Product mix: what your hotel restaurant actually sells and what only takes up space on the menu

The hotel restaurant menu has forty-two dishes. The chef defends twelve, the manager suspects twenty and the guest orders the same eight every night. Nobody has the figure because nobody has looked at the product mix report, which has been sitting in the point of sale since day one. That report has no opinion: it counts how many times each item was ordered and how much it left every time.

What the product mix report is

The product mix is the list of everything you sold in a period, product by product, with units, sales and margin. From it come three percentages per product: what share of units it represents, what share of sales and what share of margin. A dish can be 15 % of units and 5 % of margin, and that imbalance is what the report brings into view.

For the report to be useful it needs two things from the system: that every order is captured by product, not as a generic “main course”, and that every product has a recipe cost loaded. Without the first there are no units per dish; without the second there are sales but no margin, and the mix is read halfway. In a hotel there is a third requirement: that consumption charged to the room enters the mix the same as what was paid at the table, because in many hotels it is the larger share of dinner.

It is read by category, not across the whole menu

Comparing a dessert with a main course makes no sense: the dessert will always have fewer units and a lower unit margin. The mix is read within each category: starters against starters, mains against mains, drinks against drinks. And within each category, every product is compared against the category average on two axes: popularity and margin.

The popularity threshold is calculated like this: total units of the category divided by the number of products, multiplied by 0.7. You use 0.7 and not 1 because in any menu a few dishes concentrate demand, and a product that sells 70 % of the average is still doing its job. The margin threshold is the weighted average unit margin of the category: total margin divided by total units.

The four boxes

With those two thresholds, every product falls into one of four boxes. The names vary; what matters is what you do with each one.

• Star: popular with high margin. Protect it, place it well on the menu and leave the recipe alone.
• Workhorse: popular with low margin. The guest wants it; raise its margin through portion, recipe or price, do not remove it.
• Puzzle: unpopular with high margin. Give it visibility, server suggestion or a new name before deciding its future.
• Dead weight: unpopular with low margin. It leaves the menu, unless it serves a purpose the mix does not measure.

An illustrative example with numbers

The figures below are invented to show the calculation. They do not belong to any hotel or any real restaurant. Category: dinner mains, one month, six products.

Units add up to 1,000 and margin adds up to 163,200. The popularity threshold is 1,000 ÷ 6 × 0.7, which rounds to 117 units. The margin threshold is 163,200 ÷ 1,000, which gives 163 per unit. With that, the catch of the day is a star (260 units, 210 of margin). Tacos, pasta and salad are workhorses: they sell a lot and leave less than 163 each. The tenderloin is a puzzle: only 90 units, but 250 of margin, the highest on the menu. And the risotto is dead weight: 80 units and 150 of margin.

The practical reading is this. If the pasta goes from 190 to 205 and keeps its 180 units, its unit margin becomes 160 and its total margin 28,800: 2,700 more per month for a change the guest barely notices. If the tenderloin goes from 90 to 120 units because the server suggests it and the menu highlights it, it adds 30 × 250 = 7,500 of margin. And if the risotto leaves and its 80 guests order any other dish in the category instead, margin does not fall: it rises, because every other dish leaves more than 150. With six dishes you already see a 10,000 difference per month; with forty-two, the effect is on another scale.

What to do with each box

Stars

Leave them alone. Do not change the recipe to save, do not raise the price to squeeze, do not move them around the menu. Make sure the ingredient never runs out, train the kitchen so it comes out the same every time and measure its theoretical cost every week so it stays a star. In a hotel, the star is usually the dish the long-stay guest repeats; losing it costs more than its margin.

Workhorses

This is where the easiest money is. They are dishes the guest already wants; the only thing missing is margin. Review the recipe looking for the expensive ingredient that adds nothing, adjust the portion if it is larger than the dish calls for, raise the price in a small step and measure whether units hold. They can also be paired with a suggested drink, which pulls margin from another category.

Puzzles

A puzzle is a dish the guest has not discovered. Before removing it, give it a chance: a featured position on the digital menu (Digital menu), a server suggestion on the dinner shift, a name and a description that say what it is, or a place on the room service menu. If after a month it is still below the threshold, accept that it is not for that guest and retire it.

Dead weight

It leaves. The exception is the dish that serves a purpose the mix cannot see: the vegetarian option a group guest demands, the children’s dish that keeps the family staying, the breakfast in the corporate agreement. Those stay with the purpose written next to them, and you check whether their recipe can cost less.

What the hotel changes in the reading

In a hotel restaurant, the mix does not describe a clientele: it describes that month’s occupancy. A month with corporate groups has one mix; the same month with families has another. Before deciding on changes, you have to know which guest generated the mix you are reading.

• Included breakfast distorts the breakfast category: its units are high and its sales are the allocation value. It is analyzed separately, focused on cost per cover rather than margin.
• Room service has its own mix, almost always shorter and heavier on drinks; added to the restaurant, it hides what happens in the dining room.
• The pool bar sells drinks and cold dishes; a dish that is dead weight in the dining room can be a star on the lounger.
• The long-stay guest repeats: a dish with few units but ordered every time by the same folios is keeping someone loyal.
• The season changes the whole mix: the summer menu and the winter menu are read separately.
• A corporate agreement with dinner included up to a cap pushes the mix toward the dishes that fit under the cap.

From the mix to the next menu

The mix report is not read to know; it is read to decide the next menu. And the next menu is not made in one go: it is made in short cycles, so that every change can be measured against the previous one with the same report.

1. Pull the mix for the last two months by category and by revenue center, with room charges included.
2. Calculate the two thresholds per category and classify every product into its box.
3. Decide one change per box and per category: a price, a recipe, a position on the menu, a removal.
4. Write down the purpose of every dish that stays despite being dead weight, with the name of whoever made the decision.
5. Publish the new menu on the digital menu and on the room service menu the same day, so the system records the change with a date.
6. Pull the mix again after thirty days and compare box by box; whatever did not move gets reviewed again.

Common mistakes when reading the mix

• Reading the whole menu as a single category and concluding that desserts do not sell.
• Using margin as a percentage of price instead of margin in money: a dish with 60 % margin on 100 leaves less than one with 45 % on 300.
• Removing a low-unit dish without asking which guest orders it; in a hotel it may be the guest from the biggest agreement.
• Leaving out consumption charged to the room and reading only what was paid at the table.
• Comparing a month of groups with a month of families without knowing it.
• Changing twenty dishes at once and being unable to tell which change worked.
• Having no recipe cost loaded and deciding on units alone, which is half the information.

What to do this week

1. Confirm that every dish and every drink on the menu exists as a product in the point of sale and has a recipe cost loaded.
2. Pull last month’s mix by category and by revenue center, and calculate the two thresholds for each category.
3. Classify the mains category into the four boxes and agree with the chef on a single change for each one.
4. Ask the front desk for the occupancy profile of the month you are reading: groups, agreements, families, long stays.
5. Write next to every dead-weight dish that stays what its purpose is and who decided it.
6. Put the mix reading on the calendar as a monthly appointment, with the next edition of the menu as its output.

Inn Restaurant records every order by product and by revenue center, with recipe cost and with consumption charged to the room included, so the mix reads complete; the reports are explained at (Reports). If you want to see your own hotel’s mix in the four boxes, book a 15-minute demo at (contact).