 Foodservice operators are managing a lot of uncertainty right now around food costs and how prices for imported menu items may fluctuate in the months ahead. Fortunately, this can be managed from several directions that may help insulate operators from volatility. For starters, have systems in place to monitor pricing frequently, particularly if you’re adapting recipes regularly. Work with vendors who can support that effort with forecasts, recommended ingredient substitutes, reliable traceability, and even revised agreements that provide group discounts or increased certainty around pricing.
Look for opportunities to optimize your menu and recipes. Where can you adjust portion size or ingredient use to make your business less susceptible to market swings? What items in your inventory can help you add heft to dishes if you need to omit others? If you understand what your most profitable menu items are, you can design your menu and promotions to steer guests in their direction, then weed out/modify items that aren’t pulling their weight (or would likely be impacted by anticipated high prices). Manage your inventory with precision. Where can you bring in more ingredients that are less prone to market volatility? Where are there opportunities for profitable promotions? AI tools can help you forecast demand and plan accordingly. This is also a good time to review food safety, ensuring your staff is dating, storing and using ingredients in ways that promote safety – and that your kitchen is minimizing food waste wherever possible.  Thinking about how technology can optimize your business can be overwhelming when there are so many options and potential factors to track. But it can also be a huge opportunity – to manage costs and to understand (and serve) your guests so much better than before. Take AI and its applications with menu pricing. At a time when many reports say consumers are reaching their limit when it comes to restaurant prices, it’s critical to know where the line between price and demand exists for your guests. If you have quality data about your business, AI can analyze it and come up with pricing strategies that consider your guests’ preferences, as well as how your traffic shifts based on the weather or time of day. Restaurants are at a point where they can use dynamic pricing like airlines have been using it for years (when a person takes a flight, they don’t assume they have paid the same price as their seatmate, right?). We’re approaching this point for restaurants. You can harness AI to create personalized pricing options for guests, to make pricing adjustments in real time based on the factors that work for your restaurant, and to strike the right balance between your prices and the demand they accommodate. You can also use your pricing to make your regular guests feel special – with offers and special prices that you appear to have dreamed up with only them in mind. New doors are opening that can help you build stronger connections with your guests. Are you gathering quality data and ensuring you’re making the best marketing decisions you can from it?
 While the pandemic has held plenty of challenges for foodservice operators, it has also sparked a period of creative solving like never before – and the lessons will be useful for the long term. One example is the ongoing refinement of menu engineering, and specifically, operators’ ability to adjust prices on the fly based on supply and demand. Operators can use dynamic pricing to increase the price of a menu item that is selling well, for example, and decrease the price of an item being sold during a slower shift (some restaurants are even starting to use dynamic pricing for the chance to reserve their most in-demand tables on busy nights). Using a QR code system can enable this sort of flexibility. At a time when it’s become all the more challenging to keep the right supplies coming in and anticipate customer traffic, dynamic pricing may provide some extra flexibility. The key is adjusting prices downwards (when possible) as well as upwards so customers perceive it as a fair strategy.
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