What if the measurements that your stakeholders, bosses and competitors judged you by were suddenly invalid? This is what chain menu developers are experiencing as ingredient costs continue to rise at the same time guest counts are shrinking. Operations across every segment are adjusting the way they measure success.

Donette Beattie, vice president of purchasing and product development for Madison, Wis.-based Country Kitchen International, says that measurement is ongoing. She can see real-time pricing for recipes via a system connected with the chain's distributor. Beattie says her development team can put in hypothetical prices or recipes as well. “Building the database was tedious,” she admits. “But once you invest the time to set it up, it is excellent. We can print reports for analysis in meetings or do mock recipes. It's easier.”

The family-dining chain has tweaked items for better margins, but prefers to substitute similar ingredients rather than reduce portion size. It recently tested a turkey product 30 cents less per pound, but its quality was high and it passed the chain's taste panels. Country Kitchen will save 10 cents per plate without hurting the perceived value of the dish.

Beattie does not just look for the cheapest items. “Prices are changing so much now that you have to make sure all the pricing is legitimate,” she says. “Now is when we really see who our vendor partners are, which ones are running good, efficient operations and are able to keep their prices in check as well as managing other areas of their business.”

Thousand Oaks, Calif.-based Baja Fresh Mexican Grill also explores new ingredients, but only if it creates a better value for the guest and holds margin. “With commodity prices doing what they're doing, and pressure to keep prices down, those high-margin items are becoming fewer and farther between,” says Director of Research and Development Jon Rogan.

Baja Fresh also stands pat on items that aren't selling. “We don't allow for emotional attachment to menu items that don't perform,” Rogan says. “Either it pulls its weight or it's likely to be gone.”

He compares menu development in good times and bad to managing a portfolio: “You expect a certain level of performance for each item on that menu. If it is not performing, then you need to remodel or rebuild to enhance the portfolio's performance.”

Gabriel Caliendo, corporate chef at The Lazy Dog Cafe, a three-unit casual-dining chain based in Huntington Beach, Calif., mourns the loss of the freedom to follow food trends. “In the past I might be more interested in developing a flavor profile that I really love based on the trends and then look at costing,” he says. “Now I'm at the point where I don't spend much time R&Ding until I've got the cost. I'd be more apt to make a guesstimate of a recipe and cost it to see where I'm at, and then I can fine-tune the recipe.”

With an average check of $13 or $14, and food cost of 26 or 27 percent, The Lazy Dog has tried not to pass price increases to customers; it has taken small increases on specific products rather than overall percentage increases.

The chain has also held onto products that aren't selling well because they create brand aura. For example, Caliendo says pricey Belgian beers at the bar are weak sellers, “but there are customers that will come in and be very impressed that you carry a beer like that. It's important when you're considering the concept as a whole.”

He adds that, overall, the concept is just accepting lower margins. “We're just going to have to roll with the punches knowing that prices can't keep going on the path they're going,” Caliendo says.

Grill Concepts Inc. is also allowing for lower margins to keep customers coming in. “You can't just raise prices; you can't just come up with some cheap items,” argues John Sola, senior vice president of culinary for the Los Angeles-based operator of The Daily Grill and The Grill on the Alley. “There just aren't that many people out there going out to eat.”

In November, Daily Grill began a prix-fixe menu promotion to lure holiday shoppers. The three-course menu with soup or salad, a dessert and a protein dish, all for $19.95, was well below the $27 average dinner check. With the stagnant economy, Daily Grill continued and evolved the promotion. One popular iteration replaces dessert with a glass of wine. The fixed-price menus make up 10 to 12 percent of sales, and about half of the orders are the wine option.

Sola is also trying smaller portions at lower prices. For example, he periodically offers a limited-time culotte steak, the tender top piece of the sirloin, with a blue-cheese crust. Usually run with about a 30 percent food cost, he's making it about 32 percent, using a smaller cut and charging a few dollars less.

“Food cost is the last thing I'm thinking about,” Sola says. “I'm trying to think about something that people can look at and find value, so that we don't lose market share. If you drive traffic, food cost will come along.”