Food and

Beverage
Management

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Food and Beverage Management
 Aims
Food and Beverage Management aims to equip you with the
ability to apply theoretical and technical aspects of the
complexities of managing food and beverage outlets as well
as the developing trends and increasing demands from the
general public, using examples from the hospitality industry.

Upon successful completion you will have informed

awareness of Food and Beverage Management methods and
procedures.

This unit forms part of the Hospitality Management Qualification.

 Learning Outcomes
On completion of this unit you will know and understand the:

• Complexities of managing food and beverage outlets

• Functions and responsibilities of food and beverage management

• Duties of the purchasing manager in relation to the purchasing procedure

• Purpose and objectives of food and beverage control

• Principles of food and beverage management across a range of catering

systems
 Unit Content

1. Introduction to Food and Beverage Management

2. Food and Beverage Outlets
3. The Meal Experience
4. Food Menus and Beverage Lists
5. An Overall View of Food and Beverage Control
6. Financial Aspects
7. Purchasing
8. Receiving, Sorting and Issuing
9. Food and Beverage Production
 Teaching Content

10.Food and Beverage Service Methods

11.Food and Beverage Production Control
12.Food Controlling
13.Beverage Controlling
14.Revenue Control – Control Systems – Operating Ratios
15.Food and Beverage Management in Fast Food and
Popular Catering
16.Food and Beverage Management in Hotels and Quality
Restaurants
17.Food and Beverage Management in Function Catering
1. Introduction to
Food and Beverage
Management

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 Classifying food and beverage operations
There are many ways of classifying food and beverage operations for different
purposes:

• outlets that operate on a strictly commercial basis and those that are
subsidised.

• the type of market served. In some cases, the market is confined to restricted
groups, as for example, in a hospital or a prison or on a cruise ship, while in
other cases the outlet is open to the public at large.

• outlets where catering is the main activity of the undertaking, as for example,
in a privately owned commercial restaurant, and those where it is a secondary
activity, as is the case with travel catering or school meal catering.

• outlets that are in public ownership and those in private ownership .

 The main sectors of food and beverage outlets

FOOD & BEVERAGE OUTLETS

COMMERCIAL SUBSIDISED OF WELFARE

Public or private ownership Institutional catering
(Catering main or secondary activity) Schools
Universities and colleges
Hospitals
The services
Prisons
RESTRICTED MARKET OPEN MARKET
Employee catering: contract food
Travel catering Hotels service/in-house caterer
Clubs Restaurants
Contract food service Fast-food/take-aways
Function and event catering Pubs & bars
 Cost & Market Orientation
Different businesses have different approaches to business. In simple terms:

• Market orientation is an approach to business that prioritises identifying the needs

and desires of consumers and creating products and services that satisfy them.

• Cost orientation is an approach that priorities improving performance by reducing

the costs per unit.

Cost Orientation Market Orientation

Generally found in the welfare sector: Generally found in the commercial

sector:
Prisons
Hospitals Restaurants
Education Hotels
Employee catering Pubs and bars
Fast food/take-aways
 Cost & Market Orientation
A market-oriented business displays the following
characteristics:

• A high percentage of fixed costs

• A greater reliance on increases in revenue

• An unstable market demand for the product

• More likely to have a more flexible pricing policy

 Cost & Market Orientation
A cost-oriented business displays the following
characteristics:

• A lower percentage of fixed costs

• A greater reliance on decreases in costs

• A relatively stable market demand

• Most likely to have a more traditional fixed pricing

policy
 Activity
• Select cost or market orientation

What do each of the bullet points mean in terms of how the

business is operated?

Example:
A high percentage of fixed costs in market orientated businesses:
this includes rent, rates, management salaries, depreciation of
buildings and equipment which remains fixed regardless of any
changes in the volume of sales. These fixed costs have to be covered
before a profit can be made
 Food and Beverage Management Roles
• Department head/Junior management: managing a section within an operating unit.

• Unit manager/Section manager : managing a complete unit or a section within a

larger unit.

• General manager: overall control of one large unit composed of several sections or a
collection of smaller units

• Area manager: overall responsibility for several separate large units or geographic
areas.

• Director : responsibility for the operation and management of a complete

organisation.

• Owner/proprietor/partner.
 Responsibilities of Food and Beverage Management
• Managing the • Managing
business operations

Managing business: Managing a crisis

performance areas
Specialist technical
objectives
operations
strategic decisions Day to day
legal complexity

Managing:
IT
individuals
Self-development
teams
Interpersonal skills
external contracts
Training
personnel
administration
• Personal skills • Managing
people
 Constraints to food and beverage management

The management of food and beverage departments is technical

and complex

There are both external and internal pressures that impact on

the management of food and beverage departments

External factors Internal factors

Political Food and beverage

Economic Staffing
Social Control
Technology
2. Food and
Beverage
Outlets

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 Key terms

Public sector
General Market
organizations that are
owned and operated by
Provision of food &
the government and
beverage services to
exist to provide services
general public
for its citizens.

Restricted Market Private sector

Provision of food and Provision of food and

beverage services to to beverage services to to
specified specified
groups of people groups of people
 The commercial sector
• The term commercial sector can be applied to food and
beverage outlets where profitability is their main
concern.

• Commercial outlets exist in both the private and public

sector of the economy

• In the commercial sector, catering may be the main

activity or a secondary or additional service

• Commercial outlets operate in both the general and

restricted market.
 Commercial outlets

General Market Restricted Market

Hotels Transport Catering

Restaurants & snack bars o airways
Bar/pubs o roadways
Coffee shops o railways
Nightclubs Membership/private clubs
Fast /take away food Institutional Catering
Industrial Catering
Function catering
 The welfare sector
• The term can apply to food and beverage outlets
where the profitability of the catering facility is not
the outlets primary concern

• The primary obligation is the well-being and care of

their customers

• Often non-commercial operations are usually

subsidised by the government

• The market is mostly restricted

 Welfare/subsidised outlets

Institutional catering Industrial catering

Schools Employee catering

Universities/colleges Contract caterers
Hospitals
Prisons
Armed services
 Activity

• Research both the commercial and welfare

sections of the hospitality industry

• Identify what businesses operate locally to you

• Compare and contrast the products and

services offered in each sector.
3. The Meal
Experience

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 What is the meal experience?

• Defined as series of events both tangible and

intangible that a customer experiences.
Key terms

Tangible Intangible

which can be feel which can be only

by touching, seeing sensed/felt like
like restaurant restaurant
tables, chairs etc atmosphere etc
There are 10 factors that make up the meal
experience, what do these include?

• Food and drink

• Variety in menu choice
• Level of service
• Price and value for money
• Interior design
• Atmosphere and mood
• Expectation and identification
• Location and accessibility
• Food and beverage service employees
• Trends in eating out
 What is Expectation and Identification?

A single customer or group of customers arriving at a

restaurant or a meal bring with them a series of
expectations regarding that restaurant

The type of service they will receive, the price they will pay,
the expected atmosphere and mood of the restaurant, etc.

The customer’s expectations may be varied and numerous.

These may change depending on when they visit, who they
visit with and why they are visiting.
 Food and drink

• The choice of food and drink available

• The quality of the product
• The quantity of the product

• The consistent standard of the product

• The range of tastes, textures, aromas and colours

• The presentation of the food and drink

• The service at the correct temperature
 What is variety in menu choice?
The type of menu offered by an establishment and the variety of
menu choice

At the lower level of the market:

• Menu items are limited.
• Customers are price sensitive
• Time available restricts choice.

In fine-dining restaurants:
• Average spend per head will be high.
• Time taken will be longer
• Diners expect a large menu selection
 Levels of Service
• The higher the cost of the meal to the customer, the more service the customer
expects to receive.

• Therefore counter service tends to be used in fast-food restaurants and silver

service in fine dining restaurants.

• The actual service of the food and beverages to the customer may be described
as the ‘ direct ’ service.

• Part of the restaurant’s total service, however, is also composed of ‘ indirect ’ or

ancillary services e.g. the provision of cloakroom facilities; access to the Internet.

• It is necessary for a restaurant to identify the level of service it is going to offer

in its offer and to extend this standard of service throughout all aspects of the
operation.
 Interior Design

The overall interior design of a restaurant is one of the

first physical aspects of that a customer encounters.

This first impression is very important.

Can you think of the different aspects of interior

design?
 Food and Beverage Employees

• Staff employed by a restaurant operation should

complement the meal experience.

• They are able to do this in a variety of ways:

• their social skills; their age and gender; uniform; the

tempo of their service, and so on.

• The importance of each of these factors, will again, vary

depending on the type of outlet you visit.
 Activity
Value for money

We have looked at how many different meal experience

factors depend on the price a customer is prepared to
pay for a meal.

What does the term value for money mean?

Think about when you eat out, what would you expect
for you to say your meal was value for money?
 Location and accessibility

The location is said to be the most important feature.

Location can persuade or dissuade customers from visiting.

Accessibility is as important as location.

The operation should be well served by buses, trains or taxis and

have car parking facilities

If a take-away facility expects a large percentage of its business

from passing trade, there should be a heavy flow past its doors.
 Activity
Atmosphere and Mood

Research what factors may contribute to the atmosphere

and mood of a restaurant. 

Compare a high-class luxury restaurant with a basic chicken

restaurant.

How do these factors differ?

4. Food Menus
and Beverage
Lists

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 Basic Menu Criteria
• The primary objective of any food and beverage
outlet is to sell its food and drink products

• The major aid to doing this is the menu, in all its

many forms

• There are several basic criteria that need to be

considered to ensure that the menu is an effective
sales tool.
General presentation Attractive
Clean
Easy to read
Completement the occasion
Reflect current awareness
Design

Menu content Language

Accuracy
Pricing
Sales mix
Size and form Size
Shape

Layout Not too long

Not too short
Nutritional content Calorie content
Lifestyle diets
 The two basic menu types

Table d’hôte menu À la carte menu

• Restricted menu • Large menu offering greater choice
• Offers small number of courses 3-4 • Listing under the course headings all
• A limited choice within each course the dishes available
• Contains popular dishes • All dishes prepared to order
• A fixed selling price • Each dish is separately priced
• Uses readily available ingredients • More expensive than a table d’hôte
• All the dishes ready at the same time menu
• Often contains exotic and high cost
seasonal foods
Used for Used for
• Breakfast, lunch and dinner Breakfast, lunch and dinner
with adaptations for Special promotions (Plat du jour)
• Buffets
• Banquets
• Cyclical menus
 Activity

• Design a simple table d’hôte menu suitable for a

three-star hotel restaurant.

• The menu should offer three courses and up to three

choices per course.

• This will be a fixed price menu you need to ensure

that all dishes will provide the desired contribution
margin.
 Traditional Menu Sequence
1. Hors-d oeuvre A small amount of each variety being placed on the plate to make up a
portion.
Examples include: Fruit cocktails, shellfish, smoked salmon
2. Soups Soups like clear soup(consommé) and the other a thick soup (crème,
velouté, puree) are served during this course. Although it must be noted
that the clear soup is always placed first on the menu
3. Farinaceous This includes different kinds of rice and pasta. Pasta dishes are spaghetti,
lasagne and gnocchi. There are more than 200 varieties of pasta. The
ingredients, size, shape and colour determine the type of pasta.
4. Eggs There are many styles of cooking and preparation of eggs such as boiled,
en-cocotte, poached or scrambled.
5. Fish Fish, being soft-fibred, prepares the palate for the heavier meats that
follow. Ideal fish for dinner menu compilation are: Sole, Salmon, Halibut,
Escallops, etc. Rarely seen on a menu for the evening meal are Cod, Bass,
Haddock, Brill, Hake, and Plaice
6. Entrées The first of the meat courses, Entrées is generally small, well-garnished
dishes which come from the kitchen ready for service. They are always
accompanied by very rich gravy or sauce when relive follow entrée then
potatoes and vegetables are not served with the latter; if, however, a
reliever does not follow the entrée they would be served with the dish.
7. Sorbet The sorbet counteracts the previous dishes and rejuvenates the appetite
for those that are to follow. It is water and crushed ice slush flavoured as
a rule with champagne and served in a glass.
7. Roasts The main meat course on the menu, larger than entrees and take the
form of butcher’s joints which must be carved. These joints are normally
roasted. A sauce or a roast gravy with potatoes and green vegetables are
always served with this course.
8. Grills Grills always contain roast of game or poultry: – chicken, turkey, duck,
pheasant, quail. Each dish is accompanied by its own sauce and gravy,
with a green salad served separately on a crescent shaped dish. Beef
fillet, lamb chops, pork chops are examples
9. Cold buffet Fish, meat, pâtés, mousses
10. Vegetables Vegetable dishes served only with their accompanying sauce. These are
vegetable dishes that can be served separately as an individual course or
may be included along – with the entrée, roast or grill courses.
11. Savouries A dish of pungent taste, such as anchovies on toast or pickled fruit. They
are served hot on toast or as savoury soufflé. Welsh rarebit, Scotch
woodcock, Canape Diane are some of the examples
12. Sweets Hot or cold puddings, flans, Pastries, Ices etc.
13. Cheese Selection with biscuits
14. Dessert Fresh fruits of all kinds
 Other food and beverage menus/lists

• Food o wine lists

o breakfast menu (full/restricted)
o afternoon tea menu o bar list
o room service menu o cocktail list
o lounge service menu o after-meal/digestifs
o airline tray service and o room service list
rail service menu o lounge service list.
o tasting menus.
• Drink
 Activity

A full wine list should contain a lot of information to

assist the customer in making their choice.

Use the internet to research wine lists and explain the

different types of information that should be included
on a wine list.
 Menu merchandising

• Efficient merchandising of menus can impact on the

demand for food and beverage products and
facilitates

• Menu merchandising can influence the selection of

certain items, which will impact on sales mix and
profit

• Merchandising can be done externally to attract

customers into the establishment or internally to
influence choice.
 Activity

The methods of menu merchandising are given

below. Describe how they are used providing
examples from different food outlets.

• Floor stands
• Posters
• Wall displays
• Tent cards
• Clip-ons
5. An Overall
View of Food and
Beverage Control

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 What is food and beverage control?
• Food and beverage control may be defined as the guidance
and regulation of the costs and revenue of operating the
catering activity in a food and beverage establishment.

• The cost of food and beverage can range from 25% to up to

50% depending on the type of operation. In restaurants,
food and beverage can be the only source of revenue

• The amount of control is related to the size of the operation.

A large group operation would require a much more precise,
detailed, up-to-date information, than a small operation.
 Objectives of a control system.

• Analysis of income and expenditure :

• Establishment and maintenance of standards

• Pricing
• Prevention of waste

• Prevention of fraud

• Management information
 Special problems of food and beverage control

Perishability of the product: food, whether raw or cooked, is a perishable

commodity and has a limited life

Business volume unpredictability: sales instability is typical of most catering

establishments. There is often a change in the volume of business from day to
day, and in many establishments from hour to hour.

Menu mix unpredictability: In order to be competitive and satisfy a particular

market, caterers must often offer a wide choice

Food and beverage operation short cycle: the speed at which catering
operations take place, relative to many other industries, allows little time for
many control tasks.

Departmentalisation: many food and beverage operations have several

production and service departments, offering different products and operating
under different policies.
 Planning Operational

Financial
Purchasing
policy

Marketing
Receiving
policy

Catering Storing
policy and issuing

Preparing

The fundamentals of control Selling

 Management control after the event phase

The final phase of food and beverage control is in three main stages:

• Food and beverage cost reporting: variations in demand for the

product necessitate up-to-date reporting at least weekly if not daily

• Assessment: the analysis of the food and beverage reports and to

compare them with the budget for the period and against previous
actual performance

• Correction : when the analysis of the performance of a unit or

department identifies that there is a problem, it is up to management
to take the necessary steps to correct the problem as quickly as
possible.
 Reality of control
No matter how effective a control system may be there are certain
realities that do not allow for any system to be 100% efficient.

• The material product (apart from purchased beverages) is very

unlikely to be 100% consistent as to quality or the final yield
obtainable from it.

• The employees are unlikely to work to a level of 100% efficiency,

despite any operational standards may exist.

• The equipment used is unlikely to work to the level of 100%

efficiency, and this could well affect the yield obtainable.

• The customers ’ choice of dishes can well be different at times to

some of the budgeted sales mix, therefore affecting all forecasts.
 Activity
• Think back to the special problems of food and
• beverage control.

For each of these explain at least one way that the issue can be
minimised

Example: Departmentalisation
Treat each department as a separate business to be able to show income and
expenditure. This will enable the manager to more easily identify issues.
Ensure standardisation of policies across each department. This will ensure
that all control measures are applied equally.
6.Financial
Aspects

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 Budgets
In order to have an effective food and beverage control
system a manager needs to have benchmarks where he/she
can compare the operations performance.

In order to do this a budget is set. A budget is a plan

expressed in financial and/or quantitative terms (e.g. total
value of payroll, number of customers, etc.) which reflects the
policies of an establishment and determines the business
operations for a particular trading period.

The trading period is usually one year but is broken down into
checking period of 12 monthly or 13 four-week periods.
The term budgetary control refers to a method of control where
responsibility for various budgeted results is assigned to managers and
a continuous comparison of the actual results and budgeted figures is
made.
There are three objectives of budgetary control:

• To provide a plan of action for a set trading period, that guides

and regulates a business in keeping with its stated policies,
and to maximise the full use of its resources.

• To set standards of performance for management against

which their performance can be measured.

• To set out levels of cost responsibility and encourage cost awareness.

There are two main types of budget; capital budgets and
operating budgets.

• Capital budgets, are concerned with the assets and liabilities

of an establishment, for example equipment, plant and cash.

• Operating budgets are those concerned with the day-to- day

income and expenditure of an establishment and include
sales, cost of sales, labour, maintenance, head office
expenses, etc.

• The operating budget is the type of budget that food and

beverage managers will be mostly concerned with when
looking at the food and beverage control system.
 Basic stages in the preparation of budgets

Budgets are formed in six stages. The amount of detail and sub-division into
departmental budgets depends on the type and size of the business.

The basic stages are:

1. Determination of the net profit required for the business in relation to the
capital invested and the risk involved

2. Preparation of the sales budget : This determines the volume of sales

necessary to achieve the desired net profit and influences the budgeted costs
for food, beverages, labour and some overheads

3. Preparation of administration and general budgets : These are for such

items as head office expenses, advertising, rates, insurance, etc. Some of
these are regarded as fixed budgets, others are regarded as variable budgets.
4. Preparation of the capital expenditure budget which
makes provision for items of expenditure e.g. new
kitchen equipment or restaurant and bar furniture

5. Preparation of the cash budget : This predetermines

the cash inflows, the cash outflows and resulting cash
balance at specific points during the period.

6. Preparation of master budgets : As stated previously

master budgets are prepared for the trading account,
profit and loss account and the balance sheet
 Costs, profits and sales

Materials
The cost of operating a 30%
catering unit or department Labour

Total cost 80%

is usually analysed under 30%
Overheads
the three headings of the 20%

Sales 100%
elements of cost:

• Material
• Labour Net profit
• Overheads 20%
1. Material costs – cost of food and beverage consumed less the
cost of any staff meals. The food cost is calculated by the formula:

opening stock
+ cost of purchases material = material cost
- cost closing stock
- cost of staff meals

2. Labour costs – wages and salaries paid to all employees, plus

any employer contribution to government taxes, bonuses,
staff meals, pension fund, etc.

3. Overhead costs – all costs other than material and labour costs,
for example rent, rates, insurance, depreciation, repairs, printing
and stationery, china and glassware, and capital equipment.
 Types of Cost
1. Fixed costs : These are costs which
remain fixed irrespective of the volume
of sales, for example rent, rates,
insurance, the management element of
labour costs

2. Semi-fixed costs : These are costs

which move in sympathy with, but not
in direct proportion to the volume of
sales. Semi-fixed costs contain a fixed
and variable cost element

3. Variable costs : These are costs which

vary in proportion to the volume of
sales, for example food and beverage

4. Total costs : This is the sum of the Illustration of how sales impacts on costs
fixed costs, semi-fixed costs and
variable costs involved.
 Types of Profit

There are three main kinds of profit in food and beverage

operations:

1. Gross profit  total sales – cost of materials

2. After-wage profit (or net margin)  total sales – (material

& labour costs).

3. Net profit  total sales – total costs (material, labour,

overhead costs)
 Break Even Analysis
Break-even analysis is an important aspect of business management and
budget setting. Break even helps the business determine the cost structures,
and the sales that are needed in order to cover the costs or make a profit

The calculation for the break-even point can be done one of two ways:

1. determine the amount of units that need to be sold (can be used for
room sales)

2. calculate the amount of sales that are required ( the usual standard for
food and beverage management)

The break-even point allows a company to know when it, or one of its
products, will start to be profitable.
 Pricing Considerations
Menu pricing needs to fulfil two needs, the need to make adequate
profits and for the and the need to satisfy customers wanting value
for money. There are several different pricing models:

• Cost plus pricing – which takes the ingredient or food cost

element of a menu item and simply adds a predetermined
multiplier or mark up.

• Competition pricing - copies the prices of competitors

• Rate of return pricing – which attempts to establish a break-even

matrix based on predicted costs and sales.
 Pricing Considerations
• Elasticity pricing – which considers the market and its sensitivity to price
change.

• Backward pricing – which considers what the customer or market will bear
in terms of price.

• Prime cost – which attempts to calculate labour cost in addition to food

cost and actual cost attempts to include overheads.

• Departmental profit margins – where different profit margins are applied

to different departments

• Differential profit margins – where different profit margins are applied to

different food and drink items
 Other Considerations
When pricing items or menus, the following also ned to
be taken into consideration and added where
appropriate.

• Sales tax
• Service charge
• Cover charge
• Minimum charge
7.Purchasing

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 What is purchasing?

Purchasing can be defined as ‘a function concerned

with the search, selection, purchase, receipt, storage
and final use of a commodity in accordance with the
catering policy of the establishment’

The purchasing function as is vitally important in the

control cycle. Should it be managed inefficiently it
creates problems that often result in an unsatisfactory
level of both costs and profit for the establishment and
dissatisfied customers.
 Policies

Control Menu

Volume
Selling
forecasting

The Purchasing Function/Procedure

Production Requisition

Storing Purchasing

Receiving
 Duties of the purchasing manager

• Responsibility for the management of purchasing/ procurement and

keeping purchasing records, recording the receiving and correct
storage of goods.

• The purchasing of all commodities within their responsibility.

• Ensuring continuity of supply of those items to user or departments.

• Finding cheaper (for same quality) and more efficient sources of

supply where this forms part of the job role.

• Keeping up to date with all the markets being dealt with and
evaluating new products.
 Duties of the purchasing manager cont…

• Research into products, markets, price trends, etc.

• Co-ordinating with production departments to standardise

commodities and therefore reduce stock levels.

• Liaising with production, control, accounts and marketing

departments.

• Reporting to senior management usually through establish

communication channels.
 The selection of a supplier

With global markets and competitive pricing selecting a supplier

should be given careful consideration.

Seeking a new supplier requires caution and detailed enquiries

need to be made in at least the following areas:

• Full details of the firm and the range of items they are selling
• A copy of recent prices lists
• Details of trading terms
• Details of other customers
• Samples of products.
 Aids to purchasing
• The supply trade press : published weekly and cover most of the commodities to be purchased.

• The commodity trade organisations : provide information to caterers about a particular

commodity, such as the types available, how they should be stored and names of local and
national suppliers.

• The catering trade press : these contain items of commodity news and information of present
and future prices.

• The national press : publish commodity market news with details of the range of prices being
paid in certain markets.

• Government publications : available from agricultural departments giving a variety of information

including availability of specific commodities and current food legislation.

• Published price indexes : produced by government departments, consumer associations and by

trade journals. These monitor the change in prices from that initial period, also recording
changes on a yearly and monthly basis.
 Purchasing of foods
There are seven main buying methods that may be used for
purchasing foods.

The method chosen often depends on the location of the

establishment, the type and size of the business, its purchasing
power and the type of food being purchased.

• Purchasing by contract or tender: This relates specifically to

large scale catering operations.

The organisation will advertise the tender in the trade press.

There are two common types of contract used:

1. The specific period contract: that aims at

determining the source of supply and the price of
goods for a stated period. Items with a stable price,
such as milk, cream, bread, etc. can be contracted in
this way.

2. The quantity contract: that aims at ensuring

continuity of supply of a given quantity of an
essential item at an agreed price over a particular
trading period.
 Other purchasing methods
• Purchasing by cash and carry: This method is of particular interest
to the medium and small establishments whose orders are often
not large enough to be able to get regular deliveries from
wholesalers and food manufacturers.

• Purchasing by paid reserve: this method is used when it is

necessary to ensure the continuity of supply of an item for the
menu. Large catering companies may purchase the entire output
from one supplier or group of suppliers.

• Total supply: is a method offered only by a few major suppliers

who can offer a full supply service of all commodities to caterers.
 Purchasing beverages
Purchasing beverages is not the same as purchasing food.

1. There are fewer and often restricted sources of supply.

2. The high value of beverage purchases so consideration of stock holding size,

value/cost and security are important issues.

3. Quality factors are difficult to evaluate and require special training to identify them.

4. There are fewer standard purchasing units which makes pricing and stock control
more straightforward.

5. There is an established standard of product

6. The prices of alcoholic beverages do not fluctuate to the extent that food prices do.
 Purchasing specifications
A purchase specification is a concise description of the quality,
size and weight (or count) required for a particular item.

Each specification would be particular to an establishment and

would have been determined by members of the management
and purchasing teams with reference to the catering policy, the
menu requirements and its price range.
The reasons for preparing specifications are:

1. They establish a buying standard of a commodity so that a

standard product is available for the kitchen and restaurant to
prepare for the customer.

2. They inform the supplier in writing precisely what is required,

and it assists the supplier in being competitive with pricing.

3. They provide detailed information to the goods received clerk

and the storeman as to the standard of the foods to accept.

4. They make staff aware of the differences that can occur in

produce, for example, size, weight, quality, quantity, etc.
 Activity

• Consider an item of meat, fish or cheese that you wish to buy

on a regular basis.

• Write a purchase specification for that item.

• Give this specification to another member of your class and

ask them if they feel confident of buying the right item.
8.Receiving,
Sorting and
Issuing

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• Unless the receiving department in a catering organisation operates
efficiently, it becomes the weak link in the food control cycle and
reverses all effort in the rest of the control cycle.

• It may also pose problems in meeting the requirement of the

organisations HACCP policy.

• It is important to realise that all goods being received into an

establishment have a monetary value and that it is essential to ensure
that exactly this value in goods is properly accounted for and received.

• It is also important to remember that often these goods will have a

selling value several times their original purchase in price in a matter
of hours and most certainly come within the requirements of food
temperature control regulations.
 The receiving/good in department should ensure:

• The quantity of goods delivered matches the quantity that has been ordered. This
means weighing or counting.

• The quality of goods delivered is in accordance with the specification stated.

• The prices where stated are correct.

• When goods are not in accordance with the purchase order or an item is omitted
from the order, a credit note is provided by the driver

• An accurate record is made on the delivery note of the delivery including

temperature and condition of packaging.

• Goods should be decanted into clean storage containers where appropriate.

• Goods should be stored correctly

 Storing and issuing
• The main objective of a food store is to ensure that an
adequate supply of foods for the immediate needs of the
establishment are always available.

• Food storage comes under food safety. regulations and

forms part of the organizations HACCP policy.

• The basic goal of storage management is to prevent loss of

merchandise due to: (1) theft, (2) pilferage and (3) spoilage.

• Issues may require a requisition note

 Storage
• Foods can be categorised as perishable and non-perishable items.

• The perishable items are stored in either refrigerators or cold rooms depending on
the item.

• Correct temperatures must always be maintained

• Care must be taken to ensure that different foods are stored separately to reduce the
risk of cross-contamination

• In smaller establishments, where space is limited, separation can take place in fridges
e.g. raw meat on bottom, cooked meats above

• non-perishable items e.g. canned foods go to a ‘dry’ food store to be unpacked,

checked for any damage and placed on racking.

• The layout for the stores will vary between organisations but should facilitate ease of
use and may include electronic stocktaking.
 Stocktaking
The main objectives of taking stock are:

• To determine the value of goods held in stock

• To compare the value of goods in the stores at a given time

• To list slow moving items

• To compare the usage of food with food sales

• As a deterrent against loss and pilferage

• To determine the rate of stock turnover for different groups of

foods.
 Storing and issuing beverages
• The cellar is usually the main storage area for spirits and red wine

• The cellar should be dry and draught-free and hold a temperature of 55°F–60°F
(13°C–16°C)

• A refrigerated area of 50°F (10°C) for the storage of white and sparkling wines

• A further refrigerated area of 43°–47°F (6°C–8°C) is necessary only when the

turnover of kegs is slow, otherwise they may be stored at 55°F–60°F (13°C–16°C)

• An area held at a temperature of 55°F (13°C) for the storage of bottle beers and
soft drinks

• A totally separate area, from those above, for the storage of empty bottles, kegs
and crates.
 Cellar records

• Cellar records book

• Bin cards
• Cellar control book
• Beverages perpetual inventory ledger
• Ullages or breakages
• Empties return book
• Hospitality book
 Activity

The different cellar records have been listed on

the previous slide

Use the internet to research the purpose of each

of these records.
9. Food and
Beverage
Production

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 What is food production?

Food production may be defined as that phase of

the food flow mainly concerned with the
processing of raw, semi-prepared or prepared
foodstuffs.

The resulting product may be in a ready-to serve

state or it may undergo some form of
preservation before being served to the customer.
 Planning of food production methods

The planning of food service and production facilities is more

complex than many other types of planning projects. This is due
to some of its unique characteristics, including the following:

1. The variety, choice and grades of raw materials available.

2. The high perishability of some raw materials.

3. The variety of semi-prepared and prepared products available.
4. The perishability of the end product.

5. The fast turnover of some foods.

 Planning of food production methods

6. The product is rarely taken to the customer, the customer must go

to the product to purchase it, and consume it, usually on the premises.

7. The product cannot be stored for any length of time.

8. A wide variety of customers may be catered for within the same

establishment.

9. There may be a variety of production and service methods in

operation in any one outlet.

10. The process must comply with the HACCP policy.

 Methods of food production

• Traditional partie method: in the main food is

purchased raw and is processed for the various
service sessions e.g. breakfast, lunch, dinner

• Conventional production with convenience foods:

the use of all or some convenience foods that are
cooked to order
 Methods of food production

• Centralised production: which involves the separation of

the production and service components. Food that is
centrally produced is either then distributed to the point
of service in batches or is proportioned. It may be
transported in a ready-to-serve state or it may need some
form of regeneration in a satellite or end-kitchen.

• Cook-freeze: which is a system based on the full cooking

of food followed by fast freezing, with storage at a
temperature of  -18°C or below. Food is reheated prior to
consumption. Cook-freeze is a complete food production
process from the initial raw food through to the final
service of the product and is largely done by food
manufacturing companies rather than by caterers
 Methods of food production
• Cook-chill: which is a catering system based on the full cooking
of food followed by fast chilling, with storage between 0°C and
3°C. Food is reheated prior to consumption. It has a short shelf
life compared to cook-freeze of up to five days including the
day of production, distribution time and regeneration

• Sous-vide: this food processing technique was developed by

the French in the late 1970s to reduce shrinkage in foods while
maintaining the flavour. The system involves the preparation of
quality raw foods, pre-cooking (e.g. browning) when necessary,
putting the raw foods into special plastic bags or pouches,
vacuum sealing the pouches and then steam cooking to
pasteurization temperatures.
 Activity

The different methods of food production have

been identified on the previous two slides.

Choose one of these systems and fully describe

the processes employed and the advantages and
disadvantages of the system.
10. Food and
Beverage Service
Methods

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 What is food service?
• Food and beverage service can be defined as
the presentation of the food to the customer

• It is the final stage of the food/beverage flow

Purchase Production Service

 Different service methods

There are several different service methods:

• Self-service • Waiter service

• Traditional cafeteria • Counter or bar service
• Free-flow cafeteria • Table service
• Carousel • Banquet
• Vending • room and lounge
• Carvery service
• Buffet • Drive-in
• Take away/take-out • Tray/trolley service
 Table service
There are several different styles of table service:
American The guest’s meal is portioned and plated in the kitchen, brought into the
restaurant by a waiter and placed in front of the customer
French Involves preparing food in the kitchen, arranging it on silver salvers that are then
brought into the dining room and placed on a small cart called a gueridon . On
this gueridon is a small heater called a réchaud , used for heating or flaming the
guest ’s food, which is then served from the silver salvers on to the guest’ s plate
and placed in front of the guest.
Russian Commonly referred to as silver service; the food is prepared and portioned in
the kitchen and placed on to silver salvers, which are then taken into the
restaurant. A dinner plate is placed in front of the guest and the food is served
on to the guest’s plate.
English The least common of all the table service methods. Food is prepared in the
kitchen, but not portioned, instead the complete joint of meat is presented to
the guests before carving. The host or one of the service personnel then carves
and portions the meat and places it on to a plate with the vegetables, and the
plate is then placed in front of the guest.
 Activity

Think about all the different food service methods.

Provide a description for each of these.

For each food service method, provide an example of

an outlet where the method is used and explain why
the outlet uses that method.
11. Food and
Beverage
Production
Control

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 Stages of Food Production Control

Food and beverage production control consists of

four basic stages which together should reduce
wastage and costs associated with over-production.
These are:

1. Production planning
2. Standard yields
3. Standard recipes
4. Standard portion sizes
Production planning, or volume forecasting is the forecasting of the
volume of sales for a specified time period, for example a day, a week or a
month. The aims and objectives of production planning are as follows:

• To facilitate food and beverage cost control.

• To facilitate the purchasing of items, particularly perishable ones, and

ensure appropriate stock levels are maintained.

• To reduce the problem of food that is left over and how it is to be re-
used, customer dissatisfaction when insufficient foods are available

• To gear production to demand by forecasting the number of meals and

drinks to be served for a given meal period.

• To enable a comparison to be made between actual and potential

volume of sales, and for corrective action to be taken if necessary.
Standard yields: The standard yield of a particular food product is the usable part
of that product after initial preparation, or the edible part of the product after
preparation and cooking.

The development of standard yields by an establishment has several advantages:

• they determine the most appropriate and advantageous size/weight to buy a

commodity in.

• they help to determine the raw material requirements for the production levels
anticipated from the production forecasts,.

• they act as a ‘double check ’ for the purchasing department

• they act as a safeguard against pilferage or wastage as the actual and potential
yields can be compared

• they help to accurately cost food for dishes, as the cost factor can be established.
A standard recipe: is a written method for producing a particular menu item. They specify the
name and quantity of the item to be produced, the ingredients, the method of preparation and
often the method of presentation. They have several advantages:

•accurate food and beverage costings can be determined for dishes/drinks

•help to know the precise nutritional value of the dishes

•Aid purchasing and internal requisitioning by allowing accurate goods to be ordered/released

•act as a reminder to present staff of the preparation procedure,

•act an an aid to the training of new employees.

•ensure that the customer will always receive a standardised product.

•aid menu planning, new additions to the menu can be accurately costed and balanced with the
other items on the menu, in terms of price, appearance, flavour, colour

•they may be used as a basis for compiling standard portion sizes which, if used in conjunction
with standard recipes and standard yields, will together form the basis of a very effective
production control system.
Standard portion sizes: these are the quantities of a food item that will be
served to the customer. The quantity can be measured in weight or be a
numerical quantity. Standard portion sizes in the operation may be
established in several ways:

• By buying in pre-portioned food items

• By buying in food items in bulk and portioning them in the production

kitchen

• By portioning food items as they are being served to the customer.

Once the standard portion size has been established the gross profit may be
calculated for that dish. Any fluctuations in the sizes of the portions will
therefore be reflected in the gross profit, particularly so if this is occurring
with several menu items.
 Beverages

• Standard recipes and standard portion sizes for beverages are

easier to control than those for food products.

• With some beverages, the portion sizes is the bottle size.

• Other beverages such as spirits need to be measured before

being poured into the customer’s glass.

• Another aid to control the portion size is to use standard

glassware for specific drinks.

• In the UK, alcohol measurements are specified by law

 Activity

Calculating the selling price of beverages is more

straightforward than food.

Download the ‘Beverage Costing’ document and

complete the exercises.

Discuss your answers.

12. Food
Controlling

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 Objectives of a control system.

• Analysis of income and expenditure :

• Establishment and maintenance of standards

• Pricing
• Prevention of waste

• Prevention of fraud

• Management information
 Essentials of a control system
• Any control system should be comprehensive and cover all the
outlets of an establishment and all stages of the food control cycle.

• The cost of maintaining the system should be in relation to the

saving to be made

• The control system should be easy to operate and to be understood

by all levels of staff.

• The control system should be seen by staff to be working

• To be effective the information produced must be accurate and up-

to-date.
 Methods of food control
Depending on the size of the operation food control methods may be automated
or manual. The basic tools that enable the correct functioning of the inventory
control cycle are:

Purchase order : completed by the chef or purchasing manager, these forms are
often in triplicate with one copy for the supplier one for the accounting and one
remains with the chef.

Delivery note : issued by the supplier and delivered together with the goods to the
operation.

Invoice : issued by the supplier and normally send directly to the accounts
department.

Requisition : issued by the kitchen to the storeroom requesting the issuance of

goods.
These are supported by:

• Weekly/monthly food cost report

• A daily food cost report
• A detailed daily food cost report
• Calculation of the potential food cost
• Food control checklist
o Menu
o Purchasing, receiving, storing and issuing procedures
o Food production
o Food service
o Food production procedures
 Activity

The basic tools of the control cycle were defined earlier. Using
these definitions for reference, describe how each of these
documents can help to control food.

• Purchase order

• Delivery note

• Invoice

• Requisition
13.Beverage
Controlling

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 Methods of beverage control

• Bar cost system

• Par stock or bottle control system
• Potential sales value system
• The millimetre system
• Banqueting and function bar system
• Automated beverage dispensing system
 Beverage control checklist

Check and marry up all delivery notes, credit At set periods complete a full inventory of all
notes, invoices and goods received report. chargeable containers, for example crates, kegs,
soda syphons, etc.

Check arithmetic to all paperwork. At set periods complete a full inventory of cellar
and compare to beverages perpetual
inventory book.

Check correct discounts are being allowed. Prepare a stocktaking report of value and type of
goods, rate of stock turnover, etc.

Check delivery notes, etc. to cellar inwards book. At set periods complete a full inventory of the
stock of each bar for beverage control reports.

Maintain beverages perpetual inventory book. Maintain daily and to-date beverage control
reports, the amount of detail depending
on the size of the unit and the volume of
business.

Maintain container charges and credits for period Prepare end of period beverage reports for
inventory. management and highlight any problem areas for
corrective action.
14. Revenue Control
– Control Systems –
Operating Ratios

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 Systems of revenue control
There are two basic approaches to recording and
controlling food and beverage sales.

• 1. A manual system – which is commonly used in

small and in exclusive type catering units

• 2. An automated system – which is commonly used in

units with several outlets, in units with a very high
volume of business and in up-to-date companies
with many units.
 Manual system
Sales checks: one of the simplest steps to take when attempting to
establish sales control procedures is to require that each item
ordered, and its selling price are recorded on a waiter ‘s sales check.

Using some form of a check system serves the following functions:

• To remind the waiting staff of the order they have taken.

• To give a record of sales so that portion sales and sales mixes and
sales histories can be compiled.
• To assist the cashier and facilitate easy checking of prices charged.
• To show the customer a detailed list of charges made.
An additional aid is to use numbered checks and control these
tightly, recording all cancelled and missing checks.

Duplicate or triplicate checks are the best aid to control as they:

• They provide the kitchen, buffet or bar with a written record

of what has been ordered and issued.

• They authorise the kitchen, buffet or bar to issue the food

and/or beverage.

• They provide the opportunity to compare the top copy of the

check with the duplicate to ensure that all that has been
issued has been charged and paid for.
 The role of the cashier

To issue check pads to the waiting staff prior to To complete any ‘missing’ checks on the
a meal period, recording the numbers of the missing checklist for each meal period.
checks issued in each pad, and obtain the
waiting staff ’s signature for them. Signing for
the receipt of those returned.
To check the pricing, extensions and subtotals To complete the restaurant sales control sheet
of all checks and to add any government tax for each meal period.
charges and to enter the total amount due.

To receive and check money, credit or, when To complete the necessary paying in of all cash,
applicable, an approved signature in payment etc. in accordance with the unit ’s established
for the total amount due for each check. practice.
 Machine/computerised systems

EPOS technology and windows-based software

specifically designed for the food and beverage
operation seem to have replaced every other
type of machine-based system.

However, older technology that still may be used

in some countries and is still used in very small
operations around the world.
• Pre-checking systems: similar in appearance to a standard cash register
and are designed to operate only when a sales check is inserted into the
printing table to the side of the machine.

• Pre-set pre-checking system: this is an up-date on the basic pre-check

machine. The keyboard is much larger than the previous machines, and
has descriptive keys corresponding to all items on the menu which are
pre-set to the current price of each item.

• Electronic cash registers (ECR): these are very high-speed machines

which apart from printing the customer bill they can provide basic
reports such as sales by type of product, payment method, etc.

• EPOS control systems: at a basic level, a point-of-sale control

system is no more than a modern ECR with the additional feature
of one or several printers at such locations as the kitchen or bar.
 Operating ratios
The following at useful calculations that can be carried out to determine the
success or otherwise of any hospitality outlet.

• Total food and beverage sales: the total food and beverage sales should be
recorded, checked and measured against the budgeted sales figures for the
period

• Departmental profit: departmental profit is calculated by deducting the

departmental expenses from the departmental sales.

• Ratio of food/beverage sales to total sales: food and beverage sales separated
from each other and to express each of them as a percentage of the total
sales.

• Average spending power: this measures the relationship between food sales
and beverage sales to the number of customers served.
 Operating ratios cont…
• Sales mix: this measures the relationship between the
various components of the total sales of a unit

• Payroll costs: these are usually expressed as a

percentage of sales

• Index of productivity: is calculated by the formula:

sales
payroll
• Stock turnover: is calculated by the formula:
rate of stock cost of food or beverages consumed
turnover average stock value at cost
 Operating ratios cont…
• Sales per seat available: This shows the sales value that can be
earned by each seat in a restaurant, coffee shop, etc.

• Rate of seat turnover: This shows the number of times that each
seat in a restaurant, coffee shop, etc. is used by customers during a
specific period.

• Sales per waiter/waitress: each waiter/waitress will have a known

number of covers for which he/she is responsible. This would vary
depending on the style of food and beverage service offered.

• Sales per square metre 2: this is self-explanatory in that the space

of all selling outlets needs to be used to its best advantage to
achieve a desired turnover and profit.
Food and Beverage
Management in
different settings

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 Activity

This section covers the different ways food and beverages are delivered to customers in
different settings.

The aim of this section is to provide you with a range of the

different subsectors so you can carry out research on the differences in:

• financial implications
• marketing strategies
• product and service styles
• staffing requirements
• Technology used

One has been done for you, choose one more and repeat the exercise.
 The different sub-sectors
• Full-service restaurants and licensed retail
o Fine dining
o Bars, nightclubs and pubs

• Hotel restaurants and private clubs

o Hotel food and beverage outlets
o Dining rooms

• Fast Food
o Sandwich bars
o Popular catering (pizza/steak houses/bistro/brasserie, etc.)
o Take-away and home deliveries
o Coffee houses and Tea rooms
 Example: Fine Dining
• Definition: Fine dining restaurants are those establishments that offer very high
standards in all aspects of their operation – an extensive à la carte menu, silver
service, good quality facilities and décor, service accompaniments, etc. They can be
found in four- and five-star hotels or as free-standing restaurants

• Financial implications:

o fine dining restaurants have a high percentage of fixed costs.

o high fixed cost operations have a smaller margin of safety so drops in the volume of
sales would seriously affect the profitability of high fixed cost establishments.

o The average spend per customer in ranges from £50 to £120 or even more per
customer.

o The demand for those quality restaurants and hotels (specifically the à la carte
outlets) means demand is inelastic, this means that consumers buy largely the same
quantity regardless of price.
• Marketing:
o the market is small, so the target market is easily identified with advertising and
merchandising campaigns at this market level.

o USP’s are food quality and standard of service

o a Michelin star will increase demand levels and menu prices usually follow, some
restaurants will feature a celebrity chef as their executive chef.

o marketing must be subtle, advertising in quality magazines and newspapers, can

enhance the type of image the restaurant is trying to create.

o often the restaurant will hire a public relations company that has the expertise,
resources and networking to do just that.

• Technology:

o Electronic point of sale (EPOS) and mobile point of sale systems (MPOS) technology common
• Products and service styles: The higher the price of an operation, the more
elaborate and sophisticated the products and service style become

o fresh ingredients are the product, and the use of any convenience food stuff is
eliminated where possible,
o Extensive range of beverages, including cocktails and wines offered

o service styles can be dependent on the type of catering operation, and also on its
price level.

o plated service styles are popular, the chef can control the appearance of a plate in
the kitchen.

• Staffing
o the partie system is commonly used
o traditional front of house hierarchy
o a wine waiter with a commis might be present
o A general expectation of excellent personal, customer and service skills
• References: Davis, B., Stone, S., & Lockwood, A.(2008). Food and
Beverage Management. 4th ed. London: Routledge