Food and Beverage cost reporting: methodologies applied to an Italian food-chain

Abstract

The objective of the work is to describe how food and beverage cost reporting can be developed in the restaurant industry. The description of available techniques is completed by their application in the case-study of an Italian food chain.

The work starts with an introduction of the topic of the so-called “food cost”, which represents a relevant cost component for all restaurants, and must therefore be analysed carefully.

Due to the insufficiency of the Income Statement to analyse food and beverage cost other methodologies must be employed, which must be specifically adapted to the restaurant industry.

Menu Analysis is the suggested technique to obtain information about the food cost and the overall contribution margin for each menu item. Variances’ Analysis is instead suggested to analyse properly all food and beverage cost’s components.

A case-study has been described to offer a detailed practical example of how the analyses can be implemented.

Lastly their usefulness is discussed and further improvements are proposed.