Menu engineering: Targeted menu optimization for higher profits

Imagine your restaurant is full every evening and your guests are satisfied—but at the end of the month, there is hardly any profit left. Many restaurateurs are familiar with this dilemma: fundamental business principles are often neglected, especially a strategically optimized menu. The menu is much more than just a list of dishes; it is a key profit driver. Studies show that guests spend an average of only two to three minutes looking at the menu before making their decision. In this short time, they choose certain dishes – and this determines how profitable the visit will be for your restaurant. Accordingly, the menu should never be left to chance. Targeted menu engineering can significantly increase profitability—well-executed menu optimizations can generate 10–15% more profit on an ongoing basis. In this article, you will learn what menu engineering means, why it is so important, and how you can turn your own menu into a profit driver.

What is menu engineering?

Menu engineering refers to a data-based method of designing and calculating a restaurant menu in such a way that it generates maximum profits. Sales figures (popularity of dishes) and contribution margins (profitability of dishes) are analyzed in order to make informed decisions about menu design. Put simply, it involves promoting popular and profitable dishes and consistently removing or revising weak items. The basis for this is sensible recipe management. Every item on the menu should either be a revenue generator, yield a solid profit—ideally both—or serve an important conceptual purpose. Otherwise, a dish has no place on your menu in the long term and should be replaced by more profitable alternatives. Menu engineering is not a one-time project, but a continuous process: menus should be regularly reviewed and adjusted to adapt to changing costs and guest preferences. The right mix of analysis and creativity ensures that your menu both delights guests and optimizes profits.

Why menu engineering is so important

The menu is one of the most important tools a restaurant has for managing sales and profits. Targeted menu engineering maximizes profitability without compromising the guest experience—on the contrary, it often even improves it. However, many businesses fail to exploit this potential. Experts estimate that around 60% of restaurants do not engage in any systematic menu optimization, thereby missing out on easily achievable profits. Those who allow their menus to grow unchecked or set prices and dishes "on a whim" risk hidden losses and miss out on sales opportunities. A well-designed menu, on the other hand, can significantly increase profits per guest without simply raising all prices.

Specifically, menu engineering offers a number of tangible benefits. First, overall profits can be increased by identifying profitable dishes and promoting them more prominently. Second, analyzing the menu leads to better cost control: you can identify dishes with high food costs and low margins and adjust prices or recipes accordingly. Ideally, unprofitable items will disappear from the menu, which will immediately increase your average margin. Third, an optimized offering helps reduce food waste. By streamlining your selection and using similar ingredients in multiple dishes, you can plan your purchasing more efficiently and throw away less surplus. Fourth, a well-coordinated menu improves the guest experience: you offer guests attractive, popular dishes in a clear format. Decision-making becomes easier, and guests feel guided rather than overwhelmed by endless options. Finally, regularly revising the menu promotes innovation. You remain flexible, can try out new trends or seasonal products, and continuously refine your offerings. Overall, the menu becomes a powerful management tool for your business—it combines guest satisfaction with operational efficiency.

Cost of goods under control: precise calculation as a basis

The first step in menu engineering is simple but essential: know the exact cost of each individual dish. A solid calculation of all recipes forms the basis for every further decision. Nevertheless, it is estimated that the majority of restaurants do not calculate the full cost of their recipes—according to surveys, around 80% of restaurants do not calculate the exact cost of their dishes. The reasons are understandable: it seems time-consuming to record all the ingredients for each dish down to the gram, as well as all the side dishes, dips, and garnishes. But without this data, you are financially in the dark. If ingredient costs are not fully included in the calculation, you may unknowingly be selling some dishes below cost. Similarly, the classic rule of thumb "cost of goods × 3 = selling price" is often misleading because it ignores overhead costs, staff, and fluctuations in purchase prices. Pricing based on gut feeling is dangerous: some dishes may have a significantly lower margin, while others may seem overpriced and scare guests away. A precise calculation of each recipe, on the other hand, shows you the real cost of goods per portion and the contribution margin (selling price minus costs) for each menu item.

Perform this calculation consistently for all dishes and update it regularly. The prices of many ingredients are subject to seasonal fluctuations—if purchasing costs rise, your margin will shrink if you don't readjust. Only those who know the current costs can react in time. In practice, it is therefore advisable to seek technical assistance. Modern recipe management software —such as the BarBrain recipe management tool – does most of this work for you. It allows you to record all ingredients and quantities centrally; the cost of goods per portion is calculated automatically and adjusted immediately when prices change. This means you always know which dishes are profitable and which are not. Fluctuations also become transparent: if the profitability of a dish suddenly falls below your target value, you can take immediate countermeasures. In short, accurate recipe calculation is the basis for successful menu engineering. Invest the necessary time or use digital tools to keep track of this data—it pays off.

Evaluate sales figures: Which dishes are the best sellers?

In addition to costs, you need to understand which dishes are popular with your guests and which are slow sellers. The next step is therefore to analyze sales figures over a representative period (e.g., several months). Modern POS systems and digital restaurant analytics make it easy to obtain accurate sales statistics today: every receipt reveals how often a dish has been sold, and you should definitely make use of this data. Take a look at which menu items are ordered most frequently—these are your bestsellers. It is equally important to look at the other end of the spectrum: Which dishes are rarely ordered? This list of "slow sellers" (in the sense of slow-moving items) often holds surprises, because the bestsellers do not always correspond to what you would have subjectively expected.

In addition to the hard figures, it is worth taking feedback from staff and guests into account. Your employees usually know very well which dishes are regularly praised or which are more often sent back. Guest comments (directly or on review portals) can also provide clues as to why certain dishes are more or less popular. It is important to put the sales data into context: Seasonal effects or special promotions can temporarily influence popularity. If your cold dishes sell more frequently in summer than in winter, this is to be expected—such seasonal trends must be taken into account. Nevertheless, the evaluation quickly provides a picture of which dishes are indispensable and which are up for discussion. These findings are now linked to the results of the cost evaluation.

Analyzing and optimizing dishes: bestsellers, cash cows, insider tips, and flops

Once you have determined both the profitability (calculation) and popularity (sales ranking) of your dishes, you can divide your menu into four groups—a classic result of menu engineering. Each category requires a different strategy:

• Best sellers are dishes that are both popular and profitable. These offerings are your stars and should remain on the menu unchanged. Ensure you have enough capacity to meet demand and highlight these top dishes —for example, by marking them on the menu or as the recommendation of the day. Best sellers are the core of your business and deserve maximum attention.
  
  
• Best sellers – dishes that are frequently ordered but only marginally profitable (high demand, low margin). These items generate sales but contribute little to profits. Fine-tuning is required here: check whether a moderate price adjustment is possible or whether you can reduce costs, for example by serving slightly smaller portions or using cheaper ingredients, without noticeably compromising quality. Even a small increase in the sales price – communicated skillfully – can have a big effect on monthly profits for a dish that sells well. However, be careful not to jeopardize the appeal of the best seller; these dishes are often crowd favorites that you don't want to lose. Feel free to take a look at our blog on contribution margin calculation.
  
  
• Insider tips – dishes that have a high margin but are rarely ordered. These dishes theoretically have great profit potential, but are not (yet) popular with guests. Ask yourself why this might be. Is the dish difficult to find on the menu or inconspicuously placed? Perhaps the name or description is not appealing enough? Perhaps it simply lacks awareness. Active promotion and clever placement can help here: for example, present such dishes as the chef's special or in a separate box on the menu to draw attention to them. Train your service staff to specifically recommend these high-margin dishes. It may also be worth revising the recipe or name to increase its appeal. The goal is to turn the "insider tip" into a bestseller. If a dish continues to flop despite all your efforts, consider replacing it with a more suitable option.
  
  
• Dead weight – dishes that are neither frequently ordered nor profitable (slow-moving items with low margins). Such items have no place on an efficient menu. Do not hesitate to remove genuine loss-makers from the menu. Every space on the menu occupied by a "loser" is missing for potentially more successful creations. Some restaurateurs find it difficult to remove dishes – for example, because a dish was part of the original concept or has a small loyal fan base. But keep in mind: if an item on the menu is rarely ordered and, in the case of the few orders, generates little to no profit, it ties up resources (storage space, ingredients, preparation time) and dilutes the overall performance of your menu. Get rid of the dead weight. A leaner menu with high-performing dishes is often more attractive and at the same time facilitates kitchen and service processes.
  
  

Once you have classified your dishes into these categories, develop specific measures. Actively promote the bestsellers and winners: these dishes should be the focus of your menu design, as mentioned above. Carefully optimize the bestsellers to get more out of them. Promote potential insider tips through marketing or specials so that they get more attention. And get rid of the losers without false sentimentality. This process is dynamic—continuously monitor the effects of your changes. Perhaps an adapted dish will suddenly become a bestseller, or a formerly popular item will lose its appeal and slip in popularity. Menu engineering is never "finished, " but rather a continuous cycle of analysis, adjustment, and control. Take advantage of test runs: Temporary promotions or changing daily specials are an excellent way to try out new dishes and gauge guest feedback before adding them to your permanent menu. This allows you to remain flexible and continuously improve your offerings without overwhelming your guests.

Designing a menu to promote sales (psychology & design)

In addition to the selection of dishes, the design of the menu itself also plays a major role in sales success. Studies in restaurant psychology show that layout, labeling, and price presentation have a noticeable influence on guests' ordering behavior. Therefore, make sure to present your optimized selection in the best possible way:

Overview and structure: Ensure that the menu is clearly structured and easy to read. Standard categories (starters, main courses, desserts, drinks) help guests find their way around. Avoid overly long lists—focus on your best offerings. As a rule of thumb, around seven dishes per category is ideal to offer enough choice without overwhelming guests. If in doubt, it is better to remove more "middle-of-the-road" dishes than to include every conceivable variation. A compact, focused menu signals professionalism and makes it easier for guests to decide.

Highlights: Use visual accents to draw your guests' attention to specific items. For example, particularly profitable dishes or current recommendations can be highlighted with graphic elements—such as a framed chef's recommendation or an icon. Placement also plays a role: studies have shown that the most eye-catching areas of a physical menu are at the top or center of a page. Position your best-sellers and high-margin offerings in these areas, where the guest's eye first falls. Less profitable or secondary dishes can be placed in less conspicuous locations. In this way, you can subtly steer your guests' choices toward the desired items.

Price presentation: The way prices are displayed on the menu subconsciously influences price perception. Many successful concepts do not use currency symbols ("€") next to prices, as the symbol subconsciously reminds customers of paying – without the symbol, the amount seems less "monetary. " "Charm prices" have also proven successful: if a price ends in 90 or 99, customers often perceive it as cheaper ("psychological price barrier"), while round amounts (e.g., €10.00) tend to be perceived as high-quality and expensive. Details like these can make the difference between a guest choosing a dish or opting for a cheaper alternative. It is also important not to place too much emphasis on the price list. For example, avoid arranging the dishes strictly by price (from cheap to expensive), as this unnecessarily draws attention to the price. It is better to let the guest decide based on taste and interest, rather than the cheapest option at first glance.

Conclusion: Your menu as a factor for success

In today's restaurant industry, with rising costs and fierce competition, no business can afford to view the menu as mere decoration or a necessary evil. Menu engineering is one of the most effective—and often underestimated—ways to increase profitability without compromising the guest experience. Through data-driven analysis of your dishes and conscious menu design, you can get the most out of every visit. Of course, this process requires effort and discipline at first: recipes must be maintained, prices calculated, and sales figures evaluated. But this effort pays off directly in cash. Many restaurants have been able to significantly increase their profits through menu optimization, sometimes within a short period of time. Equally important, a consistently managed menu allows you to respond quickly to changes, whether they be fluctuations in food prices, new dietary trends, or guest feedback. Instead of adding or removing dishes haphazardly, you have a clear compass for decision-making. As an experienced chef once said, "Every dish on the menu has to prove itself—or it has no place there."

Use menu engineering as an ongoing improvement process. Review the performance of your menu at least seasonally (if not more often) and don't be afraid to make adjustments. Remember that accurate data is the basis of any optimization, so keep your calculations and sales statistics up to date. The good news is that you don't have to do these tasks alone. Digital tools can do much of the work for you. For example, the BarBrains recipe management tool allows you to keep track of all recipes and cost factors and see which dishes are profitable at the touch of a button. Solutions like these help to efficiently integrate menu engineering into your daily operations, allowing you to focus on implementation and creativity.

In summary, your menu has a significant impact on your profits. Well-thought-out menu engineering not only increases your return on investment, but also the satisfaction of your guests—a real win-win situation. Especially for individual restaurants and small chains, this can make the difference between good food and good business. Don't leave this success to chance. Get started now, analyze and optimize your menu step by step. Your bottom line will thank you – and so will your guests.