ASSIGNMENT COVER SHEET

Name Luis Felipe Anguita

Adress Denmark

Post code / Zip:

Telephone:

Email: [email protected]

Date: February 27th 2015

Course name: Level 4 HNC in Hospitality

Tutors name: Clive Findlay

Assignment name: Food and Beverage Operations Management

BTEC HNC in Hospitality Management Level 4

Assignment Unit 4 - Food and Beverage Operations Management

Luis F. Anguita

February 27th 2015

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Introduction

The Food and Beverage Manager is in charge of planning, controlling and troubleshooting all stages of the food and
beverage production and service, encompassing tasks and responsibilities that range from planning menus to health
and financial considerations. In this paper we will go through some of the main aspects of food and beverage
operations. We will also attempt to identify potential issues and if relevant make recommendations that might lead to
improvements.

Characteristics of food production and food and beverage service systems

Food production and food and beverage service systems are mostly regarded as a single delivery system. In fact they
consist of two separate systems operated at the same time.

 Food includes everything from fruits and sandwiches to highly sophisticated gourmet cuisine and it is
produced in different ways.
 Beverages are liquids for drinking. They can be served cold or hot on their own or to accompany meals.

Beverages
Cold drinks Hot drinks
Non
Alcoholic
alcoholic Coffee (e.g.
normal black,
capuccino,
Water, soft espresso,
drinks, fruit cafe latte,
and Wines, spirits macchiato,
vegetable (e.g. gin, mocha) teas,
juices, milk, tequila, milk, hot
smoothies, whisky, chocolate,
shakes, cold vodka, sake, Irish coffee,
tea, cold cognac) bouillon,
coffee, soy- liqueurs, wassail. egg
based drinks, beers, cider, nogg, and
energy cocktails, and more
drinks, sports more
beverages,
and more

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Food production

Food production includes a process that covers planning, purchasing materials, processing, storing and cooking.

Cooking methods are divided into several main groups:

Conventional

• Food is prepared and cooked on site and served immediately. A widely used method found in
restaurants and other food outlets of all sizes

Convenience

• Pre-processed foods that can be consumed fast and easily. Found both as ready meals, e.g. canned
or frozen that only need warming up or a few minutes in the microwave or as snacks like sandwiches,
wraps and take away foods.

Centralized
• This food processing method applies to foods prepared in one central kitchen from which is
distributed to multiple locations. Used by fast food chains and food services catering to schools,
retirement homes, airlines and hospitals. Centralized food processing in large quantities often means
significant lower production costs.

Cook-chill
• Flexible technique that consists in fully preparing meals and immediately chilling them to controlled
low temperatures that keep them fresh for as long as 5 days. They usually require re-heating before
serving..

Cook-freeze
• A process that consists in freezing foods within 90 minutes of cooking to a temperature of – 20
degrees Celsius allowing the foods to keep for several months, depending on the type of product. It is
important to keep it at constant temperature, including during transport, until the food is re-heated
and consumed.

Sous-vide

• Food is cooked in water bath machines inside vacuum plastic bags in for a long time (many hours) at
temperatures around 60-70 degrees Celsius. Foods retain or even develop enhanced flavours,
texture, tenderness and moisture. There is less shrinkage, thus providing higher yield. Preservation
of the foods is noticeably longer. They offer also some practical time saving advantages at the time of
garnishing plates and serving. The Sous-Vide cooking method helps to slow down the growth of
aerobic bacteria, but careful precautions are needed to avoid the risk from anaerobic bacteria that
causes botulism poisoning.

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Service systems

A variety of service systems are used whenever food and beverages are served away from home,:

 Non-profit establishments:
a. Schools,
b. Public institutions
c. Hospitals,
d. The Military
e. Businesses catering to their own employees
 Commercial or profit establishments:
a. Restaurants
b. Bars/Pubs
c. Hotels
d. Delis ,Self service outlets
e. Airlines, Trains

Common service systems used to serve food and drinks are:

 Table service – widely used, the waiter brings food and beverages to the guest’s table. Once they finish
their meal and leave, the servers clear and clean the table preparing it for the next guests. Sub-styles
under the table service system:
a. English – Food is brought to the table in bowls and platters. Meat is already carved and side
dishes presented separately. Guests help themselves to food portions according to taste. Casual
way of presenting food, also called family system because it is similar to the way families serve
dinner at home.
b. American – server takes customers’ order and brings it to the kitchen. When the food is ready
he/she brings it on individual plates to the guests’ table.
c. Gueridon or French – Dishes are prepared by the server at the guests’ table on a trolley e.g.
Crepes Suzette, Caesar salad or meats like Steak Diane.
d. Russian or Silver: food is arranged on platters by kitchen staff and carried by waiters to the table,
presented to the dining customers and served from the left side of each guest by servers onto the
individual plates. Popular service system at banquets.
 Buffet system – Various foods arranged onto platters, dishes and hot buffet servers in an eye-appealing
manner on a long table. Customers help themselves to foods of their choice. Buffets are often associated
with the all-you-can-eat concept. Suitable to serve many guests at the same time. Requires few staff.
 Cafeteria system – Dining area where customers select their food and drinks and place them on a tray
from a variety of items displayed on a counter. Dishes are ready to eat or there can also be additional
staffed stations where quick hot food can be ordered. No table service, only the minimum required to clear
and clean tables. Time saving service system often chosen by non-commercial establishments.
 Self Service outlets. Fast and simple service systems that provide ready to eat foods to customers who
do not have much time at their disposal.

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Beverage service systems

Beverage service systems

Counter
Table service
Service
Pubs, Bars,Pubs,
cafes,most Exclusive
restaurants Cafeterias,
restaurants
Self service

All drinks Guests help

Wines themselves
brought to brought to
table by to drinks at
table, counters or
waiters. opened and order them
Consumed server by at the bar.
on their special wine Consumed
own or waiter or with or
with a meal sommelier without
food

Factors affecting recipes and menus for specific systems

Planning and creating recipes and menus is affected by

different factors:

Objectives of the organization

Skills of kitchen staff

Quality and nutritional value goals

Size or organization

Availability of raw materials

Seasonal ingredients

Budget

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Cost and staffing implications for different systems

According to the type of business and system, costs and staffing considerations vary dramatically.

The food and beverage manager has to carefully calculate these costs and find an adequate balance between them
and the prices on the menu in order to ensure acceptable profit margins.

Type of food outlet Costs implications Staff implications

Food served is mostly made of Very low costs. Few or no kitchen

Self-Service outlets, Delis and readily available low cost raw staff at all. Service can be
Vending machines materials . Only minor storage manned by as little as one
requirements unskilled person

Skilled , semi-skilled and unskilled

Low service costs . Food costs
Cafeteria , pubs, bars and kitchen and service staff. Fewer
depending on the businesses'
buffet services employees than table service
aims
restaurants

Ranging from low to high quality Combining high-skilled and less

Restaurants (Americam and production, material and storage
English table service) costs according to quality level of skilled assistants will help keep
outlet personnel costs down.

Restaurants (French and High-skilled kitchen and service

Russian table service) Gourmet High quality raw materials, often staff.
restaurants , high level event seaonal ingredients Sommelier
catering

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Suitability of systems for particular food and beverage outlets

Clearly, the individual service systems are suitable for different types of food and beverage establishments:

 Table service will work well for business dinners, guests who go dining alone or to share a good time with
friends for a few hours or simply want to dine comfortably with a complete service at their table. Variations
according to the situation:

a. American style is recommended for a wide variety of food and beverage outlets such as
restaurants of all sizes and types, pubs, airlines and private clubs.

b. French style suits a more intimate formal dinner for one, two guests or a small group

c. Russian or Silver style is a practical and simple service to serve many guests in an elegant
manner. This system provides advantages for serving for larger tables or banquets

d. English style is suitable for less formal dining in both small and big groups.

 Buffet service can be successfully applied in commercial and non-commercial food outlets. Its advantages
are mainly minimizing the need for serving staff, offering customers the possibility of selecting the foods
they prefer from a wide choice and helping themselves to the amount of food they wish to consume. The
system is fast, informal and normally arranged in an attractive colorful way that adds to customer
experience. It can be used in restaurants, canteens and large events.

 Cafeteria service is ideal for catering to guests looking for a quick meal, maybe in their lunch break or
whenever they do not have much time to eat.

 Self Service – Take away – Vending machines helpful to customers that need a quick light meal, e.g.
sandwiches, wraps or fish and chips. These services normally do no provide sitting facilities and offer only
very basic service.

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Financial Statements in Food and Beverage Operations

In order to have a clear picture of the financial state of food and beverage operations, managers use a series of tools
called financial statements, among them:

• Balance sheet – Shows the organization’s:

a. Assets
b. Liabilities (Debts)
c. Capital (Net Worth)

• Income statement – informs in detail about the daily running of the business. Example:

Formula: Sales – Cost of product sold – Labor costs = Profit

Example: $1025 - $210 - $320 = $595

• Cash flow statement – monthly based report that shows cash income, use of it and cash balance

• Ratio – help analyze and identify problem areas – Shows %

Formula: Food Cost /Food sales x 100 = %

Example: 210/1025 x 100 = 20, 48 %

Formula: Labor Cost /Food sales x 100 = %

Example: 320/1025 x 100 = 31, 21 %

The example shows that labor costs are nearly 11% higher than food costs.

Use of cost and pricing processes

Food and beverages need to be priced correctly to ensure profit for the business and provide value customers.

The F&B manager needs to consider several factors when calculating the final price of the items on the menu.

Costs

The first basic step is to determine the purchasing and production costs of each portion, known as Standard Unit Cost.
This can be done by using some common methods:

 Cost per Unit Method – as purchased

 Yield Test – before cooking but after discarding wastage
 Cooking Loss Test – after cooking
 Standard Portion Cost – cost of portion of each ingredient
 Standard Recipe – cost of the sum of all ingredients

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Pricing

Once the beverage or food costs and other expenses have been established a Sale Price must be calculated to be
included in the menu.

Markup, a widely used method consist in multiplying costs by 300% is expected cover all costs, both food and other
expenses. Example:

Roast Green Baked Condi- Standard plate

Food costs Pork chop potatoes tomato cost
beans ments

Unit price $1.50 $0,50 $0,70 $0,50 $0,20 $3,40

Sale price
Standard Plate cost 300
$10,20
$3,40

However, there are a multiple approaches to price menu items:

 Subjective – based on many factors, for example

1. Intuition
2. Organization’s objectives
3. Psychology
4. Competitors prices
5. Lack of sufficient pricing knowledge

 Objective – based on a variety of formulas. A few examples:

1. Food Cost Percent method
2. Price Divisor method
3. Gross Profit method
4. Prime Cost Factor

Example of calculating the Sale Price of Pork Chop + side dishes with the widely used Simple Prime Costs method:

Yearly Sales Number of guests Labor costs per

Labor costs per year guest =
$186000 $84540 $2,20

Other costs e.g.

Number of guests Labor costs per
laundry, rent, Yearly Sales
per year guest
electricity, $104000
$84540 $1,23
ambience

Desired
Standard Labor Other Prime
Prime cost Sale price
Plate Cost costs costs costs
factor $21,85
$3,40 $2.20 $1,23 $6,83
3.2

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Purchasing process

Once the menu has been planned, the next step is purchasing the necessary products and raw materials for
production. Chefs in charge of purchasing in smaller businesses or F&B Management or Purchasing Departments in
larger companies need to consider:

 Desired quality of materials according to

1. Menu style
2. Service style
3. Organization’s standards and aims

 Quantity required

1. Have enough in stock in order not to run out of ingredients

2. Careful attention to freshness and “best before” dates

 Supplier

1. Wholesaler
2. Local farmers
3. Food brokers
4. Purveyors with wide range of products on offer
5. Location and facilities

 Delivery options

1. Speed
2. Service
3. Short notice availability

 Price

1. Lowest possible
2. Best service, value

 Payment options

1. Credit
2. Checks,
3. Bank transfers
4. cash

 Storage availability

1. Pantries
2. Refrigerators
3. Freezers
4. Walk in coolers, freezers

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Typical purchasing process example:

Determining Receiving
products Receiving
goods Invoice
needed
Choosing Storing Making
right supplier goods payment

Food and beverage menus for hospitality events:

To compile the right menu for hospitality events some important aspects should be taken into account:

 Type of event, e.g.

a. Conference
b. Wedding
c. Wedding anniversary
d. Birthday
e. Company anniversary
f. Student end of term dinner
g. Religious celebrations
h. Christmas party
i. Exhibitions
j. Fundraisers

 Guest profile

a. Age
b. Ethnic background
c. Religious background
d. Sophistication, cultural level
e. Place of residence
f. Food preferences
g. Service preferences
h. Budget

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Menu choices include

Event menu choices

Three or four-course menu

Suggestions

•Fish/seafood (smoked salmon, shrimps, seafood salad)

Starters •Meat (prosciutto, carpaccio, tartar, terrines)
•Salad Salad

•Soups
Seconds •Pasta
•Samosas
•Meats (veal, lamb, chicken, turkey, pork, game)
Main courses •Fish
•Vegetarian alternatives (lasagna, canneloni, pies)
•Ice cream
Desserts •Cakes
•Fruit salad
•Cheeses

Other menu options Theme menu: 4 course or

buffet

Traditional international buffet: Mexican

a wide selection of cold and hot
dishes including examples from Indian
the 4-course menu and further
additions Chinese

Italian

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Food and beverage service for a hospitality event within an agreed budget

Scenario:

Adriana, a Canadian diplomat stationed in Brussels, hired us to organize her birthday party with 80 guests including
several diplomats and government officials. She asked us to serve a not too rich typical Italian
5- course-meal. Security requirements are also high on her list. Her budget is $9000:

It is autumn, so we take advantage of Porcini mushroom season. Freshest available ingredients have been chosen.
Low fat cream (15%) used for soup and dessert.

Adriana's birthday party

Five-course Italian menu -

American style table
service

Starter
• Bruschetta with artichoke crème

• Zuppa di aragosta (Creamy lobster

Second soup)

Penne Arrabiata (pasta with spicy tomato

Main course sauce)

• Braciole di vitello con funghi Porcini é

Main course 2 puré parmiggiano + green salad (veal
meat rolls with Porcini mushrooms
and mashed potatoes Parmesan)

Cannoli Siciliani (Sicilian cream rolls)

Desserts
Selection of Italian cheeses

4 Children among guests will be served pasta with

meatballs and a mild tomato sauce

Beverages included (served between 6 pm and 2 am)

Wines:
Prosecco and lime (welcome
drink)
Spirits and other liqueurs at
Orvieto Classico 2014 the bar after dinner: Strega,
Soft drinks, beer, cider,
Barbaresco Fontanafredda Amaro Verna, Fernet Branca,
mineral water, juice fruits,
2011 (main meal) Vodka, Whisky, Bourbon, Gin,
coffee and tea
Tequila, Cointreau and many
Marsala, Amaretto (dessert) more

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Price for event:

 Menu: ($82 per adult) $6560

 Menu children ($8 per child)$ $36
 Beverages: ($18 per person) $1440
 Security: (3 guards) $ 900
Total: $8936 (within budget)

Adriana was extremely satisfied. The 4 waiter table service was efficient. The price covered all costs and the desired
profit aims were achieved. However, food portions were a bit too generous considering the 5-course meal. They
should be 20% smaller in the future.

Conclusion

The many different aspects of Food and Beverage Operations make the job of a F&B manager both complex and
fascinating at the same time. Being in charge of so many tasks requires skillful people who have a flair for
organization and can respond quickly and efficiently to problems.

Recommendations

F&B Management can present a huge variety of challenges depending on the organization’s size and objectives.
Common to all of them is the need to pay close attention to purchasing, costs, pricing and handling of the products.
Special consideration should be given to hygiene. Recruiting reliable qualified staff is vital to deliver a good product
and to be able to delegate tasks when needed, particularly in medium to large operations.

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References

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http://www.hospitalityinfocentre.co.uk/index.htm (Accessed February 1st 2015)

The Beverage Institute for Health and Wellness,Types of Beverages,The Coca Cola Company. Available from:
rd
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Charles Perry (November 5th 2013) The Cafeteria: an L.A. original, Los Angeles Times. Available from:
th
http://articles.latimes.com/2003/nov/05/food/fo-cafeteria5. (Accessed February 7 2015)

Alyson Page, Factors That Affect the Planning of a Food Menu, www.eHow.com. Available from:
th
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McVety, Determining Portion Costs and Food Prices, Kendall-Hunt Publishing. Available from:
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th
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th
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th
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th
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th
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th
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Mrs. Bernice Critchlow-Earle - Dr. Iva Dahl (February 2007), Food and Beverages Operations Core, Caribbean
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Illinois Small Business Development Center, Understanding your Business Financial Statements, A Simple Guide to
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th
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dLoewi (2010), Analyzing Restaurant Income Statement, Consulting dLoewi. Available from:
th
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