Ep 190: How Your Restaurant's Menu Can Drive Sales & Profits
Join Jaime Oikle from RunningRestaurants.com in a great chat with Lucy Logan of MenuCalc about where their business is today and how they are helping so many restaurants with their menus. The pair hit on a lot during a fun talk, including:
- How to increase sales and profits by targeting menu & dietary preferences
- How automatic real-time menu updating is helping restaurants save time and money (and be more accurate)
- The impact of calorie counts and ingredient tracking for restaurants
- How pivoting from compliance-focused to insights-focused has changed MenuCalc
- Leadership lessons
- Lucy's business book recommendation
- and more...
Be sure to check out the episode! Find out more at MenuCalc and Running Restaurants.
Thanks to the episode sponsor, Popmenu.
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Watch the episode here
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How Your Restaurant's Menu Can Drive Sales & Profits With Lucy Logan
Coming up on this episode of the show, I speak with Lucy Logan, CEO and Founder of Menu Calc about how they're helping so many restaurants make their menus more profitable. Good stuff coming up. Stay tuned.
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We've got a great episode for you with Lucy Logan, CEO and Founder of Menu Calc and Food Calc. We'll talk about that. Lucy, good to see you again. Welcome.
Nice to see you. Thank you for having me.
How MenuCalc Started And Evolved
When we spoke the last time just privately about your business, we talked about pivots, how the business has changed over time, and where you are today. Tell us about that, where you started, and where you are now. What are you thinking?
We started as a compliance company many years ago. We started producing a web-based nutrition analysis platform, primarily for food manufacturers and retailers to obtain the nutrition analysis and the FDA nutrition labels that you see on the back of cereals and cookies, etc. Anything you'd see in a grocery store. California started to talk about a calorie posting law where restaurants would have to provide calories on their menu and menu boards if they were at fifteen locations. We were extremely fortunate at that time to partner with the California Restaurant Association and take our existing nutritional platform and layer it into a restaurant operator-friendly format.
That was a catalyst for us to move slowly out of the CPG and move into food service. We made our home with restaurants and food service and hospitality providing an online compliance solution that was nutrition and allergen-focused on their recipes. COVID came, and I think everyone in our industry probably echoes the same thing that we adapted, or in some cases, we couldn't adapt and we either pivoted or unfortunately, some companies had to close their doors.
We were at a moment where it was a pretty serious fork in the road. Do we stay trying to provide nutrition analysis to restaurants when they were just trying to pivot to get their dining rooms to go digital? They were trying to understand what exactly is third-party ordering. I think restaurants are the best at what they do by providing and selling experiences, the taste, the sound, the clinking of the glasses, the low murmuring when you walk into a dining room and that was all closed. Particularly for us being here in California, it was almost up to, I think, twelve months where that experience was gone. We realized with a similar immediate pivot from experience to product, we had to do the same.
We realized what happens if we took this nutrition information, what happens if we took these menu and ingredient insights and actually pivoted them towards a marketing program. Eighty-six million people in the United States have a dietary preference. Thirty-four million of them have a food allergen. We know that they frequent 25.5 times more. We know that individuals who have an allergen can help a restaurant operator boost their profit margin by 24%.
An article just came out, I think, from Data Essentials that said that vegetarians and vegans will actually pay more for a menu item if that is sustainable. We thought, “Can we take our history of recipe analysis and ingredient analysis and pivot that into something that's a marketing tool for our customers who are trying to digitize their new dining experience?” That's how we launched Smart Menu.
Thanks for taking us on that journey. I remember you had to change and you were in one of the hardest hit, not hardest hit, but most restrictive markets in the country that went through COVID the restaurants there for sure. Very interesting stuff. We'll come back to a few of those things, but what you just talked about there about certain folks willing to spend more, the vegetarian folks will pay more for an item if you can show that it's sustainable. Very interesting and not a small amount you just talked about there. I see, not going to say something that's out of sorts, is the calorie counts are very prevalent now.
Calorie counts are now a dining essential. It's the first thing many look at on the menu. This trend is paving the way for healthier choices!
Certainly, you can speak to the actual law, or I don't know what it is. I know over a certain amount of restaurants, over units you have to show that data. You can talk to that, but I'm seeing more and smaller people do it. Independents are starting to jump on board. It's the first thing my wife looks at at the menu. When we dine out, “What is the calorie count of this meal? I had no idea. That sounds great but that's not what I'm looking for right now.” The trend is just right in your direction right up your alley. Talk about that aspect of it, how it's changed so much.
The Shift From Nutrition Analysis To Ingredient Insights
It's really interesting because I feel for us, as the company, shifting away from nutrition analysis and moving to ingredient insights is far more palatable, I think from an operator's perspective. Also, I think from a guest's and a diner's perspective. Most of the time we go out to eat, we are there to enjoy, and we're going to indulge. If you're at 20 or more locations, those calorie counts have to be on the menu and menu board. I feel that sometimes diners feel that I just come, I've left my work, maybe I'm going out on a date, maybe I'm going out without my partner, without the kids, and I want to just go and enjoy and let loose. Then all of a sudden, there are calories on the menu.
I think restaurants were very fearful of doing that for a long time. They thought that it would affect their bottom line. They thought that people would choose perhaps salads over steaks, which obviously would have a big difference in the final check price and that hasn't happened. I think the beautiful thing about being transparent when it comes to the menu and the offering, the beautiful thing around shifting from compliance to ingredient insights, opens up this huge dining market. Those 86 million people I mentioned have a dietary preference.
There are still millions of other people who are watching their calories or they may need to increase protein or they need to lower saturated fats, whatever those individual personal preferences are, it's a marketing opportunity for the operator. I think the interesting thing that we have seen with our shift to a smart menu is shifting away from nutrition analysis and moving to ingredient insights. What insights can we, as a company, give our customers that help them market their menu better to their diners who are looking for this information, be it calories, trans fat, shellfish, gluten-free, or sustainable?
Let's go there and stay there for a little bit. Those marketing opportunities, those insights, how have you seen folks effectively take it? What is the software doing now? Because you could I'm sure it's so much more powerful than it has been in the past. I know we talked about it when we spoke, it's easy to change now. What can a restaurant do? You can talk about a case example, whether it's fictional or real, about how to highlight stuff on the menu, highlight what's in there in terms of the opportunity to sell more of it, to know the awareness of it. What do you have?
That's a great question, Jaime. What Smart Menu does is it's a real-time live sync-up from our recipe analysis platform, MenuCalc. Because we originated as a compliance solution, we have that granular, accurate quality information that is needed to meet those menu labeling standards or to make sure that a menu item is safe for an individual with an allergen. What we've done now is take that information and feed it into a direct guest-facing display on the restaurant's website and it's completely co-branded.
Then a diner would typically click on a nutrition guide or allergen information, which historically was a PDF. Sometimes it would download to a separate section. Imagine the friction if you're a diner on your phone and you're trying to figure out where it's downloaded to. With Smart Menu, it's a separate page that is synced in real-time to the recipe. A diner can click a button that says, “I would like to see menu items that are gluten-free.”
Then the menu items will change and they will be highlighted for that particular diner, which is a great experience for them because they can go through the menu items far quicker. It's a great experience for the restaurant operator because they're not having that front-of-house cost of the server saying, “I don't know, let me go back and ask the kitchen.” Then the kitchen's like, “We're trying to serve and we've got all these plated items going out, hold on one second.”
It actually disrupts the flow. If you do that over multiple table turns, over multiple locations, over multiple days, weeks, and months, it is a huge labor cost. Smart Menu, because it is digital because it's synced up to the recipe, it is that source of truth. Then layering that filtering system based off of the individual dietary preference just speeds up that person or that guest's information that they're looking for that meets their individual dietary preference.
You answered it before I could get to it but I was going to say the training aspect of it jumped right out at me because a lot of times we ask designers, does this have that? What goes with that? Then a lot of restaurants suffer from new employees. That going back and forth to the kitchen, and asking the question is not a great experience.
Ultimately, I'm not saying restaurants don't train their staff. They should know everything that's in everything, but in the short term, if the customer can answer their own question via the phone, which they already have with them, and they're probably already using and a lot of folks are ordering right from the menus anyway, or scanning a QR code, adding that layer of information.
Plus a lot of people, especially if they have dietary restrictions, like to research ahead of time, what they want to eat because they know they're limited. They already know, and that resource is there. That's great. Logistically, the restaurant is very simple, it sounds like adding stuff on their computer, and then that's going to the cloud, and it pulls up right on the phone. Is it now that simple?
Simplifying The Integration Process
It is. One of the great things we love is when a restaurant asks us, “What's the integration process? The integration process is you take this snippet of code, which is directly associated with your recipe analysis account, and you replace your URL that was a traditional PDF. That's your integration. There are a couple of unique things that I think are important to note. One, because it's a live feed to MenuCalc, we all know the fraud issues with supply chains.
If a customer goes into the MenuCalc account and they sub out a different type of hamburger bun for another one, let's say they were using one and now they're using coleslaw and that one has sesame on it. Because we have that direct information from the brand, we now know that has an allergen in it, that has a change of potential nutrition information, and Smart Menu just automatically updates that to the guest. The operator doesn't have to download that recipe information again, send it to someone who's in marketing, who sends it to someone who's in digital, who then goes onto the website. it's a real-time live sync-up, which we're hearing from customers are saving 10, 20, 30 hours of that downloading and uploading of that nutrition information.
That's a big change in terms of the staticness of the historically would have been to change that on the fly is terrific. I'm curious. This just goes maybe outside of what you do, but since you're so deep into recipes, do you find in your travels, when you meet in a restaurant and you go, “For this to work, we need your recipes and you need to have everything costed out and figured out an image.” They're like, “We know that but we don't necessarily do that.” Do you come across that aspect of the restaurant?
We do. I used to wait tables in my late teens and early 20s when I moved over from England. It was very much like you scratched it on the back of a piece of paper. The chef's special was usually scribbled through in italics. I think we still have that and we should. When you go out to eat away from home, it's an experience. It's an opportunity to leave everything else at the door and come into someone else's dining room and to have the experience that they want you to have and have their food and flavor and taste and cuisine.
When dining out, it's all about leaving everything else at the door and experiencing someone else's dining room. Embrace the flavors and tastes they offer!
There is a direct correlation between I guess one could say the number of locations or the size of the operator compared to the data that their recipes are stored in. Typically, we see 1 to 5 locations. You're not going to see an operator that's going to have nutrition or their recipes in an Excel-based column format or a CSV or a PDF spec sheet, which we can then take. We put it through this proprietary upload software that we have and then it automatically matches it to all the ingredients in our system, which we have about 480,000 of them.
Because of that, sometimes we do prefer to say to those customers that are interested in using Smart Menu, just pick a couple, maybe do 10, maybe do 20 that we know are going to be vegetarian, they're going to be allergen friendly, they're going to potentially be sustainable. Let's give you a little bit of marketing tools. Then over time, as you're ready and you've got resources, you can put your recipes in a nutrition analysis-ready format.
It's a process and it's an undertaking we do, and I'm not sure when this will hit, but we have another webinar coming up where I know we'll be talking about food costing and the importance of that, and knowing everything that's in there. It is a process that not everybody undertakes fully. As you're talking, I'm scanning some stuff on your website, who we serve, what we serve. Talk about the clientele that you guys are. You're in California, but I don't think you're geographically constrained. What type of operations do you work with, both big and small? What do you got?
We have supported about 30,000 locations with the nutrition analysis, allergens, and then now smart menu. I guess smart menus are a diamond in the rough if you will. It started literally as, operator let us help you comply quicker. You were doing 101 other things, trying to digitize your dining room because of COVID and everything was closed. You're trying to spin up QR codes, you're trying to spin up loyalty programs, all extremely valuable digital processes in that chain.
They were having to export nutrition information from MenuCalc, put it in an Excel file, put it in a PDF, and send it to all those people. We just realized that we have to digitize that. Then on top of the number of supply changes that were happening, our customers were in effect doing a lot of data entry. That's not a compelling enough, I think, process that we wanted to sell. Smart Menu literally was built out of a necessity to help our customers stay during their nutrition analysis with us without having to take too much of their time.
Because it's digital and because it's hosted by us, we realized the amount of data that we were collecting across our Smart Menu customers, which could be two locations. We've got independents that use the Smart Menu all the way up to 3, 400 plus locations. It doesn't matter. It's not the same as a menu labeling law. It doesn't matter if you are one location or you're 2,500. A diner is going to come to your site, going to come on-premise or come to your website with a preference, 86 million people. To force them to have to find this information that suits their preference in your footer, in a PDF, we have to change that.
What we realized in just 6, 7 months of Smart Menu going live across about 280 locations, so not a huge amount, we were crossing into the 500, 600, 700, 800,000 unique diners were interacting with Smart Menu. We just crossed 1.5 million diners earlier this year and they're putting in their information, they're filtering, and so we take those insights and then we provide them back to our customers in their menu count dashboard and they can make real-world marketing decisions, real-world seasonal, real-world limited time offers that are directly associated to their diner's preference. I mean, we all eat differently. The future of a menu is an individualized one, not a generalized one across the board.
The Value Of Educational Content And Blogs
Good summary points there. I appreciate that. Also poking around the side, I see stuff like blog content. Is that something you guys believe in producing education stuff? Any tips there you'd share?
We do. I think, again, shifting away from compliance to insights. We spend a lot of our time on the blog and on the resources pages, just helping our customers understand the rules and regulations. If you're 20 or more locations, you have to have those calories on the menu and menu board. All these other nuances have to be in the same font as your price, and then it has to have ranges.
We took a 180-page FDA registration document and turned it into little snippets under our blog and resources page. I think it is really important that an operator has the ability to find someone who is a thought leader in the particular space that they love, they're passionate about, and they can just rely on them doing the research in advance versus a restaurant having to trill through pages and pages of insights and rules.
In the capital, nobody wants to go through that 180-page document when they’re trying to run their business to pull out the essentials from there. I see also, I didn't click on it yet, but case studies. What do you do there? Anything that's top of mind or anything that pops up in your head that you've done case study-wise in terms of looking at what folks do and how they benefited from what you folks do?
Definitely, and there are a couple of restaurants. Some actually happened to be in Southern California and we showed them the insights and they looked at what was happening on the diner side so they could see the X number of diners were taking avocado out of the build-their-own quinoa bowl or build their own salad. They realize that if we're buying all of these fresh avocados, which are super expensive in California, have a very high spoilage rate, and don't often transport very well. Less than 8% of our diners are actually adding those to their build-their-own bowl.
Again, we know that because they're clicking on nutritional allergen information. They made a direct change to their recipe purchasing ideas. They made a direct change to some of their limited-time offers. It's the same with some of our other customers where they're using Smart Menu now as a training tool, a front-of-house training tool. We've got one customer that has a pretty high turnover of the front of the house. Now they said, our guests not only can click on Smart Menu and filter by preference, but so can our staff. Staff can be educated within this nice single webpage. They click a button, that shows all the items that are gluten-free or shows all the items that are free from dairy.
It helps them become far more informed and create that great rapport at the table side. Those are the types of key studies that we're starting to bring to the forefront. The traditional ones have always been compliance. There are a couple of testimonials recently. There's a Mediterranean concept in Las Vegas, and he said, “You have saved hundreds of hours for us in the ability that it just auto updates. We kept having to swap out different types of protein because of supply chain issues. Those are the really great things that we hear, which you wouldn't have thought a nutritional analysis company could help with labor savings or marketing.
Smart Menu saves restaurants hundreds of hours with auto-updates, especially during supply chain issues. Nutritional analysis can boost labor savings and marketing!
Tips And Learnings From Restaurant Clients
My next question said this, I think it'll work out fine. I was going to say, I'm going to put you on the spot, but I think it'll make sense because I'm going to say, since you're dealing with so many restaurants and you're getting feedback across everything they do, any, any advice or any learnings that you're hearing from clients, generally in that you think could help operational wise could be a tip that you just picked up from Las Vegas that could work in California or San Diego to Boston. What are you hearing out there that you think might be interesting to share?
Respectfully, please replace the PDF of your nutrition and allergen information. 93% of consumers go to your website on their mobile phone before they go on-premises. 86 million people have a dietary preference. They visit the most, they spend the most, they're the most loyal. It's a huge underserved market. By hiding this information in your footer, by hiding it in a PDF, which is not mobile-friendly, you don't have to do that. I would say, “Throw out what you've heard from how historically we were saying, “Nutrition information is bad and compliance a nuisance.” It is a huge opportunity if you just put it on the forefront if you just digitize it.
The difference between our customers is when they put a Smart Menu at the top, where it'll say menu, locations, and nutrition, some of them actually say Smart Menu and then About Us, and then Franchise, the standard header. The amount of diner interactions and engagement restaurants get when they put it at the top then lends itself to true insights. What is the diner looking for? What are they filtering? Do we have a vegetarian following? We thought it was gluten. Put it at the top, understand who your diner is, and then tailor your marketing, messaging, and menu to that. You can have the platform for free for a year if I'm wrong. I promise you it's the right thing.
Guaranteed. It's the internet. It has to be true. Very good. I believe that. A couple of things as we wrap up a couple more minutes, I will put you on the spot one or two more times and you can go any direction you want here. You’re a leader of a company that has been for years. Any leadership lessons you'd share in general or a mantra or a quote that you use with your team? What do you think?
Leaderships Lessons And Admitting Mistakes
I made so many mistakes. I think the team is all different experiences and backgrounds and ages. I think one of the things that work for us is just being very humble in, “I made a mistake, or we spent $40,000 on a marketing company because we went to a trade show and we saw the larger restaurant operators doing that, or we saw bigger software companies doing that, and we shouldn't have.” I think it's important for any team member to go, “We probably shouldn't have spent that budget.” It's okay to make mistakes.
It's okay to make mistakes. Admitting them and learning together strengthens the team. Be humble, stay true to yourself, and grow together.
I think one of the things that I feel passionate about is that as soon as you come through that office door or home office, or wherever you're working, you're no longer that person you were at home an hour ago. You're still a mom or a dad, a cousin, a best friend, a roommate. You're still that person. I think companies need to do a far better job of understanding that as soon as you walk through the door, you're not an employee. You're still Lucy, you're still Jaime. That's worked well for us. It's interesting being in the food industry for as long as I have been a female. You've had to learn a couple of thicker skins on that.
Thick skin stuff, sure.
I think that’s from a team's perspective.
I just read this book repeatedly. It's How to Win Friends and Influence People. It’s the tackiest title you've ever heard, but everybody should read this. I read a little bit every day. I read a chapter every day, but one of the most recent chapters was on admitting your mistakes. If you made the mistake, man, admit it straight up rather than waiting for someone else to come to you.
It's the best formula out there. Happens to us all. We make simple mistakes. We make big mistakes. It is a good lesson to admit them, move on, and grow together rather than try to hide them or defend them. The worst thing you can do is defend a mistake. It's not great. I thought that was good. Any books on your shelf that you'd say, “Check it out?”
One of my favorite books is The Infinite Game by Simon Sinek. It is one of my all-time favorite books, and it really speaks to, as a company, you have the choice, you can fight and get into the infinite game of growing and running a business, or you can get into the infinite game where it's infinite finish line. It just keeps going and keeps going. It speaks to innovation. The opening chapter is about the Swiss Army knives just after 9/11.
They realized 90% of our products are no longer going to be able to be bought on the airlines because they were Swiss Army and they were nail clippers and whatnot. Rather than the team and the CEO and the leadership going, “That's it, we're doomed.” They thought people were still going to travel. What can we take with our existing customer base? What can we take with our current footprint and sell back? They now sell more travel bags, toiletry bags, and laptop-friendly bags that you don't have to take out for the X-ray. That's how it starts. I just love that infinite pivot that businesses always have an opportunity to evolve into.
Businesses always have the opportunity to evolve and innovate. Embrace the infinite mindset!
I'll put that on my Amazon shopping list. I'll pick that up in the next few months and check it out. I appreciate that. As we close, I want you to go out to send them to websites or white papers. I know you have a couple of sites or social media. Where would you like to tell folks to go?
I would say go to MenuCalc.com and you can grab all the information about Smart Menu in LinkedIn. Lucy Logan on LinkedIn. We are starting to do quite a lot of digital promotion on LinkedIn. I think it's a wonderful opportunity to bring like-minded people together. We're going to probably start sharing a lot more facts and insights on Smart Menu. Look for me, Lucy Logan, CEO and Founder of FoodCalc on LinkedIn. I look forward to connecting with you there.
Folks, that was Lucy Logan of MenuCalc. You can find them, as she said, on the web at MenuCalc.com. For more great restaurant marketing, operations, service people, and tech tips, stay tuned to us here at RunningRestaurants.com. Hit that like button, hit that subscribe button, review us, please. That all helps, we appreciate it. We'll see you next time. Thanks, Lucy.
Thanks, everyone. Thanks, Jaime.
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Thank you again for joining us for this episode of the show. Please, if you would, do me a big favor and hit the like button on this show and please subscribe or favorite us on your podcast platform to get future episodes. We'd also very much appreciate your feedback or review of the show. If you would share that, it would be great and a big help to us. Thanks so much, and we'll see you soon.
Important Links
- Lucy Logan - LinkedIn
- Menu Calc
- PopMenu.com/running
- How to Win Friends and Influence People
- The Infinite Game