Boost Profit Margins on the Dessert Menu

increase profit margins on your dessert menu

Posted: Sep. 12, 2018

Here’s one way to increase profit margins on your dessert menu and dazzle customers.

Dessert is delicious, but many restaurants struggle to make a profit from serving it. Razor-thin margins prohibit chefs from sourcing the right ingredients or a busy schedule may prohibit them from spending the necessary time to make a great dessert. The result is a lesser recipe, or worse, a menu of dismal, repetitive dessert options.

"It's hard to make money on desserts in the restaurant business today," said Tyler Cowen, an economics professor at George Mason University who writes at length about the economics of dining out. "I don't think many [restaurants] benefit when people order them anymore."

It would be easy to just avoid the dessert section all-together (some restaurants have tried this out, like the now-closed Ocopa in Washington D.C.), except that having no dessert isn’t an option for popular, mid-priced restaurants. Customers expect the choices and restaurants must deliver.

Fortunately, there is one easy way to increase your profit margins on dessert.

Add Value to Desserts

There are a few problems with dessert, and they mainly boil down to one simple truth: Desserts tend to offer the thinnest margins.

As food costs rise,(alongside labor, rent, and health care costs), restaurants are figuring out how to serve food that meets a high expectation within a comfortable price range for customers. Todd Kilman from the Washingtonian writes that entrees have more flexibility than dessert, which has a low price ceiling. For an entrée, the average customer’s limit is $30. For dessert, $20 is a no-go.  

"Dessert needs good ingredients to taste good, but you can't psychologically convince people to pay even $20 for dessert," Cowen said. "You can't really go cheap on it, but you really can't charge extra either."

According to NYC restaurateur Gabriel Stulman, “People spend way more money and a disproportionate number of hours on the savory portion of their meal.”

His point highlights one of the biggest problems for restaurants: Customers don’t find value in dessert. “The majority of guests aren’t willing to spend more than $12 for a dessert, and it is not uncommon for three to four people to share that dessert. That rarely happens with appetizers or entrees,” he notes.

To offset the costs, Cowen suggests that restaurants upsell cocktails, digestivos, and dessert wines.

“Parties that might have finished their dinner in a little over an hour instead linger for closer to two when they opt for dessert. And they stay the extra 30 minutes while consuming only a fraction of what they did during the first part of the meal. It would be different if people ordered drinks more often alongside cake, but they often don't. It would change things if dessert wines were more popular, finer and more expensive, but they aren't,” Cowen tells the Washington Post.

Restaurants have a whole new customer desire to tap into: dessert and wine pairings. All 2018 dining trends point toward an adventurous customer. Plus, the steady growth of the US wine industry over the past 25 years indicates how much consumers enjoy drinking.

Two-Michelin star Korean restaurant Jungsik in New York City does something very unusual by offering a five-course dessert tasting menu, with wine pairing for an additional fee.

It’s a chance for celebrated pastry chef Eunji Lee to showcase her skills while showing customers the possibilities of wine pairings with sweet food. The concept is modern and original and can work at your restaurant, too. 

Swap out your existing dessert menu for a thought-out dessert-and-drink pairing menu. If your restaurant is better known for its wine selection, highlight the sweeter, lesser-known grapes. If you have staffed mixologist wizards behind the bar, task the team with creating special cocktails just for this sweet portion of the menu.

“A cocktail brings in twice as much money as a dessert, and it doesn't hold up a table at the end of the meal. You have to turn the tables," says restaurant owner Mark Bucher.

By upselling wine or cocktails, you add a padding to the dessert margins, which in time, gives you the freedom and budget to create outstanding desserts.

Here are three points to consider when making a dessert and drink pairing:

  1. AcidityAcidic drinks go well with fruity or citrus desserts. For example, champagne or iced wine can be paired with Key lime pie or an apple tart.
  2. Intensity—Intensely flavored wine pairs well with an equally intense, rich dessert. For example, a port red wine goes well with a flourless chocolate cake.
  3. Sweetness—Sweet dessert wines or cocktails should be sweeter than the actual dessert. For instance, a Riesling can work with a buttery, vanilla cake; just take care that the wine and dessert aren’t competing for sweetness.

Seeing as how 10% of customers always order dessert when dining out, there is an established consumer base ready to order. Now, you can convince the rest with desirable drink pairings and top-notch desserts.

Boost your Instagram presence and market your dessert-and-drink pairing menu!

 

 

Posted: Sep. 12, 2018 | Written By: Emma Alois

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