Warragul Country Club in Victoria have achieved huge success in reducing their food cogs from the mid-30’s down to a consistent 28%. In the words of CEO Michael Hodge, they are now in “uncharted territory” and thanks to My Local Foodie have a system in place to keep them there.
We interviewed Tim Heatley, Head Chef to understand exactly how they did it.
MLF: FIRSTLY, WHY IS REDUCING YOUR FOOD COGS SO IMPORTANT FOR YOUR BUSINESS?
Tim Heatley (TH):It’s a no brainer. Your COGs tells you where your food operation is at. Keeping your cogs under budget ensures you maintain a healthy profit margin on your menus. It’s just the basics of running any kitchen so should always be the #1 thing you strive for as a Chef. And our COGs were seriously impacting our food operations’ profitability.
MLF: WHAT WAS THE CATALYST BEHIND UNDERTAKING THIS PROCESS TO REDUCE COGS?
TH: I was already familiar with My Local Foodie and the Costimator system as Sous Chef, and saw the potential it could have if utilised fully, which we weren’t at the time.
It also helped having your boss [CEO Michael Hodge] paving the way forward too. He was onboard with making necessary changes to protect our profits and maintain our customers’ overall experience with our venue.
Michael also engaged with Craig Cherry from The Loyalty Zone to help improve things from that angle. So it was a real time for change across the whole business, not just in the kitchen. The whole business from the top down was changing for the better.
MLF: TELL US HOW YOU WENT ABOUT IT?
TH: Jacob McNally [Sous Chef] and I set out to learn as much as we could. Working closely with Chris O’Callaghan [Client Success Manager at My Local Foodie] to better understand the Costimator system and how we could reset our setup to get our reporting right.
It was a real breakthrough the day we could see all the right numbers in one report. And they were accurate! It was the fresh start we needed to see things clearly.
MLF: HOW DID MY LOCAL FOODIE HELP YOU ACHIEVE THESE RESULTS?
TH: The training was the first step. But what helped us most throughout the whole process was the guidance and advice we got from My Local Foodie.
We had regular check ins with Chris [O’Callaghan, Client Success Manager at My Local Foodie] who kept us on track with the 5 Steps training. He put us on a Reboot Program and organised it all and set us tasks to do between each catch up. Chris would review what we’d done and offer us suggestions on how to do it better.
Chris and the Foodie team also did an analysis into what we’d been buying. And gave us recommendations on how we could buy better to save us money. We took them all up once we saw the numbers and we’ve not looked back since.
... what helped us most throughout the whole process was the guidance and advice we got from My Local Foodie.
MLF: WHAT WAS THE SECRET TO YOUR SUCCESS?
TH: It’s super simple… buying smarter. Knowing what your stock value is and buying only what you need from week to week.
In the past we’d been stock holding and buying food that we didn’t always need. We’re in a regional location so with the delivery challenges that brings, we had to learn to plan and place orders in advance. It’s ended up saving us a lot of money.
MLF: WHAT’S THE #1 THING YOU’VE LEARNED?
TH: Nowadays, we never make any menu changes til we run it through Costimator first to see the potential COGs and profit margin impact.
We fully cost up all Specials and trial them for a few months. If they tick all the boxes – selling well, priced right, means tested, products right – we consider putting it on the main menu.
MLF: WHAT WAS THE BIGGEST SETBACK, AND HOW DID YOU OVERCOME IT?
TH: Our regional location. We had to get into the habit of planning and ordering in advance to account for the 2 day delivery turnarounds with the right suppliers. Before that we were defaulting to our local suppliers for faster delivery which wasn’t sustainable anymore.
It took us a bit of time to get it right, and now we don’t think twice about it. Scheduling orders is just part of the weekly routine.
MLF: WHERE DID YOU GAIN EFFICIENCY IMPROVEMENTS?
TH: The first is the Menu Engine report in Costimator. It’s where we saw all our hard work fall into place, particularly with trialling new Specials. Being able to easily see our sales mix – what’s selling, what’s profitable – instantly, has saved us a lot of time.
It also gives us the confidence to run high cost items like steak on our menu under $40 for the plate. We know our customers love it, and the rest of the menu facilitates this by having the right mix of dishes.
The second is stocktaking. Our counts used to take us all day, now it takes 2 hours if that. It’s a good system that’s saved us a lot of time.
Follow the process, do the hard work properly and you’ll get rewarded with the results.
Then enjoy the ability to spend more time in the kitchen.
MLF: HOW MUCH DID YOU REDUCE LABOUR COSTS BY?
TH: Between Jacob [Sous Chef] and I, we’ve been able to cut down on admin time out of the kitchen. The fast stocktake has really helped with that.
Nowadays we spend about 5hrs total in a week, that’s between both of us, doing admin – that includes stocktaking, menus and recipes, ordering and invoicing.
MLF: WHAT’S THE BEST UPSIDE TO HITTING 28% COGS?
TH: Being told we’re allowed to spend more money. We’ve invested it in new kitchen equipment.
And we consciously choose to buy quality items like steak, because our customers love it and our menu’s sales mix can accommodate it.
MLF: WHAT’S THE BIGGEST POSITIVE TO YOU PERSONALLY WITH REDUCING COGS?
TH: Performing in my job consistently, and getting to keep my job during Covid-19.
The other highlight was being told by Accounts our food COGs are TOO low. They didn’t believe the numbers were right at first!
MLF: WHAT ADVICE WOULD YOU GIVE TO OTHER VENUES ON THE FENCE ABOUT USING THE 5 STEP METHOD TO REDUCE COGS?
TH: Follow the process, do the hard work properly and you’ll get rewarded with the results. Then enjoy the ability to spend more time in the kitchen.
MLF: ANYTHING ELSE YOU’D LIKE TO ADD?
TH: It’s a great system that’s made our lives easier. I don’t know how we’d go without it now.