Forecasting is powerful, but profit is won (or lost) in the menu. Here’s how I use menu engineering + operational data to protect margins in hospitality.

Hi, I’m Karine Sarkisyan. I work at the intersection of financial analysis, hospitality operations, and public health, and I’m obsessed with one question:

How do we grow a hospitality business without sacrificing margin, quality, or community value?

In my last post, I shared how forecasting helps hospitality scale sustainably. This time, I want to talk about what usually decides whether those forecasts become reality:

The menu.

Most restaurants don’t “lose money” in one big dramatic moment. They leak it quietly through:

• inconsistent portions,
• underpriced best-sellers,
• rising ingredient costs,
• high waste and spoilage,
• and a menu that looks nice but doesn’t behave like a business system.

So here’s the practical playbook I use: menu engineering + cost control, grounded in data.

1) The menu is not a list. It’s your operating model.

If your menu isn’t tied to data, it becomes guesswork. And guesswork turns into:

• unstable COGS,
• chaotic purchasing,
• staffing pressure,
• and unpredictable profitability.

A data-driven menu acts like a control system: it tells you what to push, what to fix, and what to remove.

2) The two numbers that matter most: Contribution Margin + Popularity

I start with a simple matrix:

Contribution Margin (CM)

CM = Menu price – (ingredient cost + packaging + variable add-ons)

Popularity

How often it sells (units per week/month), ideally segmented by:

• dine-in vs delivery,
• daypart,
• season,
• promotions.

Then I categorize items into four types:

• Stars: high margin + high popularity
• Plowhorses: low margin + high popularity
• Puzzles: high margin + low popularity
• Dogs: low margin + low popularity

This is where strategy becomes clear.

3) What I do with each category (real decisions, not theory)

⭐ Stars

These are your growth engines.

• feature them in marketing
• protect ingredient availability
• standardize execution so quality stays consistent

🐎 Plowhorses

People love them, but they don’t pay the bills. Common fixes:

• small price lift (even $0.50–$1.50 matters)
• portion calibration (especially proteins)
• bundle strategy (add high-margin side or drink)
• cost-reduction via ingredient swaps without changing the identity

🧩 Puzzles

High margin, low sales. Usually a positioning problem.

• rename it
• move it on the menu
• improve photo/description
• create a limited-time highlight
• train staff on how to recommend it

🪨 Dogs

These usually create complexity without return.

• remove them
• or redesign them entirely
• or convert them into seasonal/limited offerings if they support brand story

4) The “silent killers”: portions, waste, and vendor creep

Even a perfectly priced menu fails if the kitchen is inconsistent.

Here’s what I track monthly:

• portion variance (standard grams/ounces vs reality)
• waste/spoilage rates
• vendor price drift (same ingredient, different cost over time)
• inventory turnover
• prime cost (COGS + labor)

If you want a single operational rule:

Margins don’t disappear in the spreadsheet. They disappear in the kitchen.

5) Tools I use (simple stack, strong output)

You don’t need a fancy tech budget to do this well.

• Excel / Google Sheets for margin math
• POS exports for item-level sales
• basic inventory tracking (or even structured weekly counts)
• dashboards (Power BI if available, but not required)

The key isn’t the tool. It’s the discipline: consistent inputs → consistent visibility → consistent decisions.

6) Where public health meets profitability

This might surprise people, but nutritional innovation and profitability can support each other.

When you design menus with:

• balanced ingredients,
• stable sourcing,
• portion control,
• less waste, you often end up with:
• improved customer satisfaction,
• better consistency,
• fewer remakes/complaints,
• and cleaner unit economics.

Sustainability is not a vibe. It’s a system.

Closing thought

Forecasting tells you where you could go. Menu engineering tells you whether you’ll survive the trip.

If you’re running a hospitality business (or advising one) and want:

• a menu engineering template,
• a margin calculator,
• or a simple “Stars/Plowhorses/Puzzles/Dogs” dashboard structure,

I’m happy to share what I use in practice.

Because in hospitality, growth is optional. Profitability is not.