Article

California Dreaming: Smoking Pig BBQ Company - San Francisco Bay Area, California

Paul and Jessica Reddick, owners of Smoking Pig BBQ Company, know a lot about barbecue. That wasn't always the case. The restaurant is a second act of sorts. Paul's first occupation involved electronics, which is not so surprising since they reside in California's Silicon Valley. Like a number of startup restaurant operators, Paul got into the business as a side hustle, running a small catering business in his backyard, making barbecue for parties and corporate events.

Paul and Jessica have since grown the business into a three-unit concept in several cities in California's San Francisco Bay Area, including Fremont and San Jose. Paul and Jessica spent nearly seven months perfecting his recipe making full-cut spareribs, brisket and pulled pork, day after day until they got it right.

California Dreaming...The owners wanted to boost their image and increase sales and profitability to offset rising labor costs in the wake of increased minimum wages. Can a physical menu achieve all that? Yes, it's not a dream.

If you ask the most successful restaurant operators what their key to success is, they will often put consistency at the top of the list. When you walk into any successful restaurant, what they serve and how they serve it will always be the same.

This is among Smoking Pig BBQ's strengths. And while some of the items are not offered in every location, when it comes to the brand-defining items like the concept's spareribs and burnt ends and brisket, each unit makes the product exactly the same, without exception. Great multi-unit concepts have been built on consistency.

Branding and profitability are also important to creating winning concepts. And where Paul and Jessica struggled was making their physical menu better represent their restaurants and elevating their brand with their menu. They also wanted to determine how to increase prices by 10 percent to offset increasing labor costs in California, where rising minimum wages cut into profits. Astutely, they recognized that they needed menu engineering to realize their true potential.

The average guest spends only about three to four minutes with the menu, so it is important that your menu make a good first impression and direct guests to the item you want purchased. This is true, whether you've been in business for a day or for a decade, but it is especially critical for the startup.

If you consider your menu simply a decorative price list, you're grossly underestimating its value. A menu is your most powerful merchandising tool. Everything that makes your restaurant special and profitable flows from the pages of your menu, including your atmosphere, concept, pricing and cost-control strategy, and service ethic.

The techniques of menu engineering are not overly complex, as business analytical techniques go. Nevertheless, it is an eye-opening experience in that many restaurateurs simply have not looked at their menus in this light, and quite frankly, are leaving money on the table. Menu engineering is a discipline, which is probably best led by a consultant, until the operator understands how to approach it. Once applied consistently in the restaurant, menu engineering can reap immediate increases in sales and, more importantly, profitability.

Secondary Research First

I approach menu engineering by reviewing what I call "secondary research"; essentially information that has already been gathered. It is research that is readily available. Think of it as taking a look around your neighborhood to determine what people are saying, not only about your business, but about all the restaurants in your market.

This would include demographics and food trends. Who's dining out? What types of food are they gravitating toward? For example, when we develop a summary of a business we're working with, we look to social media including TripAdvisor,Yelp, Facebook, Google, Zomato, OpenTable and the like.

When we looked at Smoking Pig BBQ Company reviews and posts, what we found was encouraging. Overall the restaurants had positive reviews with only a few negative comments that were mostly staff-related misunderstandings, with the food always bringing positive comments. One of the primary reasons we look to social media and review sites is to make sure we're not working with a company with product problems, because a well-engineered menu will kill a bad product quicker because it will induce trial, and if the product is bad, or inconsistent, guests will stop coming.

Primary Research Second

I am a big advocate of creating menu scatter graphs to visual what we call the "menu matrix", which provides a map of which of your items are most popular and profitable. The menu matrix is not as interested in your total food contributions as it is interested in which items bring a higher "plate contribution" or profit. Basic finance tells us, to succeed in business you need sales and profits. The menu matrix and scatter graph tell you which of your menu items are contributing toward your success.

I've provided below a sample scatter graph, which I created on a standard spreadsheet application available on any office computer. Other than the icons representing Star, Puzzle, Work Horse, and Dog menu items, which I will explain below, the sample graph was not made pretty for publication. I want you to understand that this process is something you can do easily and quickly on your computer.

To create a menu scatter graph or a menu matrix you need just three kinds of information. First, you need the theoretic food cost of each item, next, you need the number of each item sold over a period of time (we look for one to three months of data), and last, you need the menu price.

The vertical "Y" axis represents the margins for each item. The horizontal "X" axis represents the volume sold. For example, look at the point on the matrix represented by the "2 Ribs Combo" in the upper right corner of the matrix. In terms of profitability and volume of sales, it is the best performing item on the menu for this category, which includes the company's barbecue entrees. In the lower-left corner, we see the poorest performer in terms of both margin and sales, the "Hot Link Sammy".

The matrix then places each item you sell into one of four categories: "Stars", which are items with both above-average profits and sales (such as the "2 Ribs Combo"); "Puzzles", which are products with below-average sales but above-average profits; "Work Horses", which are products with above-average sales volumes but below-average profits; and "Dogs" (or "Dawgs"), which are menu items that are below average in both profits and sales volumes.

We recommend making a scatter graph for each category on your menu so you can see which appetizers, salads, entrées, etc. are working best for you. It compares "oranges to oranges" if you will. What we find is that when you make a scatter graph with everything in one big graph, popular categories like sandwiches and entrées will bury the appetizers and desserts, making it difficult to understand consumer behavior in your restaurants and figure out what you want to focus on.

Always Learning...

If you want to learn more about creating a menu matrix and the art of menu engineering, read:

We also offer a webinar on the subject at:

Recommendations

As I recommend for every restaurant concept, we developed a scatter graph for Smoking Pig BBQ Company to provide recommendations on how to create a menu that would bring the ten-percent increase in profits. These recommendations were carefully developed to ensure that the changes would not upset guests, and they would enhance the brand and consumer opinion of the food and restaurants.

In simple terms, the process involves using the menu matrix to determine the profitability and sales volume of each item on your menu, and then, figuring out a way to bring attention to the items that are contributing the most to your profitability. For example, is there anything you can do increase sales of your Puzzles, those items that are profitable, but lackluster in terms of sales volume? As I will explain below, menu design can influence profits and sales, in addition to boosting the image of your concept. I've provided "before" and "after" images of Smoking Pig BBQ's menu to accompany the information below.

Menu design and descriptions. The original menu we were working from looked homespun, but not in a good way. Sometimes a kitschy design can be appreciated for its irony, but in this case the menu just looked like it had been slapped together by an amateur designer on Microsoft Publisher. Also, the photos were not well shot and failed the "Would you eat that based on the photo?" test. When using photos, I recommend photos for items you want to sell more of, but only if the food in the photos looks good enough to eat. In this case it didn't, and so they would have been much better off not using the photos at all. On our recommendation, the photos were reshot.

The bigger problem was the product descriptions. There weren't any. This is a mistake I come across a lot in my business, especially in restaurants that are owned and run by chefs. Many restaurant operators spend small fortunes on their build-out, the lease, the foods themselves, staff training, and on and on, and yet, when it comes to the menu, they mistakenly think they can do it themselves, or worse, not do it at all.

Menu descriptions help sell the products on the menu, and they need to be written to appeal to women. This is not being sexist. Men and women are generally different diners. Women are more careful shoppers, they are more discerning about what they eat, and they spend more time reading the menu than men do.

And a well-written menu will do a couple of things. It will explain the method of cooking, it will tell the guest what's in the recipe and, more importantly, it will make the person want to order and eat the item. It is essential for every restaurant to offer a point of difference; in other words, its reason for being. The argument that your restaurant is better, different and special begins on your menu. The Smoking Pig BBQ Company is better, different and special, but its original menu didn't quite shout it from the rooftops. Paul and Jessica had a pretty good story to tell. They just weren't telling it.

Here's an example. On the original menu, the spareribs were described as either a quarter-rack or half-rack spareribs. Essentially, if you were selling a car, it would be like telling your customer it had four tires. And that was true for all of the main attractions on the menu. The BBQ chicken was simply a jumbo chicken leg quarter. The brisket was Angus beef brisket and so on.

On the new menu, we divided the menu into two sections for the main attractions. There is now the "What It Is!" section that describes why Smoking Pig spareribs are special, different and better. We told the story of why the chicken is better, and why the brisket is better.

So, where the original menu offered Angus Beef Brisket, the new menu offers Paul's 7-Month Brisket and tells the story of how Paul made brisket every day for seven months until he uncovered the secret to perfect brisket. The copy now reads:

That's right; we made brisket every day for 7 months before we would serve it to our customers. It had to be perfect. It's a point of honor for us to pit-smoke in hardwood, completely naked (the brisket, not the chef ) until it's perfectly tender and juicy. This is our signature item.

When you look at your menu, it's important to ask yourself this question: "What would I think I'm going to get when I order a product off my menu based on the description?"

Position, Highlighting, Anchoring and Number

Nothing on the restaurant's original menu was positioned correctly, nothing on the menu was highlighted, and there were no "mental anchor points" to help elevate check averages. (I will discuss the concept of "anchor points" below.)

Positioning. Like real estate, some locations on the menu are more valuable than others. We recommended that Smoking Pig BBQ place items in locations based on their plate contribution and volume, going back to our menu matrix.

On the new menu, you'll find the heavy entrées with the highest plate contributions at the top of the front page.

On top of the back page, we located the appetizers and "sammies", with the kids menu and salads towards the bottom of the page. In this way, we were able to place more emphasis on the items that offer a higher plate contribution while calling attention to bookends like appetizers and desserts.

Highlighting. We have found that highlights work best when there is a tan or dull background color with the highlights being whiter or lighter. On the Smoking Pig BBQ Company menu, we highlighted several items to help increase interest in those items. When consumers go into a restaurant, they have a question on their minds, and they want you to answer it for them.

They want to know what you recommend. Think about that for a moment. They want your advice on what they should spend their money on and put into their bodies. This gives you a lot of sway over what your guests ultimately order, and if you are not highlighting your menu correctly, you are missing a huge opportunity to grow your business, not to mention doing your guests a disservice.

Mental anchoring. The mental anchor points on the Smoking Pig BBQ Company menu almost didn't make it on to the menu. This happens a lot. If I had to guess, I would say that fewer than 25 percent of the restaurant menus I work on use mental anchor points (we offer them to every restaurant we work with, but few see their importance).

Mental anchoring on a menu is placing arbitrarily higher-priced items in strategic locations on the menu to encourage consumers to choose what they want to eat rather than how much is costs. An example of a mental anchor point on the Smoking Pig BBQ Company menu can be found in the chicken wings category. We offer a party-sized order of wings. It reads: Having a BIG party? We'll do a truckload for $189,000 (and we'll throw in the truck! 50 percent deposit required).

Of course, no one will order a truckload of wings with a truck. The only reason for this item to be on the menu is to provide perspective in regard to the price of other items on the menu. The $14.95 Quarter Rack looks like a deal compared to $189,000 for a truckload of wings.

Pricing. Smoking Pig BBQ's menu was priced pretty well. There were just a few inconsistencies in price points, along with products ending in 5s rather than 9s, which is a mistake many restaurant operators make. I recommend ending in 9s rather than 5s because the restaurant business is a pennies business. If you can make an additional four cents on every product you sell, and do it many thousands of times per week, it can make you a few thousand dollars per year.

That said, pricing a menu can be difficult, especially in a competitive market. While you want to get as much money as you can for everything you sell, you also don't want to upset your guests and have them leave and never come back.

When pricing your menu, keep a couple of things in mind. First, consumers don't seem to care or remember if you used 9s or 5s or just single dollar amounts on your menu. So take advantage when you price an item. If you need to get 11 bucks for a pulled pork sandwich, there are four price points to consider. The first is $11.99, which is essentially 11 bucks at first glance, but on further inspection, will become 12 bucks and may price the item out of being ordered on a regular basis.

The next price point is $11.49, which will move the product more quickly, but it's still over 11 bucks and will slow the product down just a little. Another option is just placing the price at $11, and that's a legitimate position to take, however, once you move to 11, 11.49 makes more sense because most consumers will not change their purchase behavior for 49 cents, so you may as well take the extra half dollar.

And finally, there is $10.99, which is essentially 11 bucks, but the product will move much more quickly. So the answer on how to price a menu item is based on these questions: Do you want the product to sell more quickly? Or do you just need it to generate a good plate contribution when you do sell it? Is the product a popular item? If it is, it may be able to pull the extra 99 cents.

How Did We Do?

At the time of this writing, Paul and Jessica have used the new menu in their restaurant for about six months. Guests have complimented the new look, and the restaurant indicates that featured items like the Smoking Pig Burger, Combination Plates and highlighted appetizers have shown a sales increase. Better still, the owners have realized a ten-percent increase in profits.