Stars, Dogs, Plowhorses, and Puzzles

As I recently learned in class, those four words — stars, dogs, plowhorses, and puzzles — are the four most important words when it comes to running a restaurant.

We all know that alcoholic beverages are, in many cases, what keep a restaurant’s doors open.  The profit margins on alcoholic beverages typically far far outweigh most of the food items on a restaurant’s menu, and it’s thus no coincidence that restaurants love to request that their patrons “wait at the bar while we make sure your table is ready.”  Profitability margins in the restaurant industry, as I’ve learned, are an average of only 4-6% (including alcohol); thus, every single penny counts.  And here’s where the stars, dogs, plowhorses, and puzzles come in.

In restaurant lingo, “stars” are menu items that are high-margin, high-popularity.  Typical “stars” include, say, omelets, stewed mussels, pasta dishes, etc.  (My recent menu-costing project revealed that even a terrific spaghetti carbonara — made with guanciale, top-quality pasta, and good grana padano — still ran me only about $2.60 a portion, and could probably easily be sold for a  good $14 if not more.)  “Dogs” are the precise opposite of “stars,” as they are low-margin, low-popularity menu items.  These are the ones that cost a lot of money to make (relative to the amount you can charge), but are not even close to popular enough to offset the extra expense.

Most interesting to me are the “plowhorses,” which are menu items that are low-margin, but high-popularity.  As the name suggests, these are the items on the menu that bring the customers through the door, and you just pray that they’ll order more than just the plowhorse item itself.  A classic example is steak; the food cost is proportionately very high compared to the price you can get away with charging, but having it on the menu is valuable for other reasons because, e.g., it enhances the cache of the restaurant, draws in the 4-top family where Dad refuses to eat salmon, and prompts people like me to buy too many martinis.  I recently learned that Ryan Farr’s famed 4505 Meats specialty butcher now sells what’s supposed to be the city’s most amazing hot dog, with an unheard-of food cost percentage of a whopping 65%.Eiji Mochi

Because all good posts need yummy pictures, here’s a photo of the most recent plowhorse I encountered:  The fresh whole-strawberry mochi dessert from Eiji in the Castro.  As described, it’s an entire plump juicy strawberry, coated in a light but not insignificant layer of azuki bean paste, and then wrapped in a freshly made glutinous rice dough.  The restaurant only allows its patrons to order one of these per person, for $2, and presumably its food/labor cost percentage is quite high given the shelf life of its ingredients and the huge pain in the ass involved in making mochi by hand.  Granted, all of Eiji’s food is terrific, but it’s this dessert that largely makes us choose that establishment over any other Japanese restaurant.  There you go, plowhorse.

Last, you have the “puzzle,” which is high-margin, low-popularity (read: bleeds you money).  I suppose it gets its name from the fact that, ordinarily, you wouldn’t bother investing in a high-margin dish unless you’d anticipate people wanting to eat it.  But there are almost always those duds on a restaurant menu.  And what do you do?  Dress it up on your menu by making it sound delicious, bump it to either the first or last item in the category (studies show that patrons tend to order the first and last-listed entrees the most), and obviously take it off your menu as fast as possible.

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