The menu engineering behind profitable banquet events

Introduction

In the highly competitive world of hospitality, banquet events are a cornerstone of revenue for hotels, conference centers, and catering companies. However, high volume does not always equate to high profit. Margins can be eroded by inefficient pricing, high food costs, and menus that fail to capture the full spending potential of a captive audience. This is where the strategic application of menu engineering for profitable banquets becomes not just an advantage, but a necessity. It is a methodical approach that moves beyond simple intuition and culinary creativity to apply rigorous data analysis, turning a standard menu into a meticulously crafted sales and marketing tool. By understanding the true profitability and popularity of each dish, you can make informed decisions that directly boost your bottom line.

This guide will walk you through the entire menu engineering process, from initial data collection to post-implementation analysis. We will explore how to calculate contribution margins, analyze sales mix data, and classify each item into one of four key categories: Stars, Plowhorses, Puzzles, and Dogs. We will measure success through tangible Key Performance Indicators (KPIs) such as an increase in the overall menu contribution margin by 5–15%, a reduction in food cost percentage by 2–4 points, and an improvement in the sales velocity of high-profit items. The methodology presented is designed to be a continuous cycle of analysis, strategy, implementation, and monitoring, ensuring your banquet offerings remain dynamic and maximally profitable.

Vision, values ​​and proposal

Focus on results and measurement

Our vision is to empower food and beverage professionals to operate with a data-first mindset. Menu engineering is not a one-time fix; It is a core business philosophy focused on continuous improvement and profit optimization. We adhere to the Pareto principle (the 80/20 rule), recognizing that a small subset of your menu items will likely generate the vast majority of your profit. Our approach is to identify and leverage these items while systematically improving or eliminating underperformers. This data-driven strategy is underpinned by uncompromising standards for quality and safety, including adherence to Hazard Analysis and Critical Control Points (HACCP) principles to ensure that profitability never comes at the expense of guest well-being.

• Data Integrity: Decisions are based on accurate, timely sales and cost data. We establish processes to ensure data from Point of Sale (POS) systems and inventory management are clean and reliable.
• Profit Optimization: The primary goal is to maximize the total contribution margin of the menu, not just to lower food cost percentage. We focus on the dollars earned per item sold.
• Guest Satisfaction: A profitable menu must also be a popular one. We balance financial goals with culinary creativity and guest preferences, ensuring that high-margin items are also highly desirable. The Net Promoter Score (NPS) of banquet clients serves as a critical balancing metric.
• Operational Efficiency: Menu design should consider kitchen workflow, ingredient cross-utilization, and speed of service, especially for large-scale events. A well-engineered menu reduces complexity and waste.

Services, profiles and performance

Portfolio and professional profiles

A successful menu engineering initiative requires a specific set of services and a cross-functional team. Managed internally or with external consultants, these components are either crucial for achieving profitable banquets. The services offered include a comprehensive menu analysis, strategic pricing workshops, menu layout and design consultation, and staff training programs focused on suggestive selling. This requires collaboration between key professionals: an F&B Analyst to manage the data, an Executive Chef to control costs and innovate recipes, a Graphic Designer to implement psychological design principles, and a Banquet Sales Manager to communicate the value of new packages to clients.

Operational process

1. Phase 1: Data Collection & Validation (1-2 weeks): Gather 6-12 months of sales data from the POS system, all standardized recipes, and current ingredient cost sheets. KPI: Data accuracy validated at >98%.
2. Phase 2: Item Analysis (1 week): Calculate the food cost and contribution margin for every single menu item. Analyze the sales mix to determine the popularity of each item. KPI: Completion of full menu costing with a cost deviation of <3%.
3. Phase 3: Matrix Classification (1 day): Plot each item on the menu engineering matrix (Profitability vs. Popularity) to classify it as a Star, Plowhorse, Puzzle, or Dog. KPI: 100% of items classified.
4. Phase 4: Strategy & Redesign Workshop (2 days): A collaborative session with the key team to decide on specific actions for each item (e.g., promote Stars, re-price Plowhorses, re-plate Puzzles, eliminate Dogs). KPI: Action plan approved by all stakeholders.
5. Phase 5: Implementation & Training (2-3 weeks): Redesign the physical and digital menus. The Chef finalizes any recipe adjustments. The sales and service teams are trained on the new menu and upselling techniques. KPI: 95% of staff pass a menu knowledge test.
6. Phase 6: Performance Monitoring (Ongoing): Track sales mix and profitability for at least 90 days post-launch. Generate monthly reports to compare performance against benchmarks. KPI: Monthly performance review completed by the 5th business day.

Tables and examples

Representation, campaigns and/or production

Professional development and management

The successful production and rollout of an engineered menu is a complex logistical exercise. It extends beyond the kitchen to involve procurement, sales, and service staff. Once the strategic decisions are made, a detailed execution plan is paramount. This involves confirming supplier capabilities to handle increased demand for “Star” item ingredients, potentially renegotiating prices based on higher volume. The kitchen workflow may need to be redesigned to accommodate new or modified dishes, ensuring that plating times for large banquets are not adversely affected. A clear production calendar should be established, with deadlines for menu printing, POS system updates, and staff training sessions. Contingency planning is also crucial; for every key ingredient, an alternative should be identified in case of supply chain disruptions.

• Supplier Verification: Confirm that suppliers for newly promoted “Star” or “Puzzle” items can meet increased demand without compromising quality or price. Secure secondary suppliers as a backup.
• Standard Operating Procedures (SOPs): Update or create new SOPs for all modified or new recipes. This includes detailed plating guides with photos to ensure consistency across all events.
• Inventory & POS Update: All new items, prices, and recipes must be accurately programmed into the inventory management and POS systems before the launch date. Run tests to ensure orders fire correctly to the kitchen.
• Sales Team Briefing: The sales and event planning teams must be thoroughly briefed on the new menu structure, package pricing, and the key selling points of featured items. They are the frontline for implementing the strategy.
• Front-of-House Training: Conduct a full menu tasting and training session for all banquet captains and servers. Focus on ingredients, flavor profiles, and the specific items they should be suggestively selling.
• Launch Plan: Set a firm “go-live” date. Plan for extra management presence during the first few events with the new menu to troubleshoot any issues in real-time.

Content and/or media that converts

Messages, formats and conversions

In menu engineering, the menu itself is the primary marketing content. Its design and language are powerful tools for influencing customer choice and driving sales of high-profit items. This goes beyond simple aesthetics; it involves the application of proven psychological principles. For instance, the “golden triangle” refers to the area of ​​the menu our eyes are drawn to first—typically the middle, then the top right, then the top left. Placing your “Stars” in these locations can increase their sales by up to 25%. The use of vivid, descriptive language (“fall-off-the-bone slow-braised short rib” versus “braised short rib”) can make an item more appealing and justify a higher price point. Another effective technique is the use of “decoys”—a very expensive item placed near a high-profit item you want to sell, making the target item seem reasonably priced in comparison. The ultimate goal of our content strategy within menu engineering for profitable banquets is to convert guest attention into high-margin sales.

1. Strategic Item Placement: Analyze the current menu layout. Identify the prime real estate (the golden triangle) and reposition your “Star” items there. Isolate them from other items using boxes or graphics to draw more attention.
2. Draft Compelling Descriptions: Rewrite the descriptions for your “Stars” and “Puzzles.” Use sensory words, mention the origin of ingredients (e.g., “local farm tomatoes”), or describe the cooking method. Keep descriptions for “Plowhorses” and “Dogs” simple and short.
3. Pricing Psychology: Remove dollar signs ($) from prices, as they can trigger a pain response in customers. List prices as standalone numbers (e.g., 42 instead of $42.00). Avoid listing prices in a single column, which encourages price shopping; instead, embed the price at the end of the description.
4. Graphic Design and Layout: Work with a graphic designer to create a clean, easy-to-read menu. Use high-quality fonts and paper. Use photos sparingly and only for your highest-profit items, as a good photo can increase an item’s sales significantly.
5. A/B Testing: For digital menus or special event packages, create two versions of a menu page with a single variation (e.g., one with a photo of the “Star” salmon dish, one without). Track the sales mix of the salmon for each version to get quantitative data on what works best.
6. Finalize and Distribute: Once the design is finalized, produce high-quality printed menus for client tastings and ensure the digital versions on your website and event software are updated simultaneously.

Training and employability

Demand-oriented catalogue

A perfectly engineered menu will fail if the staff cannot execute it or sell it effectively. Training is the critical link between strategy and results. We propose a series of targeted training modules designed to equip every team member, from chefs to servers, with the knowledge and skills needed to support the goals of the new menu.

• Module 1: Principles of Menu Engineering: An introductory course for all F&B staff on the “why” behind the menu changes. Explains the concepts of contribution margin, popularity, and the four matrix categories.
• Module 2: Cost Control for the Culinary Team: A hands-on workshop for chefs and kitchen staff on precise portioning, waste reduction techniques, and maintaining recipe standards for the newly costed menu items.
• Module 3: Suggestive Selling and Upselling for Service Staff: Role-playing-based training for servers and banquet captains. Teaches them how to identify opportunities to recommend “Stars” and “Puzzles” and how to use descriptive language to sell them.
• Module 4: Profitable Banquet Package Sales: A specialized module for the sales team on how to build and sell banquet packages that are structured around high-profit items, increasing the average revenue per event.
• Module 5: Reading the Data: A session for F&B managers on how to interpret POS sales mix reports and track the performance of the engineered menu against KPIs.

Methodology

Our training methodology is based on active learning and measurable outcomes. Each module concludes with a practical assessment. For culinary staff, this could be a plate-costing test or a portion control audit. For service staff, evaluations are based on role-playing scenarios scored against a rubric of suggestive selling techniques. Post-training performance is tracked through real-world data; For example, a server’s performance can be measured by the average contribution margin per guest they serve. Success in these programs not only improves the profitability of the operation but also enhances the skills and employability of the staff, creating a more professional and motivated team.

Operational processes and quality standards

From request to execution

A full menu engineering project follows a structured pipeline to ensure consistency, quality, and stakeholder alignment at every stage. This process transforms raw data and business goals into a fully implemented, high-performing menu.

1. Discovery & Goal Setting: The process begins with a kickoff meeting with key stakeholders (GM, F&B Director, Executive Chef) to define the primary objectives. Is the goal to reduce food cost, increase average check, or simplify operations? Specific, measurable goals are documented (e.g., “Increase overall menu contribution margin by 8% within 6 months”).
2. Data Aggregation & Auditing: A formal request is made for all necessary data: 12 months of item-level sales reports from the POS, all standardized recipe cards, and current ingredient purchasing invoices. This data is audited for completeness and accuracy.
3. Analysis & Strategy Formulation: The core analysis is performed, calculating contribution margins and popularity for each item and plotting them on the engineering matrix. A strategy report is drafted with specific, item-by-item recommendations.
4. Collaborative Redesign Workshop: The findings and draft strategies are presented to the stakeholder team. This is a working session to refine the action plan, incorporating the Chef’s culinary insights and the F&B Director’s operational constraints. The final action for each item is agreed upon and documented.
5. Implementation & Pre-Launch: The creative and logistical work begins. The menu is redesigned graphically, recipes are tested and finalized, SOPs are written, and the POS system is programmed. A detailed training plan is created.
6. Execution & Go-Live: Staff training is conducted. The new menus are printed and distributed. The new menu officially launches on a predetermined date.
7. Post-Launch Monitoring & Optimization: For the first 90 days, sales data is reviewed weekly to identify any immediate issues or successes. Thereafter, performance is reviewed monthly against the initial goals. The process is cyclical; This data forms the basis for the next menu engineering review in 6-12 months.

Quality control

Stringent quality controls are embedded throughout the process to ensure the integrity of the outcome. These are managed through defined roles, clear indicators, and service level agreements (SLAs).

• Roles & Responsibilities: The F&B Analyst is responsible for data accuracy. The Executive Chef signs off on all final recipe costs and production feasibility. The F&B Director has final approval on all pricing and menu design.
• Acceptance Indicators: A draft menu design is not approved until it meets a readability score and correctly applies at least three principles of psychological design. A recipe modification is not approved until it passes a blind tasting panel.
• Service Level Agreements (SLAs): All ingredient cost changes greater than 5% must be reported by the purchasing department to the Chef and F&B Director within 24 hours. Monthly performance reports must be distributed to stakeholders by the 5th business day of the following month.

Cases and application scenarios

Case 1: The Downtown Conference Hotel – Revitalizing Banquet Profitability

Scenario: A 400-room hotel with significant conference business faced declining banquet profitability. Despite high event volume, the overall profit margin was stagnant at 22%, with a food cost percentage creeping up to 38%. The banquet menu had not been updated in three years.
Process: A full menu engineering analysis was conducted on their three-course plated dinner options. The analysis revealed a classic problem: their most popular choice, a “Grilled Chicken Breast with Roasted Vegetables” was a “Plowhorse”—high popularity but a very low contribution margin of just $8.50. Conversely, a “Pan-Seared Duck Breast with Cherry Reduction” was a “Puzzle”—a high contribution margin of $19.00 but sold very infrequently. Their “Filet Mignon” was a “Star,” both popular and profitable ($22.50 CM), while a “Mushroom Risotto” was a clear “Dog” with low sales and low margin.
Actions Taken:

1. Plowhorse (Chicken): The recipe was re-engineered. The standard asparagus was replaced with a less expensive but equally elegant seasonal vegetable medley, and the portion size of the chicken was slightly reduced from 8 oz to 7 oz without appearing smaller due to better plating. The price was increased by $3. These changes increased the contribution margin to $12.50.
2. Puzzle (Duck): The dish was repositioned on the menu, given a more evocative description (“Crispy-Skinned Duck Breast with a Tart Montmorency Cherry Glaze”), and the sales team was trained to offer it as a premium alternative during client negotiations.
3. Dog (Risotto): It was eliminated from the standard plated dinner options and moved to a separate vegetarian/specialty menu, available by request only. This reduced inventory waste.
4. Star (Filet): No changes were made to the recipe, but it was placed in a box on the menu to draw attention and solidify its status as a premium, desirable choice.

Results: Within six months, the banquet department’s food cost percentage dropped from 38% to 34.5%. The sales mix of the duck breast increased from 3% to 9%. The overall banquet profit margin increased to 27%, representing an additional $150,000 in annual profit. The project ROI was achieved in under three months.

Case 2: The Vineyard Wedding Venue – Simplifying Choice, Maximizing Spend

Scenario: An upscale wedding venue offered clients nearly unlimited customization for their menus. While this was a selling point, it created operational chaos, inconsistent food costs, and unpredictable profits. The average profit per wedding was highly volatile.
Process: The goal was to standardize offerings without losing the feeling of customization. Instead of a purely à la carte approach, they decided to engineer three distinct, tiered packages: “The Vintner’s Table” (Silver), “The Estate Collection” (Gold), and “The Reserve Experience” (Platinum). Menu engineering was used to design these packages.
Actions Taken:

• Each package was built around a core “Star” entrée (e.g., Gold was built around their popular and profitable beef short rib).
• The appetizer and dessert choices within each package were carefully selected. The Silver package included more profitable “Plowhorse” items, while the Platinum package featured high-margin “Puzzles” that added perceived value.
• They created a separate, highly profitable “Late Night Snacks” add-on menu (sliders, taco bar) which was identified as a major opportunity.
• The pricing was structured so that upgrading from Gold to Platinum felt like a small step for the client but represented a significant jump in contribution margin for the venue. The price difference was $25 per person, but the cost increase was only $8 per person.

Results: The new package structure was a resounding success. 90% of clients chose one of the three packages, dramatically simplifying kitchen operations and purchasing. The average revenue per guest (ARG) for weddings increased by 22%. The volatility in food cost was stabilized, with a consistent cost of sales of 29% across all events. Client feedback was positive; the simplified choices reduced decision fatigue, and the NPS score increased by 12 points.

Case 3: Corporate Express Caterer – Engineering for Speed ​​and Scale

Scenario: A catering company specializing in large corporate lunches and buffets was struggling with labor costs and service speed. Their business model depended on being able to serve hundreds of guests quickly and efficiently, but complex menu items were causing bottlenecks in the kitchen and on the buffet line.
Process: The engineering focus here was less on individual item margin and more on “Contribution Margin per Minute of Labor.” They analyzed not just the cost of ingredients but the time it took to prep and plate each dish.
Actions Taken:

1. They identified “labor-intensive Dogs”—dishes that were not popular and took a long time to prepare. These were immediately eliminated.
2. They re-engineered their “Plowhorse” sandwiches by moving to high-quality pre-sliced ​​meats and cheeses, reducing assembly time by 30 seconds per sandwich. Over an order of 500 sandwiches, this saved over 4 hours of labor.
3. They designed new buffet menus around “Speed ​​Stars”—dishes that were highly profitable and could be prepared in large batches and served quickly (e.g., deconstructed salad bars, large-format lasagna).
4. The buffet layout was redesigned. Lower-cost, high-margin items (salads, breads) were placed at the beginning of the line, and the most expensive protein was placed at the very end. Psychology dictates that guests fill their plates early, leaving less room for the costliest items.

Results: The company was able to reduce its kitchen labor cost per event by an average of 15%. The faster service times allowed them to cater two large events in a single day with the same core team, effectively doubling their revenue potential. Food cost saw a modest decrease of 2%, but the primary gain was in operational efficiency and throughput, leading to a 10% increase in overall net profit.

Step-by-step guides and templates

Guide 1: How to Classify Your Menu Items Using the Four-Box Matrix

This guide walks you through the core analytical task of menu engineering.

1. Step 1: Gather Your Data. You will need two reports from your POS system for a specific period (e.g., the last 6 months): a Sales Mix report showing the number of each item sold, and a financial report showing the sales revenue for each item. You will also need the current, accurate plate cost for every item.
2. Step 2: Calculate Contribution Margin (CM) per Item. For each menu item, use the formula: `Selling Price – Food Cost = Contribution Margin`. This is the profit you make on each sale.
3. Step 3: Calculate the Average Contribution Margin. Sum the total contribution margin of ALL items sold (multiply each item’s CM by the number of units sold, then add them all up). Then, divide by the total number of all items sold. This gives you the average CM for your entire menu. An item is considered HIGH profitability if its CM is above this average, and LOW if it’s below.
4. Step 4: Calculate the Popularity Index. Popularity is not just the most-sold item. A fair measure is calculated against expected popularity. First, calculate the expected popularity percentage: `100% / (Number of items on the menu)`. Then, apply a benchmark, typically 70% of the expected popularity. So, the formula is: `Popularity Benchmark = (1 / Number of Items) * 0.70`.
5. Step 5: Determine High vs. Low Popularity.For each item, calculate its current popularity percentage from your sales mix report (`Number of Item X Sold / Total All Items Sold`). If an item’s current popularity is higher than the Popularity Benchmark calculated in Step 4, it is HIGH popularity. If it is lower, it is LOW popularity.
6. Step 6: Plot Your Items. Draw a four-quadrant matrix. The vertical axis is Profitability (Contribution Margin), with the average CM as the dividing line. The horizontal axis is Popularity, with the Popularity Benchmark as the dividing line. Place each menu item in the correct quadrant:
   • Stars: High Profitability, High Popularity.
   • Plowhorses: Low Profitability, High Popularity.
   • Puzzles: High Profitability, Low Popularity.
   • Dogs: Low Profitability, Low Popularity.

Final Checklist: Have you costed every item accurately? Have you used a sufficiently long time period for sales data? Have you calculated both the average CM and the popularity benchmark correctly? Is every single item plotted on your matrix?

Guía 2: A 10-Step Process for Redesigning Your Banquet Menu

1. Set Clear Objectives: Define what you want to achieve (e.g., increase ARG by $10).
2. Analyze Your Data: Perform the matrix analysis from Guide 1.
3. Hold a Strategy Workshop: Discuss the matrix and decide on an action for every item.
4. Re-engineer Recipes: Modify Plowhorses for better margins and re-plate Puzzles for better appeal.
5. Develop New Items (If Needed): Replace Dogs with potential new Stars.
6. Restructure Pricing & Packages: Apply psychological pricing and build tiered packages.
7. Create New Menu Content: Write descriptive copy and plan the layout.
8. Design and Proof the Menu: Work with a designer to create the final product. Proofread meticulously.
9. Train Your Team: Conduct tastings and sales training for all kitchen, service, and sales staff.
10. Launch and Monitor: Roll out the new menu and track its performance against your objectives.

Guía 3: How to Cost a Banquet Recipe Accurately

1. List All Ingredients: Create a spreadsheet and list every single component of the recipe, including oils, spices, and garnishes.
2. Record Purchase Units and Costs: Next to each ingredient, note the size of the container you buy it in (e.g., 10 lb bag of flour) and the current price you pay for that container.
3. Calculate Cost per Usable Unit: Convert the purchase cost to a usable unit cost (e.g., cost per ounce, per gram, per fluid ounce). For example, if a 10 lb bag of flour costs $5.00, the cost per ounce is `$5.00 / 160 oz = $0.03125/oz`.
4. Factor in Yield Percentages: For items that require trimming or cooking, you must account for yield. If you start with a 5 lb raw beef tenderloin and end up with 4 lbs of trimmed, cookable meat, the yield is 80%. This means the true cost of that usable meat is higher. The formula is: `Original Cost per Pound / Yield % = Actual Cost per Pound`.
5. Calculate Ingredient Cost for the Recipe: For each ingredient, multiply the amount used in the recipe by its cost per usable unit.
6. Sum for Total Recipe Cost: Add up the costs of all ingredients to get the total cost for the entire recipe batch.
7. Add a Waste/Condiment Factor: It’s standard practice to add a small percentage (typically 3-5%) to the total recipe cost to account for minor waste, condiments, and incidentals.
8. Calculate Cost per Portion: Divide the final recipe cost by the number of portions the recipe yields. This is your final plate cost.

Internal and external resources (without links)

Internal resources

• Standardized Recipe Card Template with Costing Fields
• Menu Engineering Analysis Spreadsheet (Excel/Google Sheets Template)
• Pre-Service Briefing Checklist for New Menu Items
• Supplier Price Tracking & Comparison Sheet
• Plating and Presentation Guide with Photos

External reference resources

• The National Restaurant Association’s guidelines on food cost management and menu design.
• HACCP (Hazard Analysis and Critical Control Points) principles for food safety.
• Classic texts on menu psychology and pricing strategy by authors like Gregg Rapp.
• The Uniform System of Accounts for the Lodging Industry (USALI) for standardized financial reporting.

Frequently asked questions

What is the difference between food cost percentage and contribution margin?

Food cost percentage is the cost of the ingredients divided by the selling price. It tells you about efficiency. Contribution margin is the selling price minus the cost of ingredients. It tells you the actual dollar amount of profit each item generates. Menu engineering focuses on maximizing the total contribution margin, not just minimizing the food cost percentage. You would rather sell an item that costs $10 and sells for $30 (33% food cost, $20 CM) than an item that costs $2 and sells for $8 (25% food cost, $6 CM).

How often should I re-engineer my banquet menu?

A full, in-depth menu engineering analysis should be conducted at least once a year. However, you should be monitoring your sales mix and ingredient costs on a quarterly or even monthly basis. Major price fluctuations from suppliers or significant shifts in customer demand may trigger the need for a more immediate review.

Can menu engineering work for buffet-style events?

Absolutely. For buffets, you engineer the entire presentation. You can calculate the cost-per-guest for the whole buffet and identify which individual dishes are the most expensive. You can then use psychological strategies in the buffet layout: place less expensive, filling items (like salads, pastas, and breads) at the beginning of the line, and place the most expensive items (like the carving station) at the end. You can also analyze which buffet items are most and least consumed to eliminate “Dogs” from the lineup.

What’s the biggest mistake people make in menu engineering?

The biggest mistake is focusing solely on food cost percentage. This leads to decisions like removing a high-selling steak because its food cost is 40%, even though it generates a massive $25 contribution margin. The goal is to make the most total profit dollars, not to win an award for the lowest food cost.

Do I need special software for this?

While specialized menu engineering software exists and can automate the process, it is not a requirement. All the calculations and matrix plotting can be done effectively using standard spreadsheet software like Microsoft Excel or Google Sheets. The most critical component is accurate data from your POS and recipe costing, not a fancy tool.

Conclusion and call to action

In conclusion, a menu is far more than a list of food items; it is the most valuable piece of real estate in your entire operation. By applying the disciplined, data-driven principles outlined in this guide, you can transform it from a passive document into an active sales tool. The consistent application of menu engineering for profitable banquets provides a clear path to enhanced financial performance. By identifying your Stars, fixing your Plowhorses, solving your Puzzles, and removing your Dogs, you create a more profitable, efficient, and guest-pleasing offering. The potential rewards are significant, with documented cases showing increases in overall profit margins of 5-15% and reductions in food cost by 2-4 points. The process requires diligence and a commitment to data, but the return on that investment is one of the highest you can achieve in the food and beverage industry. Your journey starts now: take your top 10 best-selling banquet items, calculate their true contribution margin, and take the first step towards a more profitable future.

Glossary

Contribution Margin (CM)

The amount of profit generated by a menu item, calculated as Selling Price – Food Cost. This is the key metric for profitability in menu engineering.

Food Cost Percentage

The cost of an item’s ingredients divided by its selling price. A measure of cost efficiency.

Menu Mix (MM)

Also known as sales mix. It refers to the number of each menu item sold over a specific period.

Star

A menu item with both high profitability (high CM) and high popularity. These are your best items; maintain their quality and promote them.

Plowhorse

A menu item with low profitability (low CM) but high popularity. These are popular but don’t make you much money. The strategy is to increase their profitability without reducing sales.

Puzzle

A menu item with high profitability (high CM) but low popularity. These are profitable but don’t sell well. The strategy is to figure out how to sell more of them.

Dog

A menu item with both low profitability (low CM) and low popularity. These are losers and should typically be removed from the menu.