Double Duty: Cross-Utilizing Ingredients
A slack economy forces even more focus on the age-old process of cross-utilization.
By David Farkas, Senior Editor -- Chain Leader, 8/1/2008 12:00:00 AM
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| McCormick & Schmick's developed recipes that can be used with different fish species. |
Good things happen when kitchens cross-utilize ingredients: SKUs (stock-keeping units) remain at a minimum and production is simplified. Today rising commodity costs and slumping sales have demanded an even greater focus on this age-old process.
“We have put everything under the microscope,” declares Sante Fe Cattle Co.'s John Davis, president of the 24-unit steakhouse chain headquartered in Brentwood, Tenn. “You have to look at the total picture.”
Part of the job is making sure ingredient lists do not swing out of hand, rigorously identifying unnecessary SKUs. It's the case at the 400-plus-unit Red Robin Gourmet Burgers, in Greenwood Village, Colo.
“We have an initiative on taking SKUs out of the system, and so far we've taken about 10 out of the new menu,” says President Eric Houseman, citing roasted almonds and toasted sesame seeds as recent examples. This year's goal is a 7 percent to 10 percent reduction.
“We're not about not bringing in SKUs,” declares Chris Tomasso, chief marketing officer for Bradenton, Fla.-based First Watch Restaurants, a breakfast- and lunch-only concept. “We're just about not bringing in incremental SKUs.”
For instance, First Watch recently eliminated a bread roll and au jus, two SKUs in a French dip sandwich that were not used elsewhere. To update the menu, the chain introduced two wrap sandwiches, one of which uses roast beef. The only new SKU was tortillas, justified because R&D is developing several more wraps.
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| First Watch developed a wrap sandwich using the roast beef from a French dip. |
Reversal of Fortune
Monical's Pizza Team Leader Pat Alvey, who oversees purchasing and distribution, says, “Sales figures and movement of product” have led to dumping a large number of ingredients.
The 59-unit Bradley, Ill.-based chain's ingredients list has shrunk from 100 to 70 items in recent months. Candied pecans (used on only one salad), garlic-aioli dressing, specialty bread, one of three types of sliced cheese and three types of chicken are gone. Today's slimmer menu could save each unit as many as 20 hours per week or roughly $200, Alvey estimates.
Alvey did add a SKU: precooked and frozen grilled chicken breast, which costs $1 per pound. “We are using it five different ways,” he says.
The strategy is in keeping with current trends to make sure nearly everything coming in the back door will exit shortly thereafter. “It's all about velocity and usage,” declares Charlotte, N.C.-based purchasing consultant Lauren Cahill-LeFranc of Results Thru Strategy. “Purchasing's ideal state is where culinary cross-utilizes ingredients in multiple recipes.”
Too Many SKUs
Few industry executives know that better than Bill King, vice president of culinary and training for 87-unit McCormick & Schmick's, who also runs the purchasing department at the Portland, Ore.-based seafood chain.
Four years ago, King recalls, the company had allowed the “independent side to get carried away.” The chain prides itself on catering to a region's tastes. “It was as if every storeroom had its own unique composition,” he says, recalling some 1,500 SKUs.
That number has since been trimmed by half, King explains, adding that restaurant kitchens now have between 15 and 20 ingredients unique to the region they operate in.
Roughly 85 percent of the SKUs are the same from restaurant to restaurant. “We've tried to create recipes that have practical application to more than one species,” King explains.
Creating Value
Today's economy and competition have compelled Sante Fe Cattle Co. to develop a new value-menu section, consisting of five quesadillas, for which Davis brought in a single new item: sun-dried tomatoes, used in the Spicy Roasted Corn Quesadilla.
Davis says the existing ingredients are inexpensive enough to justify keeping the quesadillas below $7.99. What's more, such dishes help offset the rising cost of red meat, the core of the concept's menu.
“Now as we move on down the road, we'll find other uses for sun-dried tomatoes,” Davis says.
Nor does McDonald's—at least not for the most part. Spokeswoman Danya Proud admits that the Oak Brook, Ill.-based burger giant has yet to cross-utilize the edamame in its 2-year-old Asian salad. So do they have a future? “I can't share that with you,” Proud says.
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| Santa Fe Cattle Co. has developed dishes that use inexpensive ingredients to offset the rising cost of red meat, the core of the concept's menu. |
Wary of the New
One-off ingredients like edamame are alluring, and there are times when operators contemplate bringing one in because a dish or marketing campaign holds great promise. This may necessitate an agreement with a distributor to slot new products, says restaurant consultant and former marketing executive Neil Culbertson. “An LTO like sliders may be on trend, and so you say, 'We're doing sliders.' You don't worry about cross-utilization at this point,” he says.
Careful, though. Purchasing departments, which manage the SKUs at the distribution level, are wary of new ingredients. Warns Cahill-LeFranc: “What marketing and culinary may see as a trendy must-have can be a pain in the you-know-what for a purchasing agent unless the velocity at the distributor merits an inventory slot.” And these days, that's certainly not a given.
