Food inventory at a restaurant is key to keeping service running smoothly. If you’re not careful, one small mistake can lead to food shortages and inaccurate forecasting, which will impact your business’s bottom line. FoodPrint reports that up to 10% of the food purchased by restaurants is wasted, meaning they are paying for those items but do not receive any revenue from them.

You may know the cost of everything, but do you know where your restaurant is losing money? Usage, Loss, and Sales Performance reports can tell you which items are sitting on the shelves and where you are losing money.

One of the most significant risks for food and beverage companies is increased wages and food costs. If you are not always working to make your company more profitable, these costs will eventually take over completely. To maintain success, you must constantly be reducing costs through improved efficiencies.

In this article, you’ll learn the basics of restaurant food inventory management: what it is, how to track your inventory, and where to find tools that will help. Let’s get started! 

What Is Food Inventory Management?

Food inventory management is a way of keeping track of what your restaurant has in stock at all times. With this information, restaurants can minimize the amount they spend on food by not buying too much or too little and maximize their profits because everything will be accounted for.

Restaurateurs who are good at inventory management know the following:

• Inventory purchased and what amount
• Quantity of merchandise used each day
• Amount of leftover stock each day

Benefits of inventory management

A food stock control system is essential for food and beverage businesses.

A tracking inventory helps manage waste, increase productivity, and regulate cash flow. Click To Tweet

It’s essential to keep an eye on your products’ manufacturing costs and market value. In the food industry, it is necessary because there are a lot more overhead costs for maintaining inventory control.

Control systems are essential for any business because they allow you to know what is happening. For example, if a menu item has low-profit margins than expected, that means that when the product goes unsold or not sold enough, more money will be lost and impact cash flow. Armed with this information, you can make changes to avoid future pitfalls.

Food inventory for loss prevention 

It is essential for restaurants to keep track of overall inventory levels and how much they spend on each product.

Not only does this help you figure out which inventory is not selling, but it also helps to pinpoint lost inventory due to:

• Employee mistakes
• Spills
• Theft
• Staff meals
• Comping disgruntled customers

Preventing food waste

If you want to maintain your profit margins, adopting a food inventory management system is a good idea. Along with labor costs, replenishing supplies can be the most significant expense that your business faces. By implementing stock control technology and reducing how much of your products end up in the trash, companies, both big and small, can successfully minimize wastage.

The first step to reducing food waste is figuring out how much you waste. In some cases, nothing can be done about it – for example, if the customer doesn’t like a dish and sends it back to the kitchen or when cooking errors happen. However, things such as preparation wastes and spillages should not occur with proper training from your staff.

You can conduct an audit to determine how much food is being wasted. The best time for this would be when your restaurant is busiest but not operating at total capacity in the kitchen.

This article will talk about five of the most common sources of food waste in restaurants and prevent them.

Over-ordering

Over-ordering food is a common problem, but it can be prevented by tracking inventory and ordering only what you need. It’s essential to keep track of the amount of product that has been collected so as not to have too much wasted.

Spoilage

Even if you are not an over-ordering product, spoilage is still a risk. If you don’t carefully inspect the food coming into your store, it might be accepted with best-by dates that have already passed. Labeling incoming products helps ensure an efficient system of FIFO storage.

Overproduction

Chefs will make too much food to avoid the dreaded “86” in many restaurants. This leads to higher rates of wasted dishes because it is hard for any restaurant with over-prepped ingredients not to use them up before they spoil.

Assorted misfires

It is essential to have the right people in place. Employees need training, and management must be on top of every detail for a restaurant not to experience misfires during service.

Poor portion control

You may have been throwing away too much food if you find yourself with a bag of untouched leftovers every night. If this is the case, your portions may be off, and you need to make some adjustments so as not to waste money on ingredients or time spent cooking for no reason.

The food waste problem is not as easy to solve as you might think. You can’t completely stop it from happening, but a few things make a massive difference in the amount of wasted food and money saved.

Important Restaurant Inventory Terminology

To make the most of restaurant inventory, it is essential to know a few terms.

Sitting inventory

Sitting inventory is the amount of stock a restaurant is carrying in-house. When calculating it, be sure to choose one unit of measure (either dollars or physical value) and stick with it.

Depletion

Depletion is the amount of inventory that has been used over a specific period. This can be calculated by either looking at your POS system’s data or taking an account and summing it manually.

Usage

This is the amount of sitting inventory divided by the average depletion over some time.

If you buy 70 pounds of ground beef and plan to use 10 pounds per day, that means the user would be seven days.

Variance

Variance is the difference between product cost and usage amount cost. It means that $50 of beer is unaccounted for. For example, if you used $500 worth of beer for the week but the POS reported that you only sold $450, the variance would be -$50.

Restaurant Food Inventory Tips

Now that you know some basic restaurant inventory management terms, let’s move on to taking accurate and consistent food inventory.

When to count stock items

The most important thing to do with food and beverage is consistency. You need to make sure that you minimize the waste of perishable goods by taking stock daily.

It is essential to take inventory at the same time every day. It’s best practice for this task to be done before you open or close your doors to have accurate stock levels reports.

The best way to reduce errors is by making sure that the same person handles inventory and deliveries. This will also save time because there’s no need for someone else to take over when they’re finished.

Organize food storage

Keeping your storage areas organized can be a huge time saver. Click To Tweet

It’s not easy, but it is easier to do when you have one large and diverse food and beverage program.

If your stockroom is disorganized, the likelihood of miscounting inventory during a stocktake will be higher than if it were organized. This increases the chance that you’ll either over or under-order products as well.

Stockrooms, pantries, and walk-in freezers can become messy quickly. Here are some tips for keeping them organized all year round:

• Group items according to food category
• Label your shelves

Choose a stock-taking team

Consistency is vital in counting inventory. Assign certain people to take charge of stock-taking, receiving orders, and updating inventory records.

Create an inventory counting schedule. We recommend measuring at the start and end of each day. Make sure that they are counted on the same days and at similar times.

Create an inventory consumption sheet

Inventory consumption spreadsheets are designed to track how much of an item you use, the amount wasted, and the cost of inventory.

Restaurants can better track inventory by monitoring how much is consumed daily. This will help them reorder when necessary and save money in the long run.

Here are a few things to consider when filling out your inventory consumption sheet:

• Name of ingredients
• Unit of measure
• Amount used
• The cost per ingredient unit
• The total cost
• Beginning inventory
• Ending inventory
• The daily consumption rate 
• Quantity wasted
• Waste cost

Teach staff how to take inventory

Restaurants with multiple locations need to ensure that inventory management is not just one person’s responsibility. Everyone from managers, shift leaders, and other staff should know how to count the stock if someone on the team can’t.

One of the most critical responsibilities that front and back house staff have is to keep track of inventory consumption. If something spills or spoils, they should notify someone immediately to be accounted for in the sheets.

Track sales every day

When restaurants monitor their sales and inventory levels every day, they react quickly. For example, suppose a restaurant has sold more of an item than expected and is running low on ingredients for that dish. In that case, the manager can order those ingredients without removing them from the menu until they arrive.

Keep extra supplies 

Restaurants that use ingredients like produce and meat quickly may want to always have some in stock “just in case.”

For example, if you’re a burger restaurant that usually deals with an unexpected surge in customers, it may be wise to have an extra inventory of fries. Just make sure to keep track of freshness, swapping it out if necessary. 

Use the right restaurant tech.

• MarketMan
• Tenzo
• BevSpot
• WISK
• RapidBar

Getting demand right is a difficult task.

Sometimes it feels like magic, but there will be less wasted food and money lost if you can get the forecast right. Click To Tweet

That’s why using technology to make better forecasts is essential.

Tenzo is a platform that uses AI to predict future sales, help restaurants accurately forecast their inventory needs, and order most economically. Tenzo’s dynamic par levels allow restaurant owners to have better control over their supply while avoiding a stock surplus.

Final Thoughts on Food Inventory Management 

Managing inventory is probably one of the least exciting parts of a restaurant, but it’s also essential to your business’ success; pay more attention to inventory management. Track it more diligently and ensure every dollar you spend will be translated to sales.