Rising food costs, funds cuts, and Medicare/Medicaid cuts make it essential to operate food aid costs. In 30 years of working with condition care facilities, I’ve learned that controlling food aid costs is about being smart with your funds and operations so you can operate costs without cutting quality. Here are some steps you can take to operate food aid costs:
1. Track shop Trends. Track price increases so you can make changes as needed. Cost of living increases, increased competition for workers, and union increases will work on labor costs. Adjust food purchases and alter menus as needed based on price changes. The consumer Price Index (Cpi) forecast for 2012 predicts that food prices will be slightly above historical averages for the past two decades. Predictions include: All Food Index up 2.5 – 3.5%, Food Away from Home up 2 – 3%, and Food At Home up 3 – 4%. imaginable price increases in assorted food categories include: • Meats, poultry, seafood prices up 3.5% overall, with beef/veal up 4.5%, pork and poultry up 3-4%, and fish/seafood up 4-5%. • Egg prices up 2.5 – 3.5%. • Cereal and bakery prices up 4.5 – 5.5%. • Sugar and sweets prices up 2 – 3%. • Dairy prices (milk, cheese, ice cream, butter) up 3.5 – 4.5%. • Fresh produce up 3 – 4% overall, with fresh fruit and processed produce up 3 – 4%, and fresh vegetables up 3.5 – 4.5%.
Food Steps
2. Know Your Numbers. Understand your operation’s funds and profit/loss statements. Analyze statements weekly, monthly and quarterly. Your menu drives decisions linked to food purchases, labor/skill level needs, food cost, yield schedule, tool needs, buyer satisfaction, nutritional value, aid needs, and most importantly, your lowest line. Check prices on all menu items to assure costs are within the desired range, and use software systems to take immediate steps to operate costs.
3. operate Labor Costs. Track your meals/labor hour: Total Meals Served/Day รท Labor Hours/Day. The median meals/labor hour for hospitals and long term care facilities is 6-12. Track productivity and implement systems to assure efficiencies. Sell out absenteeism, and hold staff turnover to a minimum. For a ,000/year worker, turnover may cost as much as ,000 for a turnover rate of 25% (the national average).
4. Avoid Overproduction. The amount one cost leak in foodservice operations is over-production! Eliminate as much waste as possible. Ten extra meals a day adds up fast: .75 (food/labor/supplies) X 10 = .50/day x 365 days/year = ,687.50/year. Implement controls for preparation, service, and handling leftovers. Adjust recipes for the amount of servings nothing else but needed. Use yield records to document what and how much food is left, and the plan for use of leftovers. operate measure sizes and use standardized recipes. Train employees on proper portioning and provide the definite measuring utensils and equipment. Guide a plate waste study to rule which menu items need to be changed, and which portions can be reduced while maintaining buyer satisfaction.
5. Sell out The Price You Pay for Food. First, join a group purchasing club (Gpo) to save 5 – 10% or more on your food cost. If you are spending 0,000 per year on food, a 5% savings equals ,000 annually! Next, take these steps: a. Assure bills are paid on time. It’s like taking out a loan: the longer it takes to pay the bill, the higher the rates will be. B. Avoid poor purchasing habits that cause frequent trips to the local store. The median “store run” costs labor time to go to the store, plus the cost of paying man to do that person’s normal work, and the higher cost of sell goods. C. Sell out the amount of vendors and deliveries so the vendor can pass cost savings to you. Reducing orders also saves money by saving time to place orders, check in deliveries, put stock away, and process paperwork. D. Check in all incoming orders to assure you receive all items on the invoice, and all are in approved condition. E. Use suitable potential products for each menu/recipe item (Ex. You don’t need Grade A fruit for a fruited gelatin). F. Value the true cost of scratch versus convenience foods (include labor and waste in the equation). G. Study supplement costs. Have physicians write orders for “supplement per dietitian.” choose the most appropriately priced and well approved stock for your patients and/or residents.
6. Purchase Based on Yield. Use yield price (“as served” or “edible portion” cost) rather than Purchase price per unit as your determining factor in selecting a food item. Lower priced products often nothing else but cost more due to lower yield.
7. Eliminate Theft and Pilferage. If you spend 0,000.00/year on food and have a 5% theft rate, it costs your carrying out ,000.00 each year (and 5% is on the low side). Have checks and balances in place to decrease risk of theft. A. Implement an on-going definite perpetual and corporal account system. Keep account low and take quarterly corporal inventories. rule your true food cost: Food cost = beginning account + Purchases- Ending inventory. (Food purchased does not equal usage). Have a supervisor oversee the check-in and storage of all deliveries. B. Implement “back door policies”: Do not allow employees take food home. Do not allow employees to take breaks or come and go from an exterior door near the storeroom/freezer area. Store less tempting items (i.e., thickened juices) by the storeroom door and the more tempting items (coffee packets, cookies) farther away. Use only clear plastic trash bags. C. Keep storerooms and freezers locked (except when products are being put away or removed). Change locks and keys from time to time and always Change them whenever an worker who had entrance to the keys has left your employment.
8. Assure financial figures are accurate. When determining cost per meal, factor out extras such as staff meals, nutritional supplements, free coffee, extra functions and floor stock. These are not part of the meal cost. Consist of these “extras” as detach line items, and charge costs to the approved financial category.
By taking steps to keep your cost in operate can save you thousands of dollars each year without sacrificing potential of food or service.
8 Steps to recovery Thousands on Food Costs Each Year
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