What is menu engineering?
Menu engineering is the process of planning, costing, pricing, and organizing your menu so it supports profit and smooth operations. It looks at food cost, contribution margin, item popularity, and menu layout to help you make better decisions.
Menu Engineering for New Restaurants
Overview
Starting a new restaurant comes with many decisions, and one of the most important is creating a menu that can make money from the first day. Your menu affects everything - your food costs, how much prep work your kitchen needs, how fast orders move, and how customers experience your brand. If the menu isn't planned well before opening, you can end up with high waste, low profit, and slow service once customers arrive.
Menu engineering is the process of building a menu that is both appealing to guests and profitable for your business. It focuses on simple but essential steps - knowing your recipe costs, controlling portions, choosing the right prices, and placing items where customers are most likely to notice them. These choices help you understand which dishes support your profit goals and which may need changes before you open.
For new restaurant owners, doing this work early makes everything easier. You can set clear food cost targets, prevent ordering mistakes, reduce stress in the kitchen, and avoid last-minute menu changes.
Concept and Target Guest
Before you build any recipes or set any prices, you need a clear understanding of who your restaurant is for and what your concept promises. This step may seem simple, but it shapes every menu decision that follows. Many new restaurants struggle because their menu tries to serve everyone, which leads to a long list of dishes, high food costs, and operational stress. Starting with a clear concept and target guest keeps your menu focused, manageable, and aligned with what customers actually want.
Begin by defining your concept in practical terms. Are you offering fast-casual meals, comfort food, health-focused options, or a premium dining experience? Each concept has different expectations when it comes to price ranges, portion sizes, ingredient quality, and preparation time. For example, customers at a fast-casual restaurant expect quick service and affordable items, while customers at a higher-end restaurant expect more complex dishes and higher prices.
Next, think about your target guest. Who will be coming through your doors most often? Families? Office workers? Students? Local residents? Knowing your audience helps you design a menu that fits their dining patterns. A menu for a lunch-heavy restaurant should have fast items that travel well. A dinner-focused restaurant may need dishes that encourage longer visits and higher check averages.
Your concept and guest profile also guide the size of your menu. A new restaurant should avoid starting with a large menu because it increases food waste, slows down the kitchen, and requires more skilled staff. A smaller, well-designed menu is easier to control and more profitable.
By starting with a clear vision of your concept and guests, you build a menu that feels intentional, easy to manage, and financially realistic from the very beginning.
Build Recipes With Accurate Costs
Building accurate, consistent recipes is one of the most important steps in menu engineering. It helps you control food cost, reduce waste, and keep your kitchen running smoothly from the first day. Here are the key steps to get this right -
1. Write Clear, Detailed Recipes - Create a written recipe for every item on your menu. Include ingredients, exact portion sizes, cooking steps, and plating instructions. Clear recipes prevent guessing and help every cook prepare dishes the same way.
2. Standardize Portions - Decide the exact amount of each ingredient used in every dish. Standard portions keep your food cost predictable and stop oversized plates from eating into your profit.
3. Calculate Ingredient Costs Correctly - Use the cost per usable unit - not just the price on the invoice. This means calculating the true cost of each ounce, pound, or piece based on what you can actually use.
4. Measure Yields to Find the Real Cost - Find out how much usable product you get after trimming, peeling, cooking, or loss. Yields can change your cost more than you think. A 10-pound case may only give you 7 pounds of usable product.
5. Test and Adjust Your Recipes - Cook each dish the way it will be served. Make sure the portion size, cost, and prep time match your expectations. Adjust if needed before opening day.
6. Train Your Team Early - Introduce your final recipes to the kitchen team before you open. Consistent training ensures your dishes come out the same during every shift.
By following these steps, you build recipes that support stable food cost, smooth production, and consistent guest experiences.
Contribution Margin Approach
Once your recipes are costed correctly, the next step is to price each item in a way that supports profit, not just sales. Many new owners simply mark up food cost by a rough percentage and hope it works out. This often leads to prices that look fine on paper but don't give enough profit once overhead, labor, and waste are included. A better way is to use a contribution margin approach.
Contribution margin is the money left over after you subtract the food cost from the selling price. For example, if a dish costs $4 to make and you sell it for $12, the contribution margin is $8. That $8 is what helps pay for rent, labor, utilities, and profit. Two items with the same food cost percentage can have very different contribution margins, so looking only at percentages can be misleading.
To price with contribution margin in mind -
1. Set a target food cost range for your concept (for example, 28-35%, depending on style).
2. Look at both the food cost percentage and the dollar margin for each item.
3. Make sure high-volume items have strong margins, not just low food cost percentages.
4. Adjust portions, ingredients, or prices if the margin is too low.
This method helps you avoid "popular but unprofitable" dishes that fill the kitchen but don't support the business. It also guides you when choosing which items to feature, promote, or highlight on the menu.
By focusing on contribution margin instead of only markup, you build a menu that can handle your fixed costs and still leave room for real profit.
Categorize Items
After you've set your prices, the next step is to organize your menu items using a simple tool called the menu engineering matrix. This helps you decide which dishes to promote, adjust, or possibly remove. Even before opening, you can use your best estimates and then update the data once real sales start coming in.
The matrix looks at two main things for each item -
1. Popularity - How often guests order the item.
2. Profit - How much money the item brings in after food cost (contribution margin).
Using these, each item falls into one of four groups -
1. Stars - High profit and high popularity.These are your best items. They are profitable and guests like them. Plan to feature them in strong positions on the menu, make sure they are easy for the kitchen to execute, and keep their quality very consistent.
2. Plowhorses - Low profit but high popularity. Guests order these often, but they don't make much money per plate. You don't want to lose them, but you may need to reduce portion sizes, adjust ingredients, or slightly increase price to improve their margin.
3. Puzzles - High profit but low popularity. These items make good money when ordered, but not enough guests choose them. You may need better descriptions, placement, or staff suggestions to increase their sales.
4. Dogs - Low profit and low popularity. These items don't sell well and don't make much money. Before opening, decide if they truly need to be on the menu. If not, remove them or redesign them.
By organizing items this way, you can make smarter choices about what to highlight, adjust, or cut before you open, instead of waiting for problems to appear later.
Menu Layout and Item Placement
Your menu layout should help guests find and choose the items that support your profit. Here are the key steps -
1. Keep the Menu Simple and Easy to Read - Use clear section headings like "Starters," "Mains," and "Drinks." Avoid tiny fonts and crowded layouts. When the menu feels overwhelming, guests rush their decisions and often choose the safest, not the most profitable, items.
2. Limit the Number of Items - A smaller, focused menu is easier for guests to read and easier for your kitchen to execute. Too many options slow down decision-making and create more prep, more waste, and more stress for your team.
3. Use Strong Visual Zones for Profitable Items - Guests often look at the top of each section and then the center. Place high-margin "Star" items in these spots. Use simple tools like bold text, a box, or a border to make them stand out - but don't highlight everything.
4. Write Clear, Helpful Descriptions - Use short descriptions that explain the main ingredients, flavor style, and key features. Skip fancy language. A clear description builds trust and makes it easier for guests to try new or higher-margin items.
5. Support Kitchen Workflow With Smart Grouping - Group items that use similar prep or the same station. This helps balance the workload during busy times and reduces long ticket times, which improves guest experience.
6. Check That Design Matches Your Concept - Make sure the overall look of the menu - fonts, layout style, and structure - matches your concept. A clear, honest design builds confidence and encourages guests to order more comfortably.
By following these steps, your menu layout will guide guests toward the items that work best for both their experience and your bottom line.
Ordering, Prep, and Inventory Systems
A menu is only successful if your team can support it every day. Before opening, it's important to make sure your menu matches how you order ingredients, prep food, and manage inventory. If this part is ignored, you may face frequent stock-outs, excess waste, and stressed staff right from the start.
Begin with your ingredient list. Look at all menu items and highlight where you can reuse the same ingredients in more than one dish. This doesn't mean every item should taste the same, but shared ingredients help you keep a tighter inventory, buy in better quantities, and reduce spoilage. If you notice a dish that uses a special ingredient no other item needs, ask yourself if it truly earns its place on a new menu.
Next, connect your menu to your prep routine. For each dish, decide what can be prepped ahead and what must be cooked to order. From this, build simple prep lists for each shift. The goal is to arrive at realistic prep levels so the team isn't cutting vegetables or marinating proteins in the middle of a rush. Your recipes and projected sales should guide how much of each item you prepare.
Then, think about ordering and par levels. Set starting pars for key items based on your expected guest count, serving size, and delivery schedule. A good par helps you have enough product for busy periods without stacking too much in storage. Review these pars closely in the first weeks and adjust as you see real demand.
Finally, align the menu with your storage space and equipment. Check that your coolers, freezers, dry storage, and cooking stations can handle the volume and variety of items you plan to offer. If your menu needs more space or tools than you have, simplify it before opening.
When your menu fits cleanly into your ordering, prep, and inventory systems, your kitchen runs smoother, costs stay under control, and your team can focus on serving guests instead of putting out fires.
Test, Refine, and Prepare
Even with careful planning, your menu will not be perfect on day one. Real customers, real ticket times, and real waste numbers will always reveal things that planning alone cannot. The goal is not to open with a "finished" menu, but with a solid starting point and a clear plan for how you will adjust it.
Before opening, test as much as you can. Run tasting sessions with your team. Time how long each dish takes to prepare. Check how many pans, burners, or fryer baskets are in use at once. If one item slows everything down or needs too many steps, simplify it or adjust the recipe. A strong menu is not only tasty - it is practical during a rush.
Once you start serving guests, pay attention to a few key numbers -
1. Which items sell the most and the least
2. How much food is being wasted or thrown away
3. Any dishes that cause frequent remakes or complaints
4. Ticket times during busy periods
Use this information to make steady, small changes. You might trim your menu, adjust portion sizes, improve descriptions, or move items to better positions on the menu. You may also need to update pars, change prep levels, or shift staff between stations based on what actually happens during service.
Share your plan with your team so they know that adjustments are expected, not a sign of failure. When everyone understands that menu engineering is ongoing, they are more likely to speak up about problems and suggest useful changes.
By treating opening week as the start of a learning period, not the final result, you protect your profit, reduce stress, and give your new restaurant a better chance to grow in a controlled and confident way.
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Frequently Asked Questions
How does menu engineering help with food waste?
When recipes, portions, and pars are planned, you buy closer to what you actually need. Shared ingredients across dishes, realistic menu size, and accurate prep levels reduce spoilage and leftover food.
How do I decide which items to remove from the menu?
Look at three things- Low sales, Low profit , Operational difficulty (slow, complex, or stressful dishes). If an item scores poorly in two or more of these areas, it's a good candidate to remove or redesign.
How does menu layout affect profit?
Layout affects where guests look and what they choose. Clear sections, readable fonts, and smart item placement help guests quickly notice your most profitable dishes. Simple highlights like boxes or bold text on high-margin items can gently guide choices without pressure.
What food cost percentage should a new restaurant aim for?
It depends on your concept, but many restaurants aim for a food cost between 28% and 35%. Higher-end concepts may accept slightly higher food cost if prices and margins still support total profit. The key is to set a target and check your recipes and prices against it.
