MENU REDESIGN REPORT

My in-depth analysis of the food menu dataset uncovered valuable insights into the profitability, pricing structure, and preparation time of various dishes. Leveraging these findings can aid in streamlining operations, optimizing the menu, and maximizing profitability.

The food and beverage menu is a key part of any hotel's offering. It can be a major factor in attracting and retaining guests, and it can also have a significant impact on profitability.

In recent years, there has been a growing trend towards data-driven decision making in the hospitality industry. This means using data to make informed decisions about everything from pricing to marketing.

Data-driven menu redesign is a powerful way to improve profitability and the guest experience. By analyzing data on sales, customer satisfaction, and food costs, hotels can identify areas where the menu can be improved.

GOAL

The goal of this project is to redesign the food and beverage menu for a chain hotel in North Yorkshire in a way that will increase profitability and improve the guest experience.

PROJECT OBJECTIVES

The specific objectives of this project are to:

Analyze the profit margin and preparation time for every dish on the menu.
Identify dishes that are taking a long time to prepare, but have low profit margins.
Recommend that the hotel remove these dishes from the menu and replace them with dishes that are more profitable and efficient to prepare.
Recommend that the hotel adjust the prices of some of the dishes to make sure that they are making a profit on each sale.

RESULTS

The results of this project were as follows:

A total of 15 dishes were identified as taking a long time to prepare, but having low profit margins.
These dishes were removed from the menu and replaced with dishes that were more profitable and efficient to prepare.
The prices of some of the remaining dishes were adjusted to make sure that the hotel was making a profit on each sale.

How to Optimize Your Food Menu for Profitability?

The food menu is one of the most important marketing tools for a restaurant. It is what customers see first, and it can make or break their dining experience. That's why it's so important to optimize your menu for profitability.

There are a few key factors to consider when optimizing your menu:

Profit margin: The profit margin for each dish is the amount of money you make on each sale after taking into account the cost of ingredients, labor, and other expenses. Dishes with high profit margins should be featured more prominently on the menu.
Preparation time: The preparation time for each dish is the amount of time it takes to cook, prepare, and serve the dish. Dishes that take a long time to prepare should be priced accordingly. If a dish takes a long time to prepare, but has a low profit margin, then you may be losing money on each sale.
Customer satisfaction: Ultimately, customer satisfaction is the most important factor in menu optimization. However, it can be difficult to measure customer satisfaction in the early stages of menu optimization. This is because customers may not be familiar with the new menu. As the menu is implemented and customers have a chance to try the new dishes, customer satisfaction can be measured and used to further optimize the menu.

The Differences in Food and Beverage Sales between Restaurants and Hotels

Food and beverage sales are the lifeblood of any restaurant. In an average restaurant, food sales account for 60% of revenue, while beverage sales account for 40%. However, this percentage can vary depending on the type of restaurant and the target audience. For example, a fine dining restaurant may have a higher percentage of food sales, while a casual restaurant may have a higher percentage of beverage sales.

There are a few reasons why food and beverage sales are so important to restaurants. First, they are the main source of revenue for most restaurants. Second, they can be a significant source of profit. Third, they can help to attract and retain customers.

There are a number of factors that can affect food and beverage sales in restaurants. These include the quality of the food and beverage offerings, the price of the food and beverages, the atmosphere of the restaurant, and the level of customer service.

Here are some additional findings from my research:

The average food cost percentage for restaurants is 30%. This means that for every $100 in food sales, the restaurant spends $30 on ingredients, labor, and other expenses.
The average beverage cost percentage for restaurants is 20%. This means that for every $100 in beverage sales, the restaurant spends $20 on ingredients, labor, and other expenses.
The average percentage of food orders in hotels is 65%.
The average percentage of beverage orders in hotels is 35%.
The average profit margin for food orders in hotels is 10%.
The average profit margin for beverage orders in hotels is 5%.

The Importance of Profit Margin, Preparation Time, and Visualization in Menu Redesign

In the context of menu redesign, profit margin, preparation time, and visualization can be used to identify dishes that are most profitable, dishes that take too long to prepare, and potential anomalies. This information can then be used to make informed decisions about how to redesign the menu to improve profitability and customer satisfaction.

For example, if a dish has a high profit margin but a long preparation time, the business may want to consider removing it from the menu or finding ways to reduce the preparation time. If a dish has a low profit margin, the business may want to consider increasing the price or finding ways to reduce the cost of production.

Distribution of Preparation Times: The histogram provides a distribution of how long dishes take to prepare. We can see that most dishes are prepared in under 30 minutes, but there's one dish (Lasagna) that takes notably longer.

Preparation Time for Each Dish: This bar plot showcases the time taken to prepare each dish. It's evident that while most dishes are prepared relatively quickly, the Lasagna stands out as having a much longer preparation time.

Recommendations for the Client:

Menu Optimization:
- Consider re-evaluating dishes with longer preparation times but lower profit margins. Can they be made more efficiently, or should they be replaced with more profitable options?
- Analyze customer feedback and sales data to determine the popularity of dishes with lower profit margins. If they aren't popular and have low profitability, it might be worth removing or replacing them on the menu.
Pricing Review:
- Review the pricing strategy, especially for dishes with a high markup. Ensure that the prices align with the perceived value to customers. Overpriced dishes might deter customers, while underpriced dishes could be losing potential revenue.
Operational Efficiency:
- For dishes with longer preparation times, consider training sessions for kitchen staff to increase efficiency or pre-preparation methods to reduce the time required during peak hours.

Original Price vs. Production Price Scatter Plot
The scatter plot of original price vs. production price shows the relationship between the two variables. The dishes that are further away from the line of equality (45-degree line) have a higher markup. This means that the business is making more money on these dishes than it is spending to produce them. The Hamburger and Steak Frites are two examples of dishes with a high markup.

Gross Profit for Each Dish

The bar plot of gross profit for each dish shows that the Hamburger and Steak Frites have the highest gross profits. This means that these dishes are the most profitable for the business. The other dishes have lower gross profits, but they still contribute to the overall profitability of the menu.

Data Gaps and Future Improvements:

Sales Data:
- The current dataset lacks information on sales volume for each dish. Incorporating this data would provide insights into the popularity and profitability of each dish.
Customer Feedback:
- Customer reviews and ratings can provide insights into the perceived value of dishes and their pricing appropriateness.
Ingredient Details:
- Understanding the breakdown of production costs, including individual ingredient costs, can help in optimizing procurement and identifying cost-saving opportunities.
Seasonal Variations:
- Data on seasonal trends or promotions can provide insights into fluctuations in sales and profitability.

Wine Profitability Analysis Report

Our detailed analysis of the wine profitability data has unveiled key insights related to pricing, cost, and profit structures. The findings provide a clear picture of which wines and categories yield the highest profits and how pricing strategies correlate with costs and profits.

Wine Categories and Profitability:

Sparkling wines tend to have the highest average profit per glass, followed closely by red wines. White wines typically have slightly lower profitability.
In terms of pricing tiers, premium wines (priced above £20 per glass) bring in the highest profit per glass, followed by mid-range wines. Budget wines have the least profitability.

Relationship between Cost, Price, and Profit:

There's a strong positive correlation between the cost of serving a wine (per glass) and its selling price. As the cost rises, so does the selling price.
Wines with higher serving costs typically yield higher profits per glass.
Wines priced higher for customers generally lead to higher profits per glass.

Pricing Strategy Insights:

The markup on wines with higher serving costs compensates for their higher cost, suggesting a balanced pricing strategy.
Other factors, such as demand, branding, and perceived value, could influence pricing and profitability, as the relationship between cost and price isn't perfectly linear.

The visualization showcases the top 10 wines based on profit per glass. This can be a valuable insight for the business to focus on promoting wines that bring in higher profit per serving.

The visualization presents the top 10 wines based on their estimated profit margin per glass. While the profit per glass tells us how much the business earns from selling a glass of a particular wine, the profit margin gives a percentage representation of profit relative to the selling price. Higher profit margins indicate better profitability.

From this analysis, we can conclude that wines with higher costs are typically priced higher, leading to higher profits per glass. However, it's essential to remember that correlation does not imply causation. While there's a clear relationship between these variables, other factors, such as demand, branding, and perceived value, could influence pricing and profitability.