Menu & pricing
Menu engineering in plain English: Stars, Workhorses, Hidden Gems, Underperformers
By RestoGrowth Advisor Editorial Team · Published
Menu engineering sorts every dish by two things: how many you sell, and how many dollars each one earns (its price minus its food cost). That gives four groups. Stars sell well and earn well. Workhorses sell well but earn less. Hidden Gems earn well but don’t sell enough. Underperformers do neither. Each group gets a different fix.
Why dollars per dish beat food cost percentage
Many owners judge dishes by food cost percentage. But you bank dollars, not percentages. A $34 steak with a 38% food cost earns $21 a plate. A $16 burger with a 31% food cost earns $11. The steak looks worse on percentage and is nearly twice as good for your bank account.
Menu engineering, developed by Michael Kasavana and Donald Smith, uses dollars earned per dish (the contribution margin) and how often it sells. You still need to know your food cost per dish, because that is how you work out the dollars.
What you need
For each dish in one menu section (for example, entrées):
- Number sold over the same period, from your POS product mix report. A month is a good start.
- Menu price.
- Plate cost: the cost of every ingredient in one portion, at current supplier prices.
Compare dishes within the same section. A $9 side shouldn’t be judged against a $34 steak.
The two tests
Profit test. Work out each dish’s contribution margin, then the section’s average weighted by how many of each you sold. A dish at or above the average passes.
Average margin = total margin from all dishes ÷ total dishes sold
Popularity test (the 70% rule). If every dish sold equally, each would get an even share. A dish counts as popular if it sells at least 70% of that even share.
Why 70% and not 100%? On any menu some dishes outsell others. With a 100% bar, about half your menu would always look unpopular. The 70% rule is the one Kasavana and Smith used; our Menu Profit Matrix lets you move it.
Worked example
Five entrées at an example restaurant, over one month:
| Burger: $16 − $5.00 | $11.00 (300 sold) |
|---|---|
| Pasta: $19 − $4.50 | $14.50 (200 sold) |
| Steak: $34 − $13.00 | $21.00 (90 sold) |
| Salmon: $28 − $9.50 | $18.50 (60 sold) |
| Chicken: $18 − $6.00 | $12.00 (50 sold) |
| Total sold | 700 |
|---|---|
| Total margin | $9,800 |
| Average margin: $9,800 ÷ 700 | $14.00 |
| Popularity bar: 700 ÷ 5 × 70% | 98 sold |
| Pasta: 200 sold, $14.50 | Star |
|---|---|
| Burger: 300 sold, $11.00 | Workhorse |
| Steak: 90 sold, $21.00 | Hidden Gem |
| Salmon: 60 sold, $18.50 | Hidden Gem |
| Chicken: 50 sold, $12.00 | Underperformer |
Notice the steak: 90 sold is just under the bar of 98. A few more steak orders a week would make it a Star, and it earns nearly twice the burger per plate. That is where to focus first.
Sort your own dishes in the Menu Profit MatrixFree Menu Engineering & Pricing. No sign-up needed.What to do with each group
Stars (popular, high margin): protect them. Keep the recipe and portion consistent, give them a good spot on the menu, and be careful with big price rises.
Workhorses (popular, lower margin): earn more from each one. Try a small price rise, a cheaper side or garnish that guests won’t miss, or a paid add-on. Make the plate cost work before you think of removing a dish people come for.
Hidden Gems (high margin, not popular enough): sell more of them. Move them to a more visible place, write a better description, add a photo or a box, ask servers to recommend them, or run them as a special. Check the price isn’t putting people off.
Underperformers (neither): fix, replace or remove. Unless a dish has a job (the vegetarian option, a kids’ dish, a regular’s favorite), consider replacing it. A shorter menu is also easier to prep and wastes less.
Our free Menu Review checks the layout and descriptions of your menu, which helps with the Hidden Gems.
Common mistakes
Frequently asked questions
What is menu engineering?
Menu engineering is a way to sort the dishes in each menu section by how many you sell and how many dollars each one earns after food cost. Each dish lands in one of four groups, and each group calls for a different action.
What are Stars, Plowhorses, Puzzles and Dogs?
They are the original names for the four groups. We call them Stars, Workhorses (Plowhorses), Hidden Gems (Puzzles) and Underperformers (Dogs). The groups are the same.
What is the 70% rule in menu engineering?
A dish counts as popular if it sells at least 70% of an even share. With 5 dishes and 700 sold, an even share is 140, so the bar is 98 sold.
How often should I do menu engineering?
At least every time you change the menu, and whenever key ingredient prices move. Re-running it every quarter from your POS product mix report is a sensible rhythm.
Should I remove every Underperformer?
Not always. Some dishes have a job, like the vegetarian option or a kids’ meal. Try fixing the price, cost or description first, and remove the dish only if it still doesn’t earn its place.
Sources
- LeBruto, Ashley & Quain, “Using the contribution margin aspect of menu engineering to enhance financial results”, International Journal of Contemporary Hospitality Management, 1997Used for: Kasavana and Smith’s menu engineering matrix and the 70% popularity rule
Examples use an invented example restaurant with round numbers. See how we calculate for the formulas behind our tools, and our editorial policy for how guides are checked. Spotted a mistake? Tell us and we will fix it.