Chapter 17Food and Beverage Cost Control and Profit Conversion

The morning report at Blue Moon looks great: breakfast was full, the cafe sold more coffee, the rooftop bar sold premium cocktails, in-room dining had a strong week. Total F&B Revenue is ahead, covers are up, average check improved.

Then Amara opens Schedule 2. Cost of Food Sales rose faster than food revenue. China and Glassware replacement is unfavorable. Rafael is ready to say "food cost is high" — but one percentage can't distinguish purchase inflation from wrong yield, buffet overproduction, portion drift, breakage, or simply a service model that consumed more supplies.

“Do not judge F&B by revenue or food cost percentage alone. Follow the product into the correct cost line, control driver, KPI, and management action.”

Questions this chapter helps answer

• How should a hotel reconcile food and beverage cost of sales from purchases and inventory through recipes, yield, portions, and waste?
• How can product cost, transfers, staff meals, complimentary items, and supplier effects change F&B profit conversion?
• How should F&B departmental profit be analyzed without relying on one blended food-cost percentage?

What this chapter gives you

• How to read F&B Schedule 2 at line level and reconcile cost from purchase to consumption
• The eleven distinct causes hiding behind a single "food cost is high" headline
• Why a strong revenue day can still produce a weak departmental profit conversion

Key concepts

• food cost
• beverage cost
• inventory reconciliation
• recipe cost
• yield
• portion and pour
• waste
• transfers
• F&B Departmental Profit

The review has to start with the product and the service promise: what did the guest consume, what left inventory, what was wasted, transferred, comped, or broken?

Hotel Financial Reporting in Practice · Manish Gupta, CA