, like I said the pineapple, 55% of a pineapple. Some way waste depending on how they cut it. But wastage... Look, I would put that in there. Especially if you're cutting your own steaks, those sorts of things. You can also, a lot of our customers will put in a variance part in there as well. So they'll allow a 5% variance on the cost as well because of the fluctuations. But remembering we're capturing all this information as soon as invoice comes in. So we're updating these pretty regularly. We've got alarms to say if your recipe goes over a certain percentage, I'll let you know and those sorts of things as well. Good question though.

Ken Burgin:
I suppose my opinion around the wastage thing is too... I mean, wastage is going to flow through to. I mean, as soon as you say... you're sort of saying "allowable waste" it's almost like it's okay to waste 20%. What was the one you had? 20% there of lemons or something like that.

Andrew Briese:
I mean, 20% is saying out of that lemon you can only use 80% of it.

Ken Burgin:
Of the weight? Okay.

Andrew Briese:
A whole porterhouse, about 15% of it is fat. So you're going to have to weigh. You're not really going to use it.

Ken Burgin:
Okay. So we're talking about yield in there, aren't we? Okay. Right. Do a little bit of terminology, I guess. Okay. Anyway, good question. It's one that people often ask about. Yeah. Any other?

Andrew Briese:
The things with these too, Ken, is who should see them? That's a question I get asked a lot and everyone says, "Oh, just the chef." Out of 100 people, most of them wouldn't show... out of the chefs that we talk to pretty regularly, back in the old days no one had ever seen them. They'd be in the top corner of the office of the chef and they'd look at them and that's all… These should be dirty. They should have mess all over them because they're used, especially the one on the screen, the recipe card. Although, sorry, the recipe card should be seen. The cost sheet I'd show everyone in the kitchen because you want them to understand that it's not pine nuts, it's $50 a kilo pine nuts. So they take responsibility of the products that they're using. So I often let everyone see them. Even suppliers, I often show them the cost sheet to try and help me get a cost down.

Ken Burgin:
Yeah. Now a couple of more good questions here. One from... Kate's asked about does your system speak to Xero bookkeeping?

Andrew Briese:
I'm becoming a salesman now. Yeah, we link with everything.

Ken Burgin:
Kate, I'll get you to contact Andrew afterwards. That's a good question. I think there's plenty of integration.

Ken Burgin:
Yeah. One from Justin asking about for your squid, how do you cost in the frying oil? What sort of percentage of... is there a weight percentage? A rule of thumb or something?

Andrew Briese:
Look, Adam Galway who was at Redcape in Sydney. He's a good executive chef there. We did a thing, he's now working for me now. We did a thing after he left on oil. What we did was we worked out how many fryers we had, how much oil was going into them each week, and then we divided that by the number of meals we did for the week at a cost per dish and then we put that in.

Ken Burgin:
And what was the figure?

Andrew Briese:
It was about 2 cents. Realistically it didn't mean a lot over all the recipes-

Ken Burgin:
But there's the cost of the oil when you have to tip the whole lot out too?

Andrew Briese:
Yeah. Look, it depends on how many deep fryers you got. If you've got over four deep fryers, you're really not necessarily throwing it out all the time. You're always heating it up all the time.    If you look after it... Look, oil's a really important one. I had an oil register where I'd write down what we did to each of the deep fryers every day. So I knew exactly what was going on with them.

Sure. Okay. I might just grab a couple more questions here. One from Joe, a small café with only cooks, not chefs. So how do you factor in the cost of these coatings? I think of maybe costings, Joe, is it? I think Joe's question is about there's a lot of work, a lot of fiddle with all of this. At what point or what size is it worth actually diving into recipe costing?

Andrew Briese:
Every one of my clients is going to get through COVID and reason I believe that majority of the places that get through, they understand the cost associated with their dish. So I think it's a must. If it's my money that I've invested in a café. I don't care how much I turnover, I want to make money out of it. And that's the best way to do that is have recipe costing.

Ken Burgin:
Well, it might be a spreadsheet or it might be a system like this or something like that. But-

Andrew Briese:
You can do it on Excel. Look, if you're turning over anywhere over $12,000 a week in good, I think you need a system that can be robust enough to do all this sort of stuff in. And there's lots of ways you can manipulate that to fine tune who you're paying to do,

Ken Burgin:
Yeah. Okay. Interesting. Question from Angela is a good one. Do a master recipe cost across multiple suppliers and work out the best option. So your system has a feed from one supplier per ingredient. Is that the idea? Or how does it work?

Andrew Briese:
We can link supplies to a product and therefore you can then choose the best cost. We don't update from the supplier, we don't talk to the suppliers. Back when we started doing this we wanted to try and help the chefs more than anything. We do a lot more with the suppliers now because of where the economy's at. So some things, we'll look at updating pricing and that sort of stuff.

Ken Burgin:
Okay. I think one of the themes that you're putting here though is like we're keeping constant attention on this. So this is real money. So we're watching. And the same as the Foodbomb system, we're watching every day that the cost of things... we're doing that as well. Yeah. Question there about Foodbomb from Jamie. Maybe, Paul, you might like to dive in and answer that one? Question from Andrew, how long can chicken last in a vac seal bag?

Andrew Briese:
That's a really good question.

Ken Burgin:
Yeah, there you go. Presumably refrigerated, of course.

Andrew Briese:
It'd last a couple of weeks, I think. To be honest, I don't know. I wouldn't have a clue. I can find it out for you.

Ken Burgin:
Well, we're talking about shelf life of chicken presumably held at two degrees or something like that, aren't we?

Andrew Briese:
Maybe a couple of weeks.

Ken Burgin:
Okay. Interesting. All right. Jamie, that's a question you might like to drop under Andrew's website and send him a question about that specifically. Let's just talk about equipment. We've just got a few more minutes to go now. What's some equipment that you've seen people introduce that's really improved productivity, lowered waste, made the whole thing run more efficiently?

Andrew Briese:
I think there's a lot of peeling devices out there nowadays that are pretty cool to peel a lot of veggies. One thing we had last week is one of our big franchise stores asked if we could link in our recipes into the Rational Oven. So Rational have got a recipe database that you can program and it cooks that recipe. If we're costing it out and making the recipe in Cooking The Books, they want to be able to send it into the cloud, which I think is spectacular. I think it's something we're going to look at down the track as well. But you guys are probably the better ones to enter that sort of stuff.

Ken Burgin:
I walk by a local chicken shop in the morning and see two gigantic bags of peeled potatoes. What's the make or buy story there? You're saying we should be peeling spuds or are we buying them?

Andrew Briese:
It depends on how you're doing it. As an apprentice, every Wednesday I'd peel three bags of carrots and two bags of potatoes and a couple of pumpkins. Back then it's a bit different. But I think nowadays there's equipment out there. And as long as you can justify. One of the things, I did a café down the Great Ocean Road for seven years. And the first time we got there they had no deep fryer. When you think of beach and-

Ken Burgin:
And no chips. Oh my God.

Andrew Briese:
What I did in the first year, I bought a little desktop. A little bench top deep fryer. I nearly killed it a couple of times, had to take the tubes out so they weren't frozen when I put them in there. But that's the sort of thing, if you can justify the expense I would really look at it.

Ken Burgin:
Right. So we're talking return on investment, aren't we really here? And it's a very simple thing. You think, "Okay. How much more am I going to make a week or save a week?" We can usually quantify that. And how many weeks is it going to take to pay for this bit of equipment, which might be $500 or $5,000. And that's something I think is a great thing for chefs to be able to just roll out quickly. Because in my mind... and I know when I was a café owner, if someone came to me with a really proper proposal for something, my answer was yes if it meant we're going to save money or we're going to make money.

Ken Burgin:
Okay. Tell me about the new skills that chefs need beyond chopping and cooking and managing the pass and workflow and ordering and those things?

Andrew Briese:
They've got to be able to use an iPad. I think an iPad's more important now than a knife. And I know I'm going to get hounded for that. An iPad is more important than a knife. The reason being is I can do nearly everything possible in a kitchen, I can run a kitchen with an iPad. So I think an iPad in a kitchen's a really important tool now, especially for your ordering, your recipe card management. So I think the skills of just being able to cook are long gone now. I think you need the management side of it. And I think a lot of owners need to put a little bit of time, give the chef a little bit of time to do this sort of stuff as well, so. Saying an iPad, when we did an iPad thing. Years ago when it first came out. And I did it as a joke because I didn't think anyone'd use it. Now we got a lot of customers coming to me in meetings with iPads in hand.